One more project in the red for Vinachem

11:06 | 23/01/2018

A Laos-based potassium salt mining and processing project is the fifth million-dollar loss-making project of Vietnam National Chemical Group (Vinachem) and the thirteenth of the Trade and Industry sector.

one more project in the red for vinachem
Vinachem has five companies deep in loss

The total investment of this Vinachem project is $522 million, including $105 million from Vinachem, $113 million from Vietnam Development Bank (VDB), $161 million from Bank for Investment and Development of Vietnam JSC (BIDV), and $143 million from VietinBank.

The project’s scope of exploration is 10 square metres. It is expected to be built within five years and start exploration from 2020, producing 320,000 tonnes annually. However, after two years of construction, the project has stalled in 2017.

In 2017, the 20 subsidiaries of Vinachem recorded a total profit of nearly VND2.2 trillion ($100 million), but four projects had a negative revenue of VND2.115 trillion ($93.2 million).

Earlier, in the first days of 2018, Deputy Prime Minister Vuong Dinh Hue approved the restructuring scheme of Vinachem, stipulating that this group would divest from almost all of its subsidiaries by 2020.

The four loss-making fertiliser companies are Ha Bac Nitrogenous Fertilizer and Chemical Company, DAP-Vinachem Co., Ltd., DAP2-Vinachem JSC, and Ninh Binh Nitrogenous Fertilizer Ltd. Company. Vinachem has to divest of these units after they turn their business around.

The mother company plans its equitisation for 2018-2019, leaving only 50-65 per cent of its charter capital (some VND20 trillion–$890 million) under state control.

As for its member companies, Vinachem plans to retain more than 65 per cent of the charter capital of Vietnam Apatite One Member Limited Company in 2018.

It will also maintain 50-65 per cent stakes in seven member companies, less than 50 per cent stake in nine others, and divest completely from 15 companies.

According to Vinachem’s financial report for the second half of 2017, the combined profit from its subsidiaries was VND50 billion ($2.2 million), with a loss of VND192 billion ($8.5 million) by the parent company.

one more project in the red for vinachem Government approves restructuring of Vinachem

Deputy Prime Minister Vuong Dinh Hue has signed Decision No.16 approving the restructuring plan of the Vietnam National Chemical Group (Vinachem).

one more project in the red for vinachem Vinachem fertiliser plants amassing losses

Despite restructuring, Dinh Vu and Lao Cai DAP fertiliser plants, two of the twelve loss-making projects under the management of the Ministry of Industry and Trade (MoIT), are still struggling and facing possible closure.

By Nguyen Huong

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