Vinacomin chairman discusses strategy

What effect will the lower export duty have on Vinacomin?

Vietnam would miss out on millions of dollars if the coal export duty remains high. Our top focus in the coming time is exploiting coal for domestic consumption. We would like to see the local coal price rise so that we could focus more on local distribution as opposed to export.

Given your dominant position in the industry, pricing coal as per market demand would benefit you significantly, correct?

Vinacomin member units’ production cost has reached the limit and if the price goes up, consumers will turn on us and use imported coal. Our goal is to improve management and efficiency, as well as technology, to increase efficiency and curtail our production cost.

If coal was set at market price, we would no longer hold a decisive role as many private firms import coal; nearly a million tonnes a year now, primarily from Indonesia.

Vinacomin was charged with managing the import of coal for power plants. How is this going?

We have already signed MOUs with foreign partners and are now waiting to secure contracts with enough local buyers. When we sign contracts to buy coal from overseas, we need to have big, consistent distribution chains so we can sign long-term contracts. It is not feasible to do small-scale.

Vinacomin has mulled a share issue to raise capital, what progress has been made on this?

We have a plan to issue bonds domestically. Our liquidity is solid and several local banks have announced their support for us if we choose to do this. We expect to issue VND5 trillion ($238 million) in corporate bonds, up considerably against our initial $143 million plan.

How is Vinacomin’s divestment from non-core businesses going?

Divestment is not a major issue for us as we have little capital tied up in non-core businesses. We should have no problem getting out of Vinacomin Finance Company, as several banks have already announced their interest in buying and we are simply awaiting a government decision. Of our remaining $28.5 million in non-core investments, we have already divested a third and the remainder will be sold with suitable timelines to ensure the government’s target is reached.