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Industry ministry still struggling with 12 loss-making projects
Friday,  Sep 8, 2017,16:27 (GMT+7)

Industry ministry still struggling with 12 loss-making projects

HCMC - The Ministry of Industry and Trade is still grappling difficulties in dealing with the 12 loss-making investment projects though there are bright prospects for some of them.

The ministry told Deputy Prime Minister Vuong Dinh Hue, head of the steering committee for handling the 12 projects, at a meeting in Hanoi on September 6 that Viet Trung steel mill and DAP 1 fertilizer plant in Haiphong City had begun to be profitable, reports the Government news website. For the ethanol projects in Quang Ngai and Phu Tho provinces, some investors have shown interest in them.

A report delivered at the meeting by the ministry said four fertilizer projects of the Vietnam Chemicals Group have resumed production but one of them, DAP 2 in Lao Cai Province, has stopped operation for maintenance since August 12.

However, all of them but DAP 1 in Haiphong City have yet to be financially efficient as input costs have remained higher than expected.

For five projects under the Vietnam Oil and Gas Group (PVN), the Dung Quat ethanol plant in Quang Ngai Province has not been able to return to production due to the lack of funding for solving problems with its wastewater treatment facility.

Moreover, shareholders have been discouraged by the lower-than-expected fuel prices which might lead to losses for them. Ethanol is mixed with A92 gasoline to make E5 bio-gasoline, a fuel which is cheaper than A92 and A95 petrol but has yet to win consumer confidence due to concerns over quality.

The ministry said at the meeting that several investors have expressed interest in getting involved in this ethanol project and that shareholders have been told to work with investors over the possibility of clinching a business cooperation contract to bring the facility back to life.

Meanwhile, PVN has told its subsidiary PVOil to draw up plans to divest from an ethanol plant in Phu Tho Province and another in Binh Phuoc Province. The ministry’s report said there has appeared an investor interested in the Phu Tho facility.

PVTex, a polyester fiber factory in the northern city of Haiphong, has remained in distress as it has been financially unable to carry out a court decision to pay out more than VND73 billion in water and power bills for the authority of the Dinh Vu Industrial Park where PVTex is located. Meanwhile, the Government is determined to not inject new capital into PVTex.

For Dung Quat Shipyard, PVN has asked its affiliates to use services at the shipyard to help keep it afloat and secure jobs for workers there. But there is a high possibility that the shipyard could be disbanded.

In two steel projects under the Vietnam Steel Corporation, the ministry said, after the Government took back a VND1 trillion budget for the second phase of Thai Nguyen steel plant, Chinese contractor MCC has returned to the negotiating table to solve the lingering problems with this project.

The other steel project, Viet Trung steel mill, has reported profit since March this year, with first-half profit estimated at VND67 billion and full-year tax payments projected at VND290 billion.

Deputy PM Vuong Dinh Hue told the State Bank of Vietnam to work with commercial banks over plans to restructure debts owed by the 12 projects. These plans would be used as a basis for the Ministry of Finance to weigh rescheduling the depreciation and amortization process of the 12 projects.

Meanwhile, the owners of these projects must find ways to cut costs and implement restructuring plans so that they could get out of the woods, Hue noted.

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