CTCP Garmex Saigon (stock code: GMC) has just announced information on obtaining opinions in writing about the plan to transfer the right to use and associated assets.
Accordingly, Garmex Saigon plans to transfer more than 5 ha of land in Hac Dich commune, Tan Thanh district, Ba Ria – Vung Tau province, which belongs to the company’s right to use and ownership. At the same time, this textile and garment enterprise will also transfer 2.6 ha of land in Ha Lam – Cho Duoc industrial cluster, Binh Phuc commune, Thang Binh district, Ha Nam province, which belongs to the right to use and ownership of Garmex Quang Nam Co., Ltd.
In the explanatory document on the 2023 financial results, Garmex Saigon stated that the company currently does not have any orders, with unfavorable business conditions. If it continues production at its factories in the textile and garment industry, the company will incur significant losses. Therefore, the company has restructured its workforce, reduced labor, temporarily suspended production to minimize losses, and continued to maximize cost savings.
At the same time, Garmex Saigon will review its assets, seek opportunities for the reasonable exploitation of existing spaces or dispose of unused assets, and diversify its industries to reduce risks.
At the end of the 2023 financial year, Garmex Saigon recorded nearly VND 8.3 billion in consolidated net revenue, a decrease of 97% compared to 2022, and a post-tax loss of approximately VND 52 billion (compared to a loss of VND 85 billion in the same period). This enterprise has also incurred losses for 6 consecutive quarters.
As of December 31, 2023, Garmex Saigon had only 35 employees. The main reason for the declining business situation of the enterprise is the loss of revenue from its partner, Binh Thanh Import Export Production Corporation (Gilimex, stock code: GIL).
Specifically, Gilimex had sued e-commerce giant Amazon Robotics LLC. This not only affected Gilimex itself but also caused adverse impacts on partner businesses such as Garmex Saigon.
Amazon used to be the main partner of Gilimex since 2014. During the pandemic period, e-commerce has boomed, and Gilimex has invested tens of millions of US dollars in production facilities to build warehouses for Amazon, recruiting over 7,000 employees at various factories to produce over 1 million units of products per year. Production activities for Amazon have increased 20 times in the past 8 years.
In addition, to meet the needs of the e-commerce giant, Gilimex has rejected other major customers such as IKEA, Columbia Sportswear and relocated its production and packaging facilities to continue production. A report by Vietcombank Securities (VCBS) stated that before the incident, Amazon accounted for up to 85% of Gilimex’s revenue, while the remaining 15% came from IKEA and other customers.
