Binh Minh Plastic face difficulties despite Nawaplastic backing

Binh Minh Plastic has not received the expected assistance from Nawaplastic

Previously, in July 2018, Nawaplastic spent VND600 billion ($26.08 million) on buying an 1.17 million shares in BMP, lifting its stake in the Vietnamese plastic producer to 54.39 from 52.96 per cent.

According to Nguyen Hoang Ngan, vice chairman of the board of directors cum general director of BMP, during the past year, Nawaplastic has yet to provide BMP with solutions to increase its market share, it only shared information and experience about management, logistics, and dealing with unsold products.

Ngan added that new members also need more time to achieve a deep understanding of the operation principles of BMP because at the 2018-2023 period, four of the five members of the board of directors are in their position for the first time.

In 2018, BMP acquired a consolidated net revenue of VND4.31 trillion ($187.39 million) and pre-tax profit of VND530 billion ($23.04 million), 4 per cent and 11.7 per cent less than the initial plans.

According to the evaluation of KIS Vietnam Securities Corporation (KIS Vietnam), the entry of Hoa Sen, Tan A Dai Thanh, and Phuc Ha companies to the plastic market may impact the leading position of BMP and Tien Phong Plastic (which have built themselves empires in the northern and the southern regions).

KIS Vietnam released that the total capacity of the largest five plastic companies were 543,000 tonnes of plastic pipe per year, while the demand in 2018 was only 63 per cent of the supply. It is also necessary to add that the maximum capacity of these manufacturers is up to 766,000 tonnes of plastic pipe per year, thus the competition will continue to be stricter in next years.

BMP manufactures and trades civil and industrial products made of plastics and rubber. The company also designs, manufactures, and trades in plastic moulds for the casting industry; produces and trades machinery, materials, and sanitation equipment for the construction industry; provides interior decoration and water supply and drainage services; and offers appraisal, among others.

In 2012, Nawaplastic spent VND352 billion ($15.4 million) on purchasing 7.13 million ordinary BMP shares, representing 20.4 per cent of the firm’s charter capital. Then the Thai manufacturer increased its holding in BMP via numerous purchases.