Vinachem scales back four major projects

It will reduce the total investment by VND1.454 trillion ($70 million) for its 2012 investment plan with four out of seven big projects having their wings clipped.

The projects are the expansion of Ha Bac urea plant,  Southern Rubber Industry’s radial tyre project, the second DAP fertiliser production project and a project to expand the group’s DAP fertiliser production capacity to about one million tonnes per year.

The northern Bac Giang province-based Ha Bac urea production expansion project’s investment capital will be cut from $199 million to $73 million. The project started construction in 2010 and is expected to produce 500,000 tonnes of urea per year by 2014.

The fund for the second DAP project in northern mountainous Lao Cai province will fall from $44.8 million to $38.46 million.

A Vinachem source said that the investment capital for the group’s fertiliser projects was mostly mobilised from  Vietnam Development Bank and Vinachem’s funds, but the bank had not disbursed enough required funds for the projects.

He said most of the group’s key projects in 2012 faced delays of more than six months due to difficulties in selecting contractors and site clearance issues.

Notably, Vinachem’s Ha Bac Urea project, with the total investment of $568.6 million, is six months behind schedule due to delayed site clearance.

In addition to supervising and speeding up the progress of key projects, Vinachem is focusing on restructuring the group, including equitisation, in line with its detailed plan submitted to the Vietnamese government for approval next year.

From January through September this year, Vinachem’s accumulated revenue was VND32.96 trillion ($1.58 billion)  up 9.4 per cent year-on-year and it earned the profit of  VND2.27 trillion ($109 million) or 84 per cent of the year’s set plan.

In the final quarter of this year, Vinachem expected to gain VND10.332 trillion ($496 million) in revenue and the profit of VND950 billion ($45.6 million), unchanged from last year’s corresponding period.