Garmex Saigon JSC (GMC) recently sent a letter to the Ho Chi Minh City Stock Exchange (HOSE) providing information about its production and business situation.
According to Garmex Saigon, the production and business activities faced numerous challenges in 2023, including a lack of orders, small orders, low productivity, and competitive processing prices, leading to revenues that could not cover costs. The company had to reorganize its operations, continue to reduce labor, and temporarily suspend production to minimize losses.
Therefore, production (including garment processing and fabric cabinets) has been temporarily suspended since May 2023 due to the absence of new orders.
In the context of the garment industry not showing signs of recovery, Garmex Saigon is shifting towards new areas. Specifically, in July 2023, the company increased its capital contribution from VND 4.3 billion to VND 18.2 billion at Phu My Joint Stock Company – a subsidiary of Garmex Saigon – to implement the Phu My commercial housing project.
Subsequently, the company contributed an additional VND 5.6 billion in August 2023. Up to this point, the total capital contribution by Garmex at Phu My Company is nearly VND 24 billion.
In order to minimize losses, the company has recently sold off some damaged machinery and equipment through competitive bidding in September and October 2023. In December, they continued to auction off items such as cars, trucks, embroidery machines, washing machines, and industrial dryers. However, the only successful auction was for the industrial washing and drying machines.
GMC stocks rebounded from the end of January 2024 Source: Fireant
In late February 2024, the company announced that it would obtain shareholder opinions through written documents to approve a plan to transfer land use rights and assets.
Specifically, Garmex Saigon intends to transfer land parcels in Hac Dich commune, Tan Thanh district, Ba Ria – Vung Tau province, with an area of 50,173 m2 (over 5 ha) and land parcel of 26,000 m2 (2.6 ha) at Ha Lam – Cho Duoc Industrial Cluster, Binh Phuc commune, Thang Binh district, Quang Nam province.
In 2023, Garmex Saigon’s revenue was only VND 8 billion, a 98% decrease compared to the same period, and after-tax losses of VND 52 billion (compared to an after-tax loss of VND 85 billion for the same period) thanks to the sale of assets.
Garmex Saigon, formerly known as the Union of Ho Chi Minh City Garment Enterprises, was established in 1976. Prior to the difficult period, Garmex Saigon had nearly 3,800 employees as of the end of 2021. However, by the end of 2022, the company had reduced to only 2,101 employees, and by the end of Q3/2023, there were only 35 workers left.
The company stated that the remaining workers are working in the warehouses and some indirect staff to handle and preserve stored goods.
Currently, the company is reviewing unused assets and materials to prepare for liquidation, dealing with long-term inventory, which still incurs costs for the garment industry despite no revenue for this sector.
