VIetNamNet Bridge - After asking for the government’s help to ensure sales for oil refineries, the national oil & gas group PetroVietnam has once again sought the government’s support for the sale of Polyester Dinh Vu’s (PV Tex) products.

PetroVietnam has once again sought the government’s support for the sale of Polyester Dinh Vu’s (PV Tex) products.

PV Tex, of which PetroVietnam holds 74 percent of stake, halted its operation in September 2015 because of loss. In an effort to rescue the company, PetroVietnam has repeatedly asked to underwrite PV Tex’s products and impose high taxes on foreign imports since the factory became operational in 2014.

PV Tex, capitalized at $325 million, was set up to take full advantage of the materials produced by the Dung Quat Oil Refinery and provide materials to the Vietnam’s textile & garment industry.

PV Tex has been taking a loss since it became operational. In the first year, it incurred the loss of VND1 trillion, while the losses were bigger in the following years.

PV Tex is not the only company that makes fiber products. It has to compete with four enterprises in Vietnam. The total production capacity of the industry is 500,000 tons a year, while Vietnam imports 250,000 tons of products a year.

The free trade agreements (FTAs) Vietnam has signed with other countries have made import products cheaper than domestically made products.

As PV Tex’s production cost is higher and its products are more expensive and less competitive than the products of other enterprises and the imports. As a result, domestic textile & garment companies refuse to buy PV Tex’s products. The Vietnam Textile and Garment Group (Vinatex), which was one of the shareholders, later decided to withdraw from the project.

The recently released finance report of the Phu My Fertilizer Plant showed that its investment in PV Tex was lost completely. Its capital contribution, 25.99 percent of PV Tex’s capital, which was valued at VND562 billion late 2014, dropped to VND198 billion in late 2015 and it has been used to make provisions against risks since PV Tex’s stockholder equity has become a minus figure.

This is not the first time oil & gas companies have complained about difficulties and asked for support from the government.

Some days ago, the Binh Son Petrochemistry & Refinery Company, which runs Dung Quat Oil Refinery, stated on its website that it is facing big difficulties as its products cannot be sold. The free trade agreements (FTAs) Vietnam has signed with other countries have made import products cheaper than domestically made products.

Luu Bich Ho, former head of the Institute of Strategy, commented that it is a big surprise that oil & gas firms still could enjoy big preferences.

Meanwhile, economist Nguyen Ngoc Son from Ton Duc Thang University said that enterprises must follow the rules of the market economy rather than rely on the government’s support.


TBKTSG