Vicem suffers significant losses for two consecutive years

The Vietnam Cement Industry Corporation (Vicem), a state-owned enterprise under the Ministry of Construction with a 45-year history, has faced severe financial challenges over the past two years.

During a recent meeting, Minister of Construction Tran Hong Minh directed Vicem to reassess and adjust its 2025 business strategy after the company reported consecutive years of substantial losses.

In 2024, the parent company's profit was negative $9.9 million (236.8 billion VND), while consolidated losses reached $58.7 million (1.4 trillion VND).

This follows a 2023 loss of approximately $47.4 million (1.129 trillion VND), marking the first time in its history that the corporation reported negative earnings since public disclosures began in 2016.

Challenges facing the cement industry

According to Nguyen Quoc Viet, Chairman of Vicem, the building materials sector faced unprecedented difficulties in 2024, particularly in cement production.

The industry saw a significant oversupply of cement, while selling prices continued to decline, and raw material and fuel costs remained high.

To cope with these challenges, Vicem implemented a range of comprehensive business solutions throughout the year.

Looking ahead to 2025, the company plans to intensify these efforts with a more decisive and thorough approach.

Minister demands strategic overhaul

During the meeting, Minister Tran Hong Minh urged Vicem to innovate its management and operational methods.

He stressed the need to modernize corporate governance, embrace advanced technologies, and review all input stages to minimize unnecessary expenses.

The minister emphasized that cost-saving measures should be prioritized, along with cutting redundant procedures to improve efficiency.

He also directed Deputy Minister Nguyen Viet Hung to take immediate action to address the difficulties facing the company.

Legal issues and financial risks

Earlier this year, the Police Department for Corruption, Economic, and Smuggling Crimes initiated criminal proceedings against four former Vicem executives, including:

Le Van Chung - Former Chairman of the Board of Members

Nguyen Ngoc Anh - Former General Director

Du Ngoc Long - Former Project Management Director

Hoang Ngoc Hieu - Former Head of Appraisal Department

Three of these individuals were detained, while Nguyen Ngoc Anh was granted bail. The executives are accused of "violating regulations on the management and use of state assets, causing loss and waste."

In late 2023, the Ministry of Finance's Inspectorate identified numerous high-risk investments made by Vicem subsidiaries, with provisions of over $126 million (3 trillion VND) needed to cover potential losses.

The Ministry urged Vicem to evaluate and address underperforming investments to safeguard its financial stability.

Hong Khanh