Hoa Phat Group (HPG) Enters Offshore Wind with 30% Stake in Song Hau

Overview

Hoa Phat Group (HPG), Vietnam’s largest steelmaker, has announced a 600 billion VND (approximately USD 24 million) investment to acquire a 30% stake in Song Hau Offshore Wind Power Joint Stock Company. This marks the company’s first foray into offshore wind energy, a sector targeted for 6 GW by 2030 under Vietnam’s revised Power Development Plan 8 (PDP8). The move is seen as a strategic step to secure green energy for its steel operations, but faces significant investment costs and regulatory risks.

Key Facts

• HPG contributes 600 billion VND (USD 24 million) for a 30% stake in Song Hau Offshore Wind Power JSC.
• Song Hau Offshore Wind Power JSC was established on June 20, 2025, in Can Tho with charter capital of 2,000 billion VND.
• HPG and KVS Investment JSC each hold 30% of Song Hau; two individuals, including HPG Chairman Tran Dinh Long, each contribute 400 billion VND.
• Vietnam’s PDP8 targets 6 GW of offshore wind capacity by 2030, with total offshore wind potential estimated at 26-38 GW.
• Offshore wind investment costs in Vietnam range from USD 4-4.5 million per MW, according to GWEC’s Vietnam director.
• HPG previously built Vietnam’s largest rooftop solar project (79.2 MWp) for nearly 600 billion VND.
• HPG shares closed at 23,400 VND on June 25, 2025, down 0.43% with volume of 7.66 million shares.

What Happened

Hoa Phat Group’s board of directors approved the contribution of 600 billion VND to establish Song Hau Offshore Wind Power JSC, securing a 30% stake. The company was registered on June 20, 2025, in Can Tho with charter capital of 2,000 billion VND. Other major shareholders include KVS Investment JSC (30%) and two individuals: HPG Chairman Tran Dinh Long and Tran Dang Khoa, each contributing 400 billion VND.

HPG has not officially disclosed the rationale for this investment, but analysts view it as a natural extension of its energy strategy. The steel giant consumes significant electricity for its large-scale steel complexes, and renewable energy investments help meet green production standards. HPG previously commissioned Vietnam’s largest rooftop solar project (79.2 MWp) for nearly 600 billion VND.

Market Context

HPG shares traded at 23,400 VND on June 25, 2025, down 0.43% on volume of 7.66 million shares on HOSE. The stock has been under pressure amid weak steel demand, but the offshore wind announcement may signal diversification. Vietnam’s offshore wind sector remains nascent, with most projects led by state-owned enterprises like Petrovietnam and EVN, while foreign investors such as CIP (Denmark) and PNE (Germany) have yet to commence construction. Private players like REE and Trung Nam have secured survey areas, but others like Lung Lo Construction have withdrawn proposals due to high costs.

Strategic Significance

HPG’s entry into offshore wind aligns with its long-term goal of securing clean energy for its steel operations, which face increasing pressure to reduce carbon emissions. The investment is small relative to HPG’s market cap (approximately USD 24 million), but it provides a foothold in a sector with massive growth potential under PDP8. However, offshore wind projects in Vietnam face high capital costs (USD 4-4.5 million/MW), regulatory delays, and supply chain constraints. HPG’s steel manufacturing capabilities could provide cost advantages in turbine towers and foundations, potentially creating synergies.

What to Watch

• Official clarification from HPG on the strategic rationale and timeline for the Song Hau project.
• Progress on regulatory approvals for offshore wind projects under PDP8, including pricing mechanisms and power purchase agreements.
• HPG’s Q2 2025 earnings release for commentary on capital allocation and energy investments.
• Updates on Song Hau’s survey and feasibility study results, which will determine project viability.
• Competitor moves: REE, Trung Nam, and foreign investors’ progress in offshore wind development.