Industry Ministry’s unprofitable projects revived thanks to outsourcing jobs

Some unprofitable projects under the management of the Ministry of Industry and Trade (MOIT), called ‘trillion-dong zombies’, have begun making money.

The Dinh Vu Polyester Plant (PVTex) has taken losses continuously since it became operational in May 2014. On September 17, 2015, the plant stopped operation.

Industry Ministry’s unprofitable projects revived thanks to outsourcing jobs


Thirty one months later, on April 20, 2018, the plant resumed operation of some production lines. In Q1 2019, the total output was 4,194 tons, including 1,438 tons PVTex produced for itself and 1,756 tons for An Son Company. The total revenue PVTex in the period from April 20, 2018 to October 31, 2018 was VND58.33 billion and the profit before fixed cost was VND3.313 billion.

A source from PetroVietnam, the investor of PVTex, said the preparation for plant resumption was difficult. In December 2017, PVTex issued documents calling for cooperation with partners. An Phat Holdings (APH) – Reliance Pte Ltd (India) – Fortrec Chemical (Singapore) suggested the cooperation plan.

The Dinh Vu Polyester Plant (PVTex) has taken losses continuously since it became operational in May 2014. On September 17, 2015, the plant stopped operation.

 

Three months later, on April 27, 2018, PVTex and APH group signed an MOU on cooperation. In November in the same year, PVTex signed a contract on outsourcing DTY fiber with APH/AST.

The latest report of PVTex showed that in Q1 2019, the plant kept stable operation of 10 DTY production lines to implement the order from An Son Company. About 2,000 tons of DTY fiber will be provided to the domestic market and partners from South Korea and Japan.

On May 8, 2019, PVTex put two other production lines into operation, increasing the capacity by 20 percent to 900 tons a month.

The Quang Ngai Biofuel Plant is also fulfilling outsourcing contracts. The plant restarted its operation in October 2018 following the outsourcing contract signed with Tocontap.

Prior to that, in April 2015, the plant had to stop operation after two years of running at 54 percent of capacity only.

Difficulties

Though plants have resumed operations, an expert said, big difficulties are still ahead.

PVTex resumed the operation of some workshops, mostly DTY fiber production lines, not the entire complex. Meanwhile, Quang Ngai biofuel plant’s operation will heavily depend on the market fluctuation.

MOIT’s report to the National Assembly in mid-May showed that of six projects which incurred big losses in the past, two have begun making profit. They are DAP No 1 fertilizer plant in Hai Phong which made a profit of VND195.55 billion (up by VND180.767 billion compared with 2017) and the Vietnam-China Steel Plant with VND566.8 billion (up by VND290.6 billion).

Chi Mai

Trade and Industry Ministry urged to sell unprofitable projects

Trade and Industry Ministry urged to sell unprofitable projects

Experts believe that unprofitable projects invested by enterprises under the Ministry of Industry and Trade’s (MOIT) management should be sold even at a loss.

 
 

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