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VCA faces significant pressure as it is fined and forced to relocate from Bien Hoa Industrial Park 1 – Illustrative image |
VICASA Steel Joint Stock Company – VNSTEEL (HOSE: VCA) has just announced an administrative fine decision from the People’s Committee of Dong Nai province related to violations in the field of environmental protection at the Company’s production facility.
Specifically, the decision issued on May 09 clearly stated three main violations of VCA: Operating without an environmental permit as required, despite the fact that the production facility on Road No. 9, Bien Hoa Industrial Park 1, An Binh Ward, Bien Hoa City is subject to mandatory permitting by the provincial People’s Committee. Incomplete reporting on environmental protection work in 2023 and 2024. In both years, VCA failed to mention the activities of warehouse and workshop leasing for parking lots, goods storage, and steel frame processing.
For these violations, the total fine imposed on VICASA amounts to VND 335 million. The People’s Committee of Dong Nai requested VCA to temporarily stop the operation of waste sources without a permit within 3.75 months from the date of receiving the decision. In addition, the company is forced to relocate its production facility to a location suitable for environmental planning in accordance with Decision 586 dated 07/03/2024 of the Prime Minister and complete it before December 01, 2025, according to the roadmap in the project for transforming Bien Hoa Industrial Park 1 into an urban-commercial-service area.
All costs for organizing the implementation of remedial measures shall be borne by VCA. The company has 10 days from the date of receipt of the decision to pay the fine into the State Treasury of Area XV.
This move comes as the People’s Committee of Bien Hoa City has announced land retrieval for the Bien Hoa Industrial Park 1 conversion project. According to Notice No. 438 dated April 11, 2025, VCA is one of the affected organizations, with a total land area of 130,957.6 m2 to be retrieved.
The progress of land retrieval, site clearance, and compensation is expected to be completed by December 2025, with a detailed roadmap ranging from surveys in May to compensation payments at the end of the year. The retrieved area belongs to land lots No. 151, 164, and 147 in An Binh Ward, Bien Hoa City.
Deteriorating business performance and plunging stock price after a sharp increase
VICASA was transformed from a state-owned enterprise, Bien Hoa Steel Company, specializing in steel rolling and steel billets. The company operates mainly in the southern region, including Ho Chi Minh City, Ba Ria – Vung Tau, Nha Trang, and Can Tho.
In terms of business results, in the first quarter of 2025, VCA‘s net revenue reached nearly VND 311 billion, up 10% over the same period last year. However, gross profit margin decreased to 2.2% due to a sharp increase in cost of goods sold, causing net profit to drop to VND 36 million, down 97%. The company stated that it has made efforts to cut costs to cope with volatile raw material prices and challenging market conditions.
| VCA’s quarterly business results for the period 2023-2025 |
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On the stock exchange, VCA shares are currently trading around VND 10,150 per share, down 14% in the past quarter but still up more than 6% over the year. Previously, this stock once attracted attention when it surged from VND 8,500 per share to VND 17,600 per share (more than doubled) in just 2 weeks in November 2024, with a chain of 10 consecutive ceiling sessions, before plunging again.
| VCA share price movement in the past year |
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VCA explained that the price volatility was due to market supply and demand, and that its business operations remained normal, with no price intervention by the company. This development followed the information that VNSTEEL – the parent company, planned to auction 65% of VCA‘s shares at a starting price of VND 24,158 per share, equivalent to a valuation of VND 238.5 billion.
Changes in senior personnel amid restructuring
Along with VNSTEEL’s plan to divest its capital, a series of personnel changes have taken place at VCA. On March 14, Mr. Nguyen Xuan Son – Chairman of the Board, and Mr. Nguyen Phuoc Hai – Head of the Supervisory Board, simultaneously resigned due to retirement and health reasons. At the annual general meeting of shareholders on April 09, Mr. Nguyen Van Thoan, a member of the Board of Directors, also withdrew due to work reasons.
The general meeting of shareholders approved the resignation requests and elected Mr. Nguyen Phu Duong and Mr. Duong Van Ha to the Board of Directors for the term 2023-2028, and elected Ms. Ngo Thi Minh Nguyet to the Supervisory Board. Subsequently, Mr. Duong was elected as the new Chairman of the Board of Directors of VCA.
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