YTL Cement to cement its reputation

April 23, 2013 | 10:31

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Malaysia’s YTL Cement may become a new investor of Vinaconex’s operating $285 million Cam Pha Cement facility in northern Quang Ninh province.

photo YTLCement.com

According to Vinaconex, one of the leading real estate developers in Vietnam, after a long time of offering stakes to potential investors, YTL Cement has agreed to negotiate the conditions to buy in Cam Pha Cement.

Vinaconex’s pull-out of Cam Pha Cement was the firm’s restructuring step as it has been strongly impacted by the current domestic real estate downturn.

“The restructuring of Cam Pha Cement is a vital condition for the firm [Vinaconex] to recover its capital investment and make the financial status become better,” the company’s statement said.

Among interested investors, YTL Cement offered the best proposal to Vinaconex and it committed to provide Cam Pha Cement with preferential loans.

Vinaconex said it was asking relevant Vietnamese governmental agencies’ approval to sell stakes to YTL Cement.

Heavily impacted by the current downturn in the domestic real estate market, Cam Pha Cement has been operating in the red since 2011. By the end of 2012, Cam Pha Cement reported the total loss of VND1.2 trillion ($57 million).

Last year , Vinaconex had to spend nearly VND2.4 trillion ($114 million) paying debts for Cam Pha Cement. This sum pushed Vinaconex into a very difficult financial status, the company announced.

The prime minister has recently permitted Vinaconex to sell up to 75 per cent stakes in Cam Pha Cement to interested investors.

Put into operation in 2010 with the total investment capital of VND6 trillion ($285 million), Cam Pha Cement has the annual capacity of 2.3 million tonnes. Currently, Vinaconex holds 99.6 per cent stakes of Cam Pha Cement.

Vinaconex started seeking potential investors to join in Cam Pha Cement in 2009. However, due to the global financial crisis, not many investors showed their interests in the factory and Vinaconex decided to put the plan on hold until April 2010.

State-run Vietnam National Cement Corporation (Vicem) and Heidelberg Cement, one of the biggest cement manufacturers in Germany previously wanted to buy in Cam Pha Cement. But no deal was reached.

By Bich Ngoc

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