Dongwha to invest $66M in building MDF production line in Vietnam
Dongwha Enterprise Chairman Seung Myung-ho gives a speech during a groundbreaking ceremony at the VRG Dongwha MDF plant in Binh Phuoc Province, Vietnam, Tuesday (KST). / Courtesy of Dongwha Enterprise
By Jhoo Dong-chan
The nation’s leading floor material company Dongwha Enterprise will invest some 80 billion won ($66 million) to build another Medium Density Fiberboard (MDF) production line in Vietnam, a company official said Tuesday.
The company’s second MDF production line is expected to be built in Binh Phuoc Province, Vietnam, where the factory of Dongwha’s joint venture with state-owned company Vietnam Rubber Group (VRG), so-called VRG Dongwha, is located.
“Vietnam has abundant rubber tree resources. It is natural for the company to expand its MDF production line there,” said a Dongwha official.
“The VRG owns a 250,000 hectare rubber tree plantation. With the VRG’s stable rubber supplies and extended production line, Dongwha is expected to roll out more MDFs in the future.”
When Dongwha first started its MDF operation in Vietnam in 2012, there were only six local factories that produced MDFs.
Along with Vietnam’s steep growth in economy, however, ten MDF producing companies are reportedly operating now.
“Dongwha is the first company that entered the country with joint venture, which can produce a total of 480,000 cubic meters of MDFs every year once the second production line is completed,” said an official.
“Its output is expected to be six or seven times greater than local MDF companies’ production there, the largest production capacity by far in Asia.”
The construction of the second production line will be completed by December, and VRG Dongwha’s sales revenue is also expected to increase by 30 percent, VRG Dongwha CEO Seo Jin-suk said.
Meantime, Dongwha Enterprise’s operating profit has been continuously increased for the last two years from 56.2 billion won in 2014 to 62.4 billion won in 2015.