Leading Vietnamese steelmaker Hoa Phat Group has signed a contract with Germany’s SMS Group to build a production line for tracks for high-speed railways, which the company says will make it the only Southeast Asian enterprise with that capability.
SMS will install a production line with an annual capacity of 700,000 tonnes at the Dung Quat steelworks in the central province of Quang Ngai. Production is scheduled to begin in the January-March quarter of 2027.
The project dovetails with a green light from Vietnam’s parliament to build a US$ $67 billion high-speed railway that would reduce a 35-hour train trip from Hanoi to Ho Chi Minh City to just 5.5 hours.
The 350-km rail line would require the removal of 120,000 residents and parts of protected forests and rice fields. Construction will start in 2027 on a project that’s been under review for 18 years, during which the Southeast Asian country has been outpaced by its neighbour, Laos, which has a Chinese bullet train and a population smaller than Hanoi’s.
Available figures from the Vietnam Timber and Forest Products Association show local businesses are shipping more than US $14 billion worth of wood and wood products abroad, with US $1.49 billion going to China.
The Hoa Phat-SMS Group steel rail venture is expected to be completed within 20 months, with the first high-speed rail tracks scheduled to be rolled out in 2027. This investment will make Hoa Phat the only enterprise in southeast Asia capable of producing steel rails for high-speed railways.
Tran Dinh Long, chair of the Hoa Phat Group, said the production line was expected to be completed within 20 months, with the first high-speed rail tracks scheduled to be rolled out in 2027. This investment will make Hoa Phat the only enterprise in southeast Asia capable of producing steel rails for high-speed railways.
Specifically, SMS will design, supply, and install the production line for rail steel and special steel for Hoa Phat. The rolling process includes a Bloom & Beam Blank reheating furnace, a rough rolling; multi-purpose reversing mill, automatic laser surface and profile defect detection system, a non-destructive testing system, a precision straightening system, synchronised rail head hardening and a rail drilling system. All key equipment will be manufactured in Germany under strict and uniform quality control standards, ensuring suitability for high-speed rail applications in Vietnam and globally.
The final products will include various types of special steel that no Vietnamese enterprise has produced before. These include metro rails, crane rails, high-speed railway rails, as well as shaped beams and other specialty steels for key national railway projects and export markets. Currently, only a few major steel corporations in the world can produce high-speed railway rails – Voestalpine (Austria), JFE (Japan), Baosteel (China) and JWS Steel (Italy)…
With the advantage of producing steel from low-impurity iron ore, Hoa Phat’s rails can reach lengths of up to 100 meters, offering excellent straightness, flatness, and superior hardness. Hoa Phat employs laser systems for precise rail geometry control and ultrasonic testing to detect internal defects, ensuring the highest rail quality before market launch. The products will meet the world’s most stringent standards, including EN 3674 (Europe), JIS E1120 (Japan), and TB/T2344 (China), meeting the rigorous technical requirements of the transportation and heavy industries.
Tran Dinh Long, chair of the Hoa Phat, says the group is focusing on producing high-quality steel for the railway, oil and gas energy and defence sectors, with an aim to replace imported high-grade steel products. In line with its commitment to the government, Hoa Phat is investing in a factory for rail, structural, and special steel production to provide top-quality, competitively priced products for high-speed rail projects and other key national infrastructure initiatives.
Hoa Phat is the largest steel producer in Vietnam and southeast Asia. By the end of this year the group’s design capacity will reach 15 million tonnes annually, mainly focused on hot-rolled coil and high-quality steel for mechanical engineering. The group holds the largest domestic market share and has exported various steel products to 40 countries and territories.
