The Government Inspectorate has urged the Ministry of Public Security to investigate PetroVietnam's USD359-million polyester manufacturing plant after it made huge losses.

  

Dinh Vu polyester manufacturing plant

The plant started operations in 2008, and is expected to help reduce the country's reliance on imports of the same kind of fibre by 30%.

However, just two years after the operations, Dinh Vu polyester manufacturing plant (PVTex) made huge losses of VND1.47 trillion (USD69 million), including VND21 billion in 2012; VND366 billion in 2013 and VND1.08 trillion in 2014. As a result, the plant had to close by late 2015, leaving 1,000 workers unemployed.

According to the Government Inspectorate, the initial investment capital of the plant was USD325 million, however, later, it was raised to USD359 million.

In 2013, the government requested PetroVietnam to cut its stake in PVTex from 56% to 36%. However, PetroVietnam actually increased its stake in the firm to 75%, violating the instruction. By late 2014, PetroVietnam owned PVTex entirely.

The Government Inspectorate said that the agency has detected signals of violations in selecting contractors as well as purchasing equipment for projects. 

Much of the machinery and equipment faced technical problems just a short time after being put into operation, which was one of the factors affecting product quality.

The Government Inspectorate has urged the Ministry of Public Security to investigate into PVTex.

PetroVietnam claimed that one of the main reasons behind PVTex's losses was the significant fall in global cotton and yarn prices in 2015 that forced the already low prices of PVTex’s products to sink even lower. 

In addition, volatile exchange rates last year inflated the cost of input materials, driving the company to face stiff competition from rivals from Thailand, China and other domestic enterprises.

Dtinews