Vietnam’s massive public investment push is paying dividends for the country’s materials and infrastructure companies, with earnings in the sector growing by double digits in the first half of 2026 as the government accelerates road, rail and port construction.
Hoa Phat Group, Vietnam’s largest steelmaker and Southeast Asia’s biggest, reported first-half net profit roughly double the year-earlier figure, driven by strong domestic demand from construction projects and a 40% year-on-year surge in infrastructure spending. The company sold 3 million tons of steel in the first quarter alone, up 26% from a year earlier, with crude steel production rising 25% to 3.3 million tons.
Public Investment Drives Demand
Vietnam’s government has been aggressively ramping up public investment to sustain its position as one of Asia’s fastest-growing economies. Infrastructure spending jumped approximately 40% in the first half, supporting projects ranging from the North-South Expressway to new port facilities and urban development. S&P Ratings has forecast Vietnam will remain Asia’s fastest-growing nation after India through 2028, though it warned that heavy public spending could widen fiscal deficits.
The construction boom has lifted steel consumption to double-digit growth in the first half, according to the Vietnam Steel Association. Domestic construction steel prices have held steady at around $532 per tonne, supported by limited exchange-rate fluctuations and growing trade-remedy protections against low-priced imports.
Strategic Expansion
Hoa Phat is also investing in higher-value products. The company is building a rail and special steel plant in Quang Ngai province, which is 35% complete since groundbreaking three months ago, with production slated for 2027 to serve Vietnam’s key railway projects and export markets. The plant targets import substitution in rail steel, a niche currently dominated by foreign suppliers.
“HPG’s growth is closely linked to Vietnam’s infrastructure development, and the company is expanding its capabilities into producing the steel required to build high-speed railway rails,” analysts noted, referencing the government’s Resolution 172 on railway development.
The broader infrastructure sector is benefiting similarly. Steelmaker Pomina Steel reported second-quarter revenue surging nearly fourfold year-on-year, with subsidiary operations returning to profit. Vietnam’s domestic steel market has remained relatively stable despite weakening global exports, as trade remedies strengthen protection against low-priced imports from China and other producers.
Vietnam’s public spending trajectory aligns with its long-term infrastructure plans, including the North-South high-speed railway, new deep-water ports, and expanded expressway networks. The country is also positioning itself as a key node in global supply chains, with infrastructure upgrades supporting both export-oriented manufacturing and domestic consumption growth.
Sources: Nikkei Asia; Vietnam Steel Association; S&P Ratings; The Investor Vietnam
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