PetroVietnam refutes baseless allegations on PVTex and BSR alliance

Workers at Dinh Vu polyester plant of PVTex

PetroVietnam is concerned about allegations being made against them. Despite the fact that none of these allegations contained actual details, PetroVietnam feels that it’s necessary to clarify that these allegations appearing across the media are completely unfounded.

The Dinh Vu polyester plant came into commercial operation in May 2014 with a capacity of 236 tonnes of polyester fibre and yarn per day, equalling 48 per cent of its designed capacity. However, the factory had to suspend operations numerous times due to unsold products piling up. It is one of the 12 projects under the Ministry of Industry and Trade incurring trillion-dong losses.

In order to deal with the above problem, in September 2017, PetroVietnam and PVTex started to look for partners to resume the operation of the factory. As the result, in December 2017, PetroVietnam and Reliance Industry Company from India decided to co-operate with PetroVietnam to restart the plant. Accordingly, Reliance would provide personnel for maintenance, material supply, and sales operations, among others.

In addition, in late December, PVTex continued looking for more partners to expand the factory. The published information complied with the regulations.

In January 2018, only the joint venture of An Phat Holdings, Fortrec Chemical, and Reliance Pte., Ltd. (APH complex) submitted dossiers and was approved to join the project.

APH joint venture proposed numerous compulsory conditions, including the buying of at least 35 per cent PP from BSR with the sale conditions matching the policies that BSR applies to other firms.

On July 24, 2018, PVTex with An Phat Holdings JSC (APH) and An Son Textile Fiber JSC signed a contract to process drawn textured yarn (DTY) made by the Dinh Vu polyester fibre plant.

According to the contract, “The factory will source 35 per cent of the necessary PP volume from BSR for 5-10 years. The selling price would be equal to the price BSR charges its customers.” This content matches with APH joint venture’s proposal.

It needs to be said that the contract between PVTex and An Phat Holdings, which is expected to be signed in the fourth quarter of this year, is an important part of resuming the operation of the entire factory.

Talking about the co-operation between PVTex and APH joint venture, Dinh Van Son, a member of the board of members of PetroVietnam, affirmed, “Selecting APH joint venture to become the partner to resume the Dinh Vu Polyesters factory was conducted publicly, meeting the assignments of the government, as well asthe board assigned to solve ineffective projects.

Son also said that PetroVietnam did not intervene in any contract between PVTex and its partners. Using BSR’s PP plastic is just one of the methods to resume the operation of the whole factory.