The Chemical-Fertilizer Business Booms: What’s Next?

24 May, 2025

The first quarter witnessed a recovery or sharp increase in the prices of fertilizer items (urea) and chemicals (yellow phosphorus, caustic soda, etc.) compared to the same period last year. As a result, businesses in this group had an encouraging period.

According to statistics from VietstockFinance, out of 26 enterprises in the chemical and fertilizer sector that announced their first-quarter financial statements, 19 units reported profit growth. Only 3 names saw a decrease in profits, and 4 companies incurred losses.

Green color covers the first-quarter results of fertilizer and chemical enterprises

The entire industry turns green

Among the four largest enterprises in the sector, three reported profit increases. Notably, Duc Giang Chemical (HOSE: DGC) earned the highest profit in the industry with a profit of 809 billion VND, a 20% increase compared to the same period. The enterprise stated that the revenue from its main products, including various fertilizers, DAP, detergents, cleaning agents, yellow phosphorus, and phosphoric acid, all witnessed positive growth. As global selling prices recovered, it was no surprise that the giant chemical company’s profits surged.

Duc Giang Chemical giant maintains bright business results for many years

Ca Mau Fertilizer (or Ca Mau Fertilizer, HOSE: DCM) increased its profit by 19% to 411 billion VND due to a positive growth in revenue (+25%). Binh Dien Fertilizer (HOSE: BFC) of the Vietnam Chemical Corporation (Vinachem) also significantly increased its revenue by 32% to more than 2,550 billion VND and reported a profit of 93 billion VND, a 43% increase.

Only Phu My Fertilizer (HOSE: DPM) witnessed a decrease in net profit to 205 billion VND (-20%). However, in reality, DPM significantly increased its revenue in the first quarter by 25% to more than 4,100 billion VND, and its gross profit also increased by 8% to nearly 655 billion VND. The enterprise stated that the reason for the decrease in net profit was due to changes in sales policies, leading to increased expenses. In addition, the price of input gas also increased compared to the same period, resulting in higher total costs.

The remaining enterprises also showed impressive growth, with those belonging to the Vinachem group standing out.

DDV (DAP – Vinachem) had its most profitable quarter in 11 quarters, with a net profit of 122 billion VND, 4.6 times higher than the same period last year; its revenue also increased by 49% to nearly 1,160 billion VND. The main reason for this performance was the increase in DAP production volume and selling price compared to the previous year.

Business results of DDV

Similarly, increased consumption volume helped LAS boost its profit by 37% to 72 billion VND, the highest level in almost 10 years. CSV also increased its revenue thanks to good consumption of its main products (caustic soda, detergents, yellow phosphorus, etc.) and higher average selling prices than the previous year, thereby achieving a profit of 52 billion VND, a 12% increase. Viet Tri Chemical (HNX: HVT) benefited from increased volume and selling prices, achieving a profit of 55 billion VND, a 55% increase. Van Dien Superphosphate (HOSE: VAF) and Ninh Binh Superphosphate (HNX: NFC) even doubled their profits, reaching 34 billion VND and 39 billion VND, respectively, 3.7 times and 2.2 times higher than the same period last year.

Meanwhile, Ha Bac Nitrogen Fertilizer (UPCoM: DHB) went down by 59%, with a profit of only 16 billion VND, although its gross profit was nearly six times higher than the same period last year (145 billion VND). The reason for this Vinachem member’s decrease in net profit was the absence of other income of 142 billion VND due to the Vietnam Development Bank (VDB) waiving interest on overdue loans, as in the same period last year. This loan was restructured from the project to renovate and expand the Ha Bac Nitrogen Fertilizer Factory, one of the 12 projects assessed by the Government as slow-moving and inefficient in the industry. This loan has been accounted for in the interest expense of DHB‘s financial statements since 2015, which was also the period when the enterprise witnessed a long chain of losses. However, thanks to the approval of loan restructuring, specifically the waiver of overdue loan interest, DHB has achieved better results.

Thanks to the waiver of overdue loan interest, DHB gradually improves its profit

In the first quarter, four enterprises in the fertilizer and chemical sector incurred losses, notably ABS and VPS, which turned from profit to loss. ABS incurred a loss of 1.7 billion VND (compared to a profit of 3.5 billion VND in the same period last year) due to economic recession, difficulties in doing business, and the need to share profits with agents and customers to maintain market share.

Regarding VPS, the consumption market decreased significantly due to weather conditions slowing down planting, leading to high inventory levels (of plant protection drugs) among agents and a consequent decrease in revenue. Therefore, the enterprise incurred a loss of 6.4 billion VND (compared to a profit of 1.3 billion VND in the same period last year).

Fertilizer prices are expected to continue rising, while chemical prices may decrease

Regarding the outlook for the following quarters, Vietcombank Securities Company (VCBS) gave contrasting opinions about the selling prices of various fertilizers and chemicals.

Concerning urea, VCBS predicted that its price in the second quarter would continue the upward trend following global price fluctuations and increased demand to prepare for the summer-autumn crop. Moreover, the application of a 5% VAT rate on fertilizer products is expected to facilitate adjustments in the selling prices of domestically produced fertilizers, enhancing their competitiveness with imported fertilizers.

On the other hand, basic chemical products are forecasted to fluctuate within a low-price range. Regarding caustic soda, there was an upward trend in the first half of the first quarter due to low inventory and the suspension of operations in many factories for maintenance, followed by a downward adjustment in the second half due to decreased consumption and increased inventory resulting from the previous price increase.

VCBS predicted that the price of caustic soda would fluctuate at a low level, as prices continued to decline in early April due to large inventories and moderate consumption from downstream industries such as aluminum and chemicals. In the short term, if the demand from downstream industries does not improve significantly, the price of caustic soda may maintain a downward trend or fluctuate within a low-price range. Additionally, according to Goldman Sachs, aluminum consumption may decrease following the significant tariff increases imposed by US President Donald Trump.

As for yellow phosphorus, VCBS forecasted a sideways trend as demand from the global semiconductor market showed signs of slowing down, with revenue from major markets exhibiting a downward trend. According to Sunsirs, the demand for yellow phosphorus from downstream industries is not significant, so prices may continue to weaken.

Furthermore, chemical enterprises have reasons to be concerned as the Ministry of Finance has recently proposed increasing the export tax rate on yellow phosphorus from 5% to 15% due to environmental concerns. If approved, enterprises that are strong exporters of this product will face negative impacts on their competitiveness.

Chau An

– 12:00 23/05/2025