Provincial authorities have granted a business certificate for the Hoa Phat Container Production Jsc with a charter capital of VND3 trillion ($130 million), the company said in a statement.

The plant, when completed, will have the capacity to make 500,000 twenty-foot equivalent units (standard size) a year. After the first phase, the plant will be able to make up to 200,000 units a year.

Vu Duc Sinh, CEO of the new company, said that Ba Ria–Vung Tau was selected as the province is expected to be a growth driver for the southeastern region, and it is favorably located near big ports like Cat Lai and Cai Mep – Thi Vai.

The southern region has an especially high demand for containers. Market research by Hoa Phat found that three out of every four containers are used there.

Hoa Phat has enough funding for the plant and will start delivering containers in the second quarter of next year, Sinh said.

The group claims it is the only company in Vietnam that is capable of producing the weather-resistant steel used to make containers. This is a costly material that can inflict losses on a factory if it is imported.

The quality steel is produced at Hoa Phat Dung Quat plant in Quang Ngai Province. The container plant is expected to consume one million tonnes of this material a year.

Hoa Phat expects prices of its containers to be more competitive than those made in China thanks to the large capacity of the plant. China produces around 90 percent of the world’s containers.

The group’s decision to start making containers was taken amid a global shortage of the metal boxes after the Covid-19 pandemic disrupted global supply chains.