BMP closes on abolishing foreign ownership limit

BMP is expected to finish lifting the cap in the last months of 2017

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After securing shareholders’ approval to lift the foreign ownership cap to 100 per cent, on June 14, 2017, BMP submitted a document to the State Securities Commission of Vietnam (SSC) to approve expanding the foreign room.

However, after three months, BMP’s proposal has yet to be approved. The reason is that BMP has two businesses operating in conditional business lines, including materials and chemicals trading, import, and export (code 4669), and chemicals assessment, testing, and analysis (code 7120).

Accordingly, SSC requested BMP to ask the Ministry of Industry and Trade (MoIT) about these two businesses. On July 19, 2017, MoIT responded in Document No.6463/BCT-KH, pointing out that these two business lines are not restricted anymore.

On July 24, 2017, BMP sent MoIT’s response to SSC. In return, on August 25, 2017, SSC requested BMP to submit further documents related to these two businesses.

On September 14, 2017, BMP announced submitting Document No.05/CV-BM/TGD-2017 to SCC on September 6, 2017, providing the necessary information to lift its FOL and finalise the plan on State Capital Investment Corporation (SCIC)’s divestment from BMP in 2017.

In particular, regarding conditional business lines, BMP explained that the chemicals and materials that BMP trades, imports, and exports are not on the list of prohibited or restricted business areas in Vietnam.

By proactively adding necessary information to complete all procedures, it is believed that the day the foreign room restrictions on BMP are abolished is coming. Besides, recently, the trading volume of BMP stock has sharply increased, which lead to predictions of a 100 per cent foreign room in the very near future.

BMP has reached its FOL since Nawaplastic Industry Co., Ltd., a Thai PVC plastics manufacturer, acquired 20.4 per cent of the stakes.

Recently, a representative of BMP revealed that Nawaplastic Industry showed interest in raising its holdings in the company by purchasing SCIC’s stocks to be divested.

Currently, SCIC is the biggest shareholder of BMP with more than 24 million shares, an equivalent of 29.5 per cent. It is expected that along with expanding the FOL, the state divestment from BMP will lure in many foreign investors.

BMP holds more than 50 per cent of the market share in the southern areas and has a wide distribution network with more than 1,500 distribution agencies in all over Vietnam.

In the first half of 2017, BMP generated more than VND1.8 trillion ($79.2 million) in revenue and earned a pre-tax profit of VND280 billion ($13.32 million), an increase of 6.5 per cent and a reduction of 34 per cent, respectively, compared to the same period last year.

As a result, BMP has completed 45.5 per cent of the targeted revenue and 40 per cent of the targeted profit for 2017.

Explaining for the reduction in profit, Nguyen Hoang Ngan, general director of BMP, said that the declining profit was due to the rising price of input materials. In particular, during the first six months of 2017, BMP's input material price increased by more than 17 per cent compared to the same period last year.

The list of BMP's foreign shareholders