AGM CSV: Conservative plan to complete Nhon Trach project by end of 2029

Prudent Business Plan, Profit Reduction

At the general meeting, the Board of Directors of **CSV** presented and approved the consolidated revenue plan of over 1.6 trillion VND, approximately 3% higher than the 2023 revenue. The pre-tax profit is expected to be 261 billion VND, which would be about a 10% decrease. The target industrial production value expects to remain stable at over 1.7 trillion VND. The dividend plan for 2024 is projected to be 10%.

CSV forecasts formed the basis for these targets. The company anticipates that 2024 will bring negative impacts on production and business operations, potentially leading to a significant decrease in the labor force’s wages. This could hinder production stability and affect employees’ livelihoods.

Furthermore, the geopolitical situation remains volatile, global economic growth is slowing, and inflation is rising, which dampens consumer demand and significantly impacts production industries. On the other hand, exports face competition from similar products from China. The selling prices of **CSV**’s primary products, such as NaOH and HCl, have continued to decline, negatively affecting the business plan. Additionally, products like H3PO4 and H2SO4 face competition from inexpensive imported goods. Other manufacturing sectors, including steel, chitin, etc., show no signs of recovery, while the decline in consumer demand has forced other chemical and cosmetic industries to reduce production.

Despite these challenges, **CSV** assures that their raw material supply remains stable. The company will closely monitor prices to maintain appropriate inventory levels and implement effective sales strategies. The inventory will also be managed and monitored to ensure timely supply.

According to Mr. **Le Thanh Binh**, the General Director, this is a prudent plan that can be adjusted based on market demands to maximize profits and increase dividends for shareholders. “If we set the plan too high, it might be difficult to predict in a volatile market. If we fail to achieve the plan, I, as a representative of the state capital, would be subject to criticism” – Mr. Binh shared.

Regarding the profit distribution plan, the general meeting approved a 25% cash dividend for 2023 (each share will receive 2,500 VND), surpassing the plan from the 2023 General Meeting of Shareholders. Additionally, 74 billion VND will be allocated to the development investment fund, equivalent to 30% of the retained earnings after tax from the previous year.

The general meeting also elected members of the Board of Directors and Supervisory Board, comprising five Board members and three Supervisory Board members for the 2024-2029 term.

Three Board members were nominated by the Vietnam Chemical Group (Vinachem) – **CSV**’s parent company – Mr. Nguyen Huu Tu, Mr. **Le Thanh Binh**, and Mr. **Vu Minh Ngoc**. Mr. Binh is currently the General Director and Member of the Board of Directors, Mr. Ngoc is a Member of the Board of Directors, and Mr. Tu is the Deputy General Director of **CSV**. The remaining two members were nominated by **CSV** itself, Mr. **Le Phuong Dong** – Member of the Board of Directors, and Ms. Le Thi Ngoc Diep.

The three Supervisory Board members for the new term are Ms. **Do Thi Thoa**, Ms. **Nguyen Thi Minh Ha**, and Mr. **Nguyen Minh Tri**. Ms. Thoa is the current Head of **CSV**’s Supervisory Board, while Ms. Ha and Mr. Tri are also Members of the Supervisory Board.

Issuing 66.3 Million Bonus Shares to Increase Capital, Facilitate Plant Relocation to Nhon Trach Industrial Park

At the general meeting, **CSV** presented and received approval for a plan to issue shares to existing shareholders to increase share capital from the company’s equity, aiming to enhance its financial capacity and scale of operations. The capital for the issuance will comprise share premium (9.5 million VND), other equity funds (nearly 12 billion VND), and development investment fund (651 billion VND).

The company plans to issue a total of 66.3 million new shares, increasing the charter capital by 663 billion VND to over 1.1 trillion VND. The subscription ratio is 150% (1 share corresponds to 1 right, and 100 rights entitle the shareholder to 150 new shares). The issuance is expected to occur in the second and third quarters of 2024, subject to approval from the General Meeting of Shareholders and receipt of necessary documents from the State Securities Commission.

According to Mr. **Nguyen Tuan Dung**, Chairman of the Board of Directors, these funds will be used entirely for the Nhon Trach Chemical Plant Project, aiming to relocate three plants currently situated in Bien Hoa Industrial Park to Nhon Trach 6 Industrial Park.

“Nhon Trach is a large-scale project with an estimated investment of approximately 2,000 billion VND. We need to borrow money and have at least 30% in matching funds, which is about 600 billion VND, not to mention the available capital for us to maintain control. Fundamentally, **CSV** performs well and has sufficient capital for production and business activities, so the additional capital will be used for this project,” said Chairman Nguyen Tan Dung.

Providing an update on the Nhon Trach project, Mr. **Le Thanh Binh**, the General Director, said that **CSV** expects to complete the relocation of the three plants by December 31, 2029. “The project has faced some legal issues. In fact, since 2016, **CSV** had already determined that we had to relocate because we couldn’t expand or grow at the old site due to provincial restrictions.

“At that time, we found land to lease in the Nhon Trach 6 Industrial Zone. But when we started the 1:500 implementation, there was a problem with the planning. This was a mistake made by the relevant departments and the Dong Nai province and district for not updating the new planning. After some negotiations, the acting Provincial Chairman sent a document to the relevant agencies, based on the company’s proposal, stating that if there were no objections after a certain period, it would be considered approved. However, this issue will be resolved sooner or later,” said Mr. Binh.

When asked about the compensation for the project, Mr. Binh explained that they have yet to determine an exact figure since the Provincial People’s Committee needs to request guidance. However, with a total compensation fund of 700 billion VND for the companies, he disclosed that **CSV**’s estimated compensation would be between 100-200 billion VND.

“Overall, this amount is minimal. Each chemical plant has its technological complexities, and this compensation may not be sufficient for the relocation. However, it’s a necessary step to proceed with the relocation process,” he added.

Chau An