Vinachem Chairman: 3 struggling members stabilized, Dam Ha Bac fertilizer plants capitalized

Speaking at the Conference on the Implementation of the Monetary Policy for 2024, Mr. Nguyen Phu Cuong - Chairman of the Board of Directors of Vietnam Chemical Group (Vinachem) updated on the achievements of the Group as well as the activities of its member units.

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Mr. Cuong stated that in 2023, Vinachem faces many challenges, bringing in consolidated revenue of over 57 trillion VND, a profit of nearly 3.5 trillion VND, and contributing 1.7 trillion VND to the state budget. Currently, the Group has nearly 20,000 workers with an average income of 13.6 million VND per month.

Chairman of Vinachem’s Board of Directors Nguyen Phu Cuong. Photo VGP/Nhat Bac

In terms of production, in 2023, Vinachem produced over 3.1 million tons of various types of fertilizers, 3.4 million car tires, 330,000 tons of cleaning agents, and some other chemical products. Some products have seen growth, such as urea increasing by 17%, DAP increasing by 35%, superphosphate increasing by 15%, and cleaning agents increasing by 18%,…

Vinachem’s debt at banks is about 15 trillion VND, with most members having strong financial positions. Especially, the three weakest units, part of the project that is considered weak for the industry, namely Dam Ha Bac (UPCoM: DHB), Dam Ninh Binh, and DAP Lao Cai, have undergone a restructuring process and received significant assistance from commercial banks to ensure capital and cash flow.

Mr. Cuong shared that these are 3 units with negative owner’s equity, having incurred losses for many years, leading to difficulties in meeting credit requirements for capital allocation. However, commercial banks have provided a lot of support for these 3 units to operate stably and maintain cash flow.

Especially, thanks to the decision of the Prime Minister, the Vietnam Development Bank (VDB) has restructured the loans of the 3 units, including reducing the interest rate from 11% to 8.55%, extending the repayment period, and removing fines for late interest payment. As a result, all 3 members have operated profitably for 3 consecutive years.

In 2022, the total profit of the 3 members reached 2.7 trillion VND, and in 2023, it reached 1.3 trillion VND. In the first 2 months of 2024, the members have operated stably and profitably, with a production capacity of over 90% of the design capacity. Among them, the 2 units that produce urea produce nearly 1 million tons per year, supplying the domestic market and exports.

Mr. Cuong said that the restructuring of loans has created conditions for the 3 units to stand on the brink of stable production. DHB, after restructuring, has a positive owner’s equity, reaching over 614 billion VND by the end of 2023.

* Restructuring thousands of billion VND of debt helps Dam Ha Bac earn a strong profit and reverse the trend throughout 2023

* Dam Ha Bac continues to incur heavy losses: Negative owner’s equity, drowning in debt

As of February 29, 2024, a total of 3 units have paid back the principal and interest to VDB over 12 trillion VND, out of the initial borrowing of 10.6 trillion.

According to Mr. Cuong, the chemical industry is identified as one of the 6 foundation industries, playing an important role in the economy. Implementing the Prime Minister’s decision approving the “Plan to restructure the parent company – Vietnam Chemical Group in the period 2022-2025” and “Plan to restructure Vietnam Chemical Group until 2025”, in the coming time, Vinachem will invest and expand projects as well as relocate from Bien Hoa industrial zone.

Chau An

SOURCEvietstock
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