12 billion-dong loss-making projects looking at brighter prospects

12:24 | 28/02/2018
Dinh Vu Polyester Plant (PVTex) resuming operations at its factory and PetroVietnam’s restarting of its group of biofuel factories are just two of many positive developments at the loss-making projects run by the Ministry of Industry and Trade (MoIT).
12 billion dong loss making projects looking at brighter prospects
The Dung Quat Bio-Ethanol Plant of PetroVietnam Central Biofuels JSC

Hoang Quoc Vuong, Deputy Minister of MoIT, has just announced that the biofuel factories of PetroVietnam have been restarting and will be able to sell products in March.

Also in March, PVTex will re-open its factory after signing a sales contract. Within the second quarter of this year, PVTex will choose a foreign or domestic firm to collaborate and operate the whole factory.

Nguyen Vu Truong Son, general director of PetroVietnam (the parent company of PVTex), said that after resuming operations at the polyester plant and agreeing on a method of co-operation, it will take 3-6 months to resume the operations of the whole of PVTex. Partners of PVTex want to solve technical barriers to importing polyester raw materials and ensure a stable power supply at DeepC Industrial Zone.

Dung Quat Shipyard (DQS) is looking for an agency to settle and audit the EPC contract of its 104,000-tonne ship purchase. Additionally, DQS owns several high-value properties that are experiencing swift depreciation and is looking to dispose of those unnecessary for production.

DAP-Vinachem (Vietnam National Chemical Group)’s Dinh Vu factory reported VND16 billion ($0.7 million) of profit in 2017 and VND66 billion ($2.9 million) in the first two months of this year. They have enhanced corporate governance and reduced costs by VND80 billion ($3.5 million) on-year in 2017.

In addition to difficulties and challenges, nitrogenous fertiliser plants like Lao Cai, Ninh Binh, Ha Bac are maintaining their production and selling products at higher prices.

Vietnam Steel Corporation (VNSteel), and Lao Cai Cast Iron and Steel Plant have completed the amendment of the joint venture contracts with the Chinese partner at the end of 2017.

The Quy Sa mine project has produced and sold 2.58 million tonnes of ore and obtained over VND423 billion ($18.6 million) profit. If the products of Quy Sa are consumed domestically and exported as well, the mine is looking at brighter prospects.

VNSteel plans to divest Thai Nguyen Iron and Steel Corporation (TISCO) and MoIT has given approval.

Phuong Nam Pulp Mill factory under Vietnam Paper Corporation (Vinapaco) was auctioned off at the value of VND1.8 trillion ($79.3 million) last year and will auctioned off again at a 10-per-cent discount. If the project cannot be sold after three auctions, it should be re-valuated.

The Politburo and the National Assembly confirmed not spending more money on these businesses and that they plan to treat them based on market principles.

At the meeting of the steering committee on handling the existing weaknesses of a number of inefficient projects and enterprises, Deputy Prime Minister Vuong Dinh Hue also stressed that the Politburo and the National Assembly confirmed not spending more money on these businesses and that they plan to treat them based on market principles.

The DPM also noted that there are still difficulties, such as EPC contract disputes, project settlement issues, and working capital arrangements, that need to be overcome.

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By Nguyen Huong

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