PetroVietnam Ca Mau Fertilizer acquires Korea - Vietnam Fertilizer

KVF, now wholly owned by DCM, has a charter capital of approximately VND2 trillion ($85.6 million). The company's headquarters are located in Ca Mau city, Ca Mau province, with Le Van Nguyen serving as the legal representative.

In early April, DCM and South Korea's Taekwang Group signed an agreement to transfer ownership of Han-Viet Fertiliser. This acquisition is a strategic move for DCM to enhance its comprehensive nutrition solution portfolio for crops.

Han-Viet Fertiliser began constructing its NPK fertiliser plant in Ho Chi Minh City in July 2016 and started operations in December 2017, with a designed capacity of 360,000 tonnes of NPK per year. The total investment for the plant was over $60 million.

At an investor meeting in November 2023, DCM’s leadership announced the goal of finalising the acquisition of KVF by the end of 2023, aiming to double its NPK production capacity. The estimated purchase price is $25 million, compared to the original investment of $60 million.

DCM’s management considers this a favourable price, given that the acquisition includes an 8.7-hectare land parcel. The company aims to increase KVF’s sales volume to 150,000 tonnes and achieve profitability by the end of 2024.

The acquisition is primarily intended to penetrate the NPK market in southeast Vietnam, the Central Highlands, and Central Vietnam, while DCM’s existing NPK plant serves the southwest Vietnam and Cambodia regions.

Additionally, the KVF NPK plant area will be used as a storage facility for raw materials.

Vietcap Securities anticipates that higher profits from the traditional NPK segment, with the potential to double production by 2024, will offset the losses of the newly acquired NPK subsidiary.

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