Haiphong fertliser project in state of flux

The Ministry of Industry and Trade (MoIT) recently met with leaders from developer Vietnam National Chemical Group (Vinachem) and DAP-Vinachem Company Limited to put the $172.38 million Haiphong DAP plant under the microscope.

Project construction started in 2003 at the Haiphong city’s Dinh Vu Economic Zone and has basically completed at present.

However, the plant has not been handed over to DAP-Vinachem Company Limited following a year of tests. It is currently producing 172,620 tonnes of DAP fertiliser per year which is 52.3 per cent of the total designed capacity of 330,000 tonnes annually.

Vinachem general director Do Duy Phi said the corporation disagreed with two Chinese management consultants (PMC) and engineering-procurement-construction (EPC) – National China Construction Corporation - contractors over some contract terms.

The most critical problem was seen with the EPC bid package with many pending issues related to construction, technology, equipment and measurements.

Accordingly, the EPC contractor pledged the plant’s fertiliser would reach 64 per cent diammonium phosphate (DAP) concentration, but in fact the fertiliser only reached 61 per cent.

Efforts to deal with environmental pollution at the plant are also pending, while the consumption of electricity, oil and water are above designed levels.

The MoIT’s Department of Chemicals head Phung Ha suggested Vinachem negotiate with the EPC contractor to raise the fertiliser quality to 64 per cent DAP concentration to avoid the massive imports of Chinese-made fertiliser. 

“With 61 per cent DAP concentration, the plant’s fertiliser will have to compete fiercely with similar items in the market,” he said.

In regard with environmental protection issues, Vinachem deputy general director Hoang Van Lieu said the waste resulted from the plant’s production was not toxic based on recent survey results conducted by the Vietnam Environment Administration.

He also said a dumping site for the plant’s waste had been built on 13 hectares surrounded by dykes to avoid endosmosis to underground water resources.

Vinachem has also worked on a waste recycling plan under which the waste will be used in producing gypsum or other industrial additives.

Vinachem said it had joined hands with the Chinese EPC contractor to address the plant’s unsolved issues. 

The DAP project’s management unit had asked for EPC bid package approval at relevant ministerial agencies to bring the plant online to benefit the domestic DAP market.

MoIT’s Deputy Minister Nguyen Nam Hai said the bid package was being weighed up and would be forwarded to the prime minister for approval.

The Haiphong fertiliser plant will help the country save around $145 million on importing DAP fertiliser each year, contribute more than $3.2 million to state coffers and create jobs for 600 workers.