Phong Phu director discusses ITG conflict

Phong Phu’s general director Pham Xuan Trinh

>> ITG shut prominent textile plant amid dispute

The complex has been static for around two years now. Why?

The goal of the JV was to expand production scope in both width and depth. We wanted to extend our global reach and get experience from our foreign partner. For us, investment efficiency is a leading criterion in any project and when the complex’s operations did not meet our expectations we shut it down to prevent further losses.

Phong Phu was a 40 per cent partner and investor in an $80 million project. That’s a lot of money. How will the company deal with this?

Right now both sides are waiting for a final decision from the court and until that time our capital is stuck.

We understood that when we stopped the project we were going to take losses. But an advantage was the lessons learned from working with an American giant like ITG.

As this is a labour-intensive field, didn’t shutting down the project put a lot of people out of work?

The project had around 3,000 workers and the shutdown has affected them. But as of right now, we can’t do anything until the court makes its decision.

Is Phong Phu considering a buy out?

We have actually looked at finding a new partner or selling our stake. The next step is sorting out issues related to capital, debt, and labour policies. I won’t broach the topic of   a buy out at this time but I will say that this a huge project and we would need to be in a position to tackle a wide range of issues such as production, technology, and supply chains.

What we really want is to sit down with ITG and try to find ways to continue the project.

What has Phong Phu learned from this situation?

We are a member of the Vietnam National Textile Garment Group (Vinatex) and we are an active investor, so it is normal for some projects to work out while others don’t.

We have been working with foreign partners for over 20 years and our other projects are running well. For example, we have a $14.6 million JV with the UK’s Coats Holdings, which started in 1989. This project turns out thread and yarns and has carved out a fine niche both at home and abroad. Our other two JVs, one with a French and the other with a Swiss partner, produce trousers and are running effectively.