On May 26, Standard Chartered Bank announced the signing of a Transition Trade Finance facility of $25 million to support the Tung Ho Steel Vietnam Corporation Limited (Tung Ho Steel Vietnam). A first for Standard Chartered in Asia and for Tung Ho Steel, the working capital facility will support the company’s ongoing procurement of scrap steel as part of its scrap-based Electric Arc Furnace (EAF) production.
Tung Ho Steel Vietnam is a subsidiary of the Tung Ho Steel Enterprise Corporation, the largest EAF-based steel producer in Taiwan (China). Producing new steel from steel scrap is one of the most environmentally-friendly ways of production. Since its establishment in Vietnam in 2016, Tung Ho Steel has been producing steel using 95-100 per cent scrap, recycled steel as raw material, and EAFs in its production facilities.
Compared to traditional blast furnaces, using electric furnaces to refine the steel enables steel scrap to be constantly reprocessed, thereby consuming less energy and reducing carbon dioxide emissions by an estimated 75 per cent. It is estimated that EAFs emit a quarter of the carbon dioxide released by traditional blast furnaces.
Commenting on the deal, Ms. Nguyen Thuy Hanh, Deputy General Director, Head of Corporate, Commercial and Institutional Banking at Standard Chartered Bank Vietnam, said the credit extension to Tung Ho Steel Vietnam is part of the bank’s commitment to clients to help raise sustainable financing and support their climate ambitions. “Standard Chartered strives to be a key contributor to Vietnam’s sustainable development and continues to work closely with our clients and ecosystem of stakeholders to provide finance to where it matters most,” she added.
Tung Ho Steel’s aspiration is to become a leader in EAF steel refining. The company has been conducting greenhouse gas emission inventories, participating in voluntary carbon reduction programs, and proactively disclosing greenhouse gas management strategies since 2003, according to Mr. Huang Bing Hua, President of Tung Ho Steel Vietnam.
In alignment with the Group strategy, the company’s operations in Vietnam focus on establishing and maintaining a high environmental standard in its production. This is ensured through the effective and sustainable use of energy, products, and governance.
“We are proud that this transition trade finance facility is one of the very first in the region, which underscores our strong commitment to sustainability in our manufacturing operations,” said Mr. Hua. “We look forward to working closely with Standard Chartered Vietnam as we seek to accelerate sustainable developments of our organization and in the industry.”