CTCP Garmex Saigon (HOSE: GMC) will implement a written shareholder opinion solicitation to approve the plan to transfer land use rights and assets from March 25th to April 15th, based on the cutoff list on March 15th, 2024.
Accordingly, Garmex plans to transfer more than 5 hectares of land in Hac Dich commune, Tan Thanh district, Ba Ria – Vung Tau province, which is under the ownership and use rights of the Company. Garmex also plans to transfer 2.6 hectares of land in Ha Lam – Cho Duoc Industrial Cluster, Binh Phuc commune, Thang Binh district, Quang Nam province, which is under the ownership and use rights of Garmex Quang Nam Co., Ltd. (a subsidiary wholly owned by Garmex).
This move comes at a time when Garmex has had to halt production and cut nearly all labor due to declining business and lack of orders.
In addition to the general difficulties faced by the textile and garment industry due to the decline in orders, GMC’s business operations have been affected by the fallout from a contract dispute with its partner – Binh Thanh Production, Trading and Import-Export Corporation (Gilimex, HOSE: GIL) involving the “giant” Amazon.
As a result, Garmex incurred losses for two years in a row (2022-2023) amounting to VND 85 billion and VND 52 billion, respectively, bringing the accumulated loss to nearly VND 74 billion. It should be noted that this is the first time the Company has incurred such a loss since its establishment in 2005.
| Garmex’s net profit from 2005-2023 |
By the end of 2023, Garmex’s total assets reached over VND 410 billion, a decrease of nearly 22% compared to the beginning of the year. Cash on hand was only VND 29 million, bank deposits amounted to over VND 26 billion, and inventory was nearly VND 95 billion. The Company had debts of nearly VND 27 billion to be paid.
The Company’s leadership has stated that the business situation is unfavorable, and if production were to continue in the apparel industry, there would be significant losses. Therefore, Garmex has decided to restructure its operations, reduce labor, temporarily halt production to minimize losses, and review its assets for liquidation if they are not needed to cover expenses.
Since December 2023, the Company has continuously announced the liquidation of cars and trucks. Among them, a 2011 Mercedes car was offered for VND 250 million, and a Mitsubishi car from 2013 was listed for auction with a starting price of VND 437 million. Additionally, Garmex also put embroidery machines, washing machines, and dryers up for sale.
In order to reduce costs, from a workforce of nearly 3,800 personnel at the end of 2021, Garmex had only 2,101 employees by the end of 2022, and a mere 35 employees by the end of 2023. Since the early months of 2023, the Company’s Management Board has reached agreements with its employees to reduce salaries and make efforts to minimize expenses.
Image: Garmex Saigon
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Garmex Saigon used to be a well-known garment manufacturing company in Ho Chi Minh City, established in 1976. The company has 5 factories including An Nhon, An Phu, Binh Tien (Ho Chi Minh City), Tan My (Ba Ria – Vung Tau), and Quang Nam with a total area of over 10 hectares, housing 70 production lines.
