PVFCCo - Trang chủ | Tổng công ty Phân bón và Hóa chất Dầu khí

BẢN TIN
QU
Ý
TỔNG CÔNG TY PHÂN BÓN VÀ HÓA CHẤT DẦU KHÍ
3
DP
NĂ
M
M
20
14
Vững
vàng
vượt qua thách thức
Trang 4
Breaking the barriers
THỊ TRƯỜNG PHÂN BÓN
ỔN ĐỊNH
NGUỒN CUNG DỒI DÀO
Trang 14
Stable fertilizer market - Abundant supply
PVFCCo
IFA
đóng vai trò
ngày càng
tích cực trong
Trang 30
PVFCCo plays a bigger role in IFA
CỔ TỨC
25
% Trang 6
VẪN KHẢ THI
A dividend ratio of 25% is still feasible
05
07
/33
14
/35
/42
17
31
/45
24
/52
28
30
/56
/58
Nội dung
Thư ngỏ Ban biên tập
Vững vàng vượt qua thách thức. 04
Tổng biên tập
Ông LÊ CỰ TÂN
Chủ tịch HĐQT
TỔNG CÔNG TY PHÂN BÓN
VÀ HÓA CHẤT DẦU KHÍ
Tòa nhà PVFCCo,
43 Mạc Đĩnh Chi,
Phường Đa Kao,
Quận 1, Tp. Hồ Chí Minh
Tel: (08) 38 256 258
Fax: (08) 38 256 269
www.dpm.vn
Ban biên tập
Ông CAO HOÀI DƯƠNG
Tổng giám đốc
Bà NGUYỄN THỊ HIỀN
Phó Chủ tịch HĐQT
Bà LÊ THỊ THU HƯƠNG
Phó Tổng giám đốc
Ông HUỲNH KIM NHÂN
Kế toán trưởng
Ông TRƯƠNG THẾ VINH
Chánh Văn phòng HĐQT
Bà VŨ THI
Trưởng Ban Tiếp thị và Truyền thông
Ông ĐOÀN QUỐC QUÂN
Trưởng phòng Tiếp thị
Bà NGUYỄN THỊ NGỌC MAI
Phó phòng Truyền thông
Ông VŨ ĐÌNH KHÔI
Chuyên viên Ban Tiếp thị và Truyền thông
Ông NGUYỄN ĐĂNG KHOA
Chuyên viên Ban Tiếp thị và Truyền thông
Phỏng vấn Tổng giám đốc
Cổ tức 25% vẫn khả thi. 06
Tin tức
Sự kiện nổi bật. 08
Tin cổ đông. 12
Thị trường phân bón
6 tháng đầu năm 2014
Thư ký Ban biên tập
Bà TRẦN THỊ HỒNG NHUNG
Ban Tiếp thị và Truyền thông
Cộng tác viên
Bà CHẾ THỊ MAI TRANG
Công ty Cổ phần Chứng khoán Bảo Việt
Số giấy phép
501-2014/CXB/09-93/HP, ngày 12/8/2014
Đơn vị thiết kế
Công ty TNHH Thiết kế Lập Phương
Nhà in
Công ty TNHH MTV Itaxa
/59
14
Báo cáo hoạt động 6 tháng đầu năm 2014
Kết quả hoạt động sản xuất, kinh doanh. 20
Báo cáo tài chính. 22
Thị trường chứng khoán
Thị trường chứng khoán tăng trưởng ấn tượng. 24
Cổ phiếu DPM xác lập mức giá mới. 25
Chuyên đề công nghệ
Công nghệ sản xuất NPK 28
và sản phẩm NPK Phú Mỹ.
Quan hệ Quốc tế
PVFCCo đóng vai trò ngày càng tích cực trong IFA. 30
PVFCCo tổ chức tập huấn cho cán bộ nông nghiệp. 31
Contents
Message from Board of Editors
32 Breaking the barriers.
CEO interview
34 A dividend ratio of 25% is still feasible.
News
36 Event highlights.
40 Newsflash for shareholders.
42 The fertilizer market
of 1HY2014
Business performance of 1HY2014
48 Financial highlights.
50 Financial statements.
Stock market
52 Vietnam stock market shows impressive growth.
53 DPM stock benchmarks new level.
Technology
56 NPK production technology
and Phu My NPK project.
International relations
58 PVFCCo plays a bigger role in IFA.
59 PVFCCo held training courses
for agricultural specialists at IRRI.
www.dpm.vn
3
MESSAGE FROM BOARD OF EDITORS
Breaking
the barriers
In the first six months, the key concern of shareholders is
the schedule and level of gas price adjustment. The Board of
Directors is well aware of this problem and has attempted
to negotiate with suppliers to agree at the lowest gas price,
based on the gas formula stipulated by the Government.
40 %
VALUED SHAREHOLDERS
AND INVESTORS,
T
he first six months of
2014 have passed by
with positive signs of
economic
recovery
in Vietnam. The
economic
restructuring
and
enterprise
reform have shown good progress.
However the difficulties and
challenges still remain, such as,
sovereignty dispute of East Sea,
bad debts of enterprises, frigid
real estate market, production
index minimal recovery… As
for PetroVietnam Fertilizer and
Chemicals Corporation (PVFCCo),
apart from the common general
slowdown of the economy
and difficulty of the fertilizer
market, there are difficulties and
challenges to be overcomed:
Firstly, the Government has fixed
the market price of gas earlier than
expected, as a result, gas price in
the second quarter jumped 12%
from the previous quarter. This
exposed the burden of input cost
in fertilizer production;
Secondly, the strict control of truck
load has increased the average cost
of transportation. Meanwhile, the
fertilizer products absorbed the
significant transport cost.
32
INVESTORS BULLETIN - QUARTER 3/2014
PVFCCo CONTROLS 40%
UREA MARKET
Thirdly, the Urea price of domestic market and
international market remains low and sometime
decreasing. This is because many new factories in
the world are put into production, such that supply
exceeds demand.
Despite the dramatic difficulties, under the guidance,
leadership and support of the Government,
PetroVietnam Oil and Gas Group, the support
of shareholders and outstanding efforts from
employees, the Corporation has definitely met the
performance indicators for the last six months, as
approved by Annual General Shareholders Meeting,
even though there were some earlier gaps.
As for development investment, it is said that the first
six months saw the optimistic improvement compared
to 2013. The Corporation has implemented the EPC
Contract to build the UFC85/Formaldehyde unit,
approved the project of enhancing the capacity of
existing NH3 unit and building the chemical technology
- based NPK factory. In order to maintain and promote
the position of the Corporation in the next few years,
after the key projects start operating, it has planned a
comprehensive strategy for the period of 2014 – 2017
for the fertilizer and chemicals business, and R&D.
In the last six months, to deal with the uncertainty,
the Corporation will consider to adjust downwards
the business targets and report to the shareholders
and investors. The Company leaders commits to
endeavor to manage the costs, optimize the business
performance, and to maintain the status as the top
company in fertilizer business.
Through the Investors Bulletin, it is our intention to
share to shareholders and investors the highlighted
information on our business performance in the first
six months of 2014, as well as our confidence on the
growth of the Company in the future.
I would like to express thanks for the understanding
and trust from the shareholders, investors toward
DPM’s stock, its Board of Directors and Managers.
Best regards,
Chairman
Editor in Chief
LE CU TAN
www.dpm.vn
33
CEO INTERVIEW
A dividend
ratio of
25
With the efforts of the Corporation, I hope that actually
realized profit will be decreased less than the increase
of input costs and no matter how difficult it may be,
the Management will try to realize its commitment as
to sufficient profit to pay dividends at minimum rate of
25% par value for the year 2014.
%
IS STILL FEASIBLE
H
But, does it look positive when 6-beginning-month
profit of DPM was only 660 billion dong?
It should not be possible to base on 6-beginningmonth result to expect the annual result. Due to
seasonality, profit for the first half of a year always
accounts for more than 50% of annual profit. Also,
gas price has been applied since Q2. In addition, the
control of road transport load has increased costs of
road transportation, and the changes of water and sea
transport also impact costs of the Corporation. Deposit
interest rate is likely to continue decreasing for the last
6 months of the year. As stated above, however, we will
try to maximize profit under new circumstances.
Source: Security Investment Newspaper
ow will it impact on profitability when input gas
price increases by 12.5%? Are ongoing major
projects attractive enough to help PetroVietnam
Fertilizer and Chemicals Corporation (security code: DPM)
return to being a profitable company as in previous years?
Security Investment Newspaper had an interview with
Mr. Cao Hoai Duong, President & CEO of DPM.
According to new gas price
calculation formula since April
01st, 2014, selling price offered to
Phu My Urea Plant is determined
at 46% of FO petroleum price in
Singaporean market plus costs of
operation and transportation, or
equivalent to an increase of 12.5%
compared to that in previous
period. How will this impact profit
plan of DPM?
Certainly, when gas price increases,
it will impact profit of DPM as gas
accounts for 70% of cost price
of Phu My Urea. Under this new
formula, DPM is buying gas at
USD 7.5/MMBTU. For each gas price
increase of USD1/MMBTU, input
costs of DPM will be increased by
400 billion dong resulting a profit
decrease of 400 billion dong. For
input gas increase rate of 12.5%,
to an increase of 8.4% of cost
price, profit will be decreased
accordingly.
So, DPM is facing a risk of annual
input gas price fluctuation. How
do you minimize this risk, Sir?
It is true that under the new
formula, gas price will fluctuate
together with petroleum price
34
INVESTORS BULLETIN - QUARTER 3/2014
International price of Urea fertilizers is on a
decrease trend and supply exceeds demand, is that
a “dangerous factor” to DPM?
and be hard to be predictable.
However, chart shows that the
prices of FO petroleum and Urea
are fairly comparable Urea price
increases with the increase of
gas price, profitability is still
maintained. As for objective
factors, Urea market has become
fiercely competitive in recent 2
years when Ninh Binh and Ca
Mau plants come into operation;
but DPM still maintains its market
shares of 25% in the North, 70 75% in the Central, Highland and
South East regions, and 35% in the
South West region.
Nationwide, DPM accounts for 40%
of Urea market. The Plant always
functions at over - 100% capacity
and all of the output are consumed
effectively.
Does DPM apply for decrease of
annual profit plan for the year
2014? And is the commitment to
pay cash dividend at rate of 25%
still feasible?
We are asking for the opinion from
a major shareholder, PetroVietnam
Oil and Gas Group (PVN), for an
amendment of plan 2014. The
profit amount of 1,384 billion dong
Surely, compared to the peak of USD 500/ton in
2012, current international price of Urea fertilizers
is on a decrease trend. What matters is how much
and how long it will be. If international price is
maintained at USD 350/ton FOB, fertilizer industry
may still generate an acceptable profitability.
When gas price increases, there are many opinions
that DPM is no longer a growing security. What do
you think about this?
authorized by the Shareholders'
Meeting was developed closely
based on former prices; thus, it is
numerically certain to decrease
profit by the increase of costs. But
it is very likely that PVN will assign
to us a plan to work toward. On the
other hand, the Corporation is taking
a range of cost reduction measures,
such as adopting production
ratings, implementing a ratingbased penalty or bonus policy,
exercising technical innovations to
reduce costs, etc.
A company's growth is like a person's one: there are up
and down like a sine chart. What matters, however, is
whether it is going up or going down. DPM is on a still
stand now, but it is a necessity to move forward to a
new development stage with an up-going sine chart.
Until the end of 2016 and early 2017, the completion
of ongoing projects will take DPM to a new growing
stage.
Can you give us a little idea about the potentials of
NH3 - NPK and UFC 85 projects that the Corporation
is investing in?
When they come into operation, these two new
projects will contribute total revenue of about 4,500
billion dong and profit of about 700 billion dong per
year. Annually, our country has to import over 300,000
ton of NH3 and 500,000 ton of high-quality NPK while
our plants, upon the operation, will supply only 45,000
ton of high-quality NH3 and 250,000 ton of high-quality
NPK to the market.
When NH3 - NPK
and UFC 85 come
into operation, these
two new projects
will contribute total
revenue of about
4,500 billion dong
and profit of about
700 billion dong per
year.
www.dpm.vn
35
NEWS
EVENT HIGHLIGHTS
PVFCCo IS RECOGNIZED
AS “EXEMPLARY EQUITIZED
ENTERPRISE”
PVFCCo IN “TOP 50 BEST
LISTED COMPANIES” FOR THE
2ND CONSECUTIVE YEAR
O
T
I
n 2014, PVFCCo is selected in the “Top 50 Best
Listed Companies” for the 2nd consecutive year by
FORBES VIETNAM. This recognition has affirmed
PVFCCo as a large enterprise with stable growth
and leading the market position and delivers high
profits for shareholders.
he “M&A Conference 2014” describing “M&A - Second
Wave” was held on 7th August 2014 in Hochiminh
City. This is an annual forum of Vietnam Investment
Review Magazine and AVM and supported by Ministry
of Planning and Investment. The intention is to connect
enterprises and potential investors. At the forum,
PetroVietnam Fertilizer and Chemicals Corporation
(PVFCCo) was honored as an “exemplary equitized
enterprise”. Mr. Nguyen Van Tong, Deputy Director
PVFCCo, was at the conference to receive the award. This
year’s Forum attracted the participation of outstanding
enterprises to discuss an emerging M&A topic in
Vietnam: M&A Second Wave and specific opportunities
for Vietnamese enterprises; equitization and M&A
opportunities of state-owned enterprises; knowledge
sharing from CEOs about large M&A projects. The M&A
Forum provides important information of M&A activities
and offers an outstanding opportunity for enterprises to
share experience, and invites strategic investments and
cooperation. A satisfied participant remarked that “it is
a dating match for investment funds and Vietnamese
enterprises”.
PHU MY UREA RECEIVES CERTIFICATE OF
"BEST AGRICULTURAL PRODUCT OF 2013"
O
n 17 May 2014, Phu My Urea of PVFCCo received the
title of “Best agricultural product of 2013” offered by
Vietnam Farmers Association. This title represented the
trust of Vietnam Farmer Association and farmers toward
Phu My Urea. This is also deemed an engine for PVFCCo
to develop and improve Phu My fertilizers to serve the
farmers better.
36
INVESTORS BULLETIN - QUARTER 3/2014
PVFCCo IN “TOP 50 MOST EFFECTIVE
COMPANIES IN VIETNAM 2014”
n 17 June 2014, PVFCCo is honored as one
of the “Top 50 most effective enterprises in
Vietnam 2014” by Nhip Cau Dau Tu (Investment
Bridge) magazine. This is the 3rd consecutive year
that PVFCCo receives this title, thereby affirming
its hard earned position. The title is decided by
the Organizing Board after evaluating many
enterprises for its outstanding achievement in
business performance, as evidenced by four key
indicators including revenue, profit, return on
equity (ROE) and return on capital (ROC). The
above 4 indicators are averaged for 3 years
2011 - 2013.
PVFCCo CONTINUES TO BE IN
TOP 10 ANNUAL REPORTS 2014
Y
et again PVFCCo is recognized as an enterprise
to publish the Top 10 Annual Report 2014. After
its HoSE listing in the last 7 years, PVFCCo has been
awarded the Best Annual Report for six consecutive
years and recognized among Top 10 Annual Reports
for four consecutive years (2011-2014). This is the sixth
year that Vietnam Annual Report Awards (ARA) is held to
honor listed enterprises who have complied diligently
to the Information and Announcement Regulations in
their annual reporting.
EPC CONTRACT SIGNED
FOR PROJECT UFC 85/
FORMALDEHYDE
P
VFCCo and Toyo Vietnam Limited Company
(TVC) signed an EPC contract to build the UFC85/
Formaldehyde Unit with a total contract value of VND
400 billion. The Unit is built in the premises of Phu My
Fertilizer Plant with design and construction period of
19 months and the designed capacity of 15 thousand
tons UFC85 per year or 25 thousand tons Formalin per
year. With a forecast price of USD 800 per ton UFC85
and USD 500 per ton Formalin, it is expected that this
Unit will produce and supply domestic market with
7,000 tons UFC85 and 13,000 tons Formalin per year
after it is put into operation, significantly contributing
to the revenue and profit of PVFCCo in the near future.
www.dpm.vn
37
NEWS
PVFCCo
EVENT HIGHLIGHTS
SUPPORTS SEA AND ISLAND PROTECTION
INAUGURATING
THE CONFERENCE HALL
AND CULTURE GALLERY
A
t the beginning of May 2014, as
China illegally put their oil drilling
rig HD-981 in the Exclusive Economic
Zone in continental shelf of Vietnam,
PVFCCo is one of the leading companies
in promoting the programs to support
the navy force, sea police and Vietnam
fisheries resources surveillance force:
O
n 16 July 2014, PVFCCo organized the
inauguration of Project to build the
Conference Hall, Library, Meeting Room
and Cultural Gallery at Phu My Fertilizer
Plant. The project started on 1st August
2013 with total investment of VND 54
billion. The project was won by tender
and operated by PVC Mekong under the
planned schedule and quality with total
floor area of 2,715 m2. It included the
facilities such as backstage, storehouse,
library, meeting room, cultural room with
advanced equipment. The completed
project will provide facilities for organizing
major events, meeting the demand
for research and reading, and preserve
information for and about Dam Phu My.
VND 33 billion. Besides, since June 2014,
all the packages of Phu My fertilizers
will be printed with propaganda of
contributing to protect sea and islands,
as a result to spread the spirit of
patriotism to customers and society. This
is considered a strong propaganda with
wide effects.
»» PVFCCo transferred 2 high speed
patrol boat HP47 valued at VND 12
billion to sea police and Truong Sa
CQ-01 boat valued at VND 3.5 billion
to Vietnam Navy.
»» PVFCCo granted VND 300 million
contributed by employees to support
sea police and Vietnam fisheries
resources surveillance force.
In recent years, total value of programs
supported by PVFCCo is estimated as
Ceremony of inauguration band cutting
The surface of the Conference Hall and Culture Galary
38
INVESTORS BULLETIN - QUARTER 3/2014
Mr. Le Cu Tan – Chairman of PVFCCo delivers high-speed patrol boat to Commander Dinh Gia That, Political
Commissioner of Naval High Command.
www.dpm.vn
39
NEWS
NEWSFLASH FOR SHAREHOLDERS
PVFCCo SOLD
2.6 MILLION PVC SHARES
WITHDRAWS
2,600,000
share of PVC
I
n July 2014, PetroVietnam Fertilizer and
Chemicals Corporation (PVFCCo) sold
2,600,000 shares of Drilling Mud Joint Stock
Corporation (stock code: PVC). After that
transaction, the DPM still holds 2,533,202 PVC
shares.
Capital held by DPM at PVC
2,533,202
DPM'S AGM 2014:
INPUT GAS PRICE TOP CONCERN
shares
O
n 15 April 2014, the Annual General Shareholders Meeting
(AGM) was conducted successfully. The shareholders who
represented 81% of total voting shares attended the AGM
and expressed their interest and continuous support for the
corporation. The shareholders agreed unanimously to the
reports and submissions from Board of Directors (BOD). The
focus of the concerns was on business performance in 2014
and the growth rate, production expansion, gas supply and
gas price for producing fertilizers, for the subsequent years.
The Board shared with shareholders the difficult situation of
the corporation in the medium term. The plans and projects in
the growth strategy were also revealed. The BOD has expressed
their appreciation of recommendations contributed by the
shareholders.
PAY
DIVIDEND
950 bil. VND
completed the distribution
of dividend at VND 2,500
per share to the account of
Vietnam Stock Registry on 13
June 2014
DPM NEW MAJOR SHAREHOLDERS
O
n 25 June 2014, Market Vectors bought 3,652,440 shares of
DPM, increasing the share ownership of DPM from 16,788,220
shares to 24,440,660 shares (or from 4.42% to 5.38%) and became
one of the big shareholders of the Corporation.
In early June 2014, Deutsche Bank AG London became a big
shareholder of DPM after they bought 358,060 shares of DPM,
increasing their ownership to 19,039,400 shares, equivalent to
5.01% of total equity.
VND 950 BILLION DIVIDEND
DISTRIBUTED IN 2013
PVFCCo RUNS FIRST
PETROCHEMICALS WORKSHOP
T
S
he Resolution of AGM on 15 April 2014 called to provide the
List of Shareholders on 6 May 2014. Based on the shareholder
list provided by Vietnam Stock Registry and determined on
23 May 2014, the Corporation completed the distribution of
dividend at VND 2,500 per share to the account of Vietnam
Stock Registry on 13 June 2014 to pay dividend for registered
shareholders. As for shareholders who have not registered their
shares yet, the Corporation paid the dividend at the Head Office,
43 Mac Dinh Chi Street, Hochiminh City since 13 June 2014.
GAS PRICE SOLD TO DPM LINKED
WITH FO PRICE IN SINGAPORE MARKET
F
ollowing the Decision of Prime Minister, from 1 April 2014, the price of
natural gas sold to DPM (natural gas is the key material of DPM Fertilizer
Plant) will be calculated based on a new formula. Accordingly, the price of gas
at the well mouth will be added to gas transportation cost to the gates of DPM
Plant. The price of gas at well mouth will be similar to 46% of average price of
FO at Singapore market. The Corporation has negotiated with PetroVietnam
Gas Corporation to agree on the transportation and distribution cost of 0.63
USD/MMBTU. This is the lowest possible cost, as a result it has maintained the
price which is lower than the forecast.
40
INVESTORS BULLETIN - QUARTER 3/2014
12.5%
+
THE GAS PRICE INCREASE
ABOUT 7.5USD/MMBTU,
EQUIVALENT TO COST INCREASED 8.4%
ince the start of 2014, the petrochemical factory of PVFCCo in Ba Ria –
Vung Tau Province with a capacity of 25,000 barrels per year was put
into operation. Until now, the workshop has provided customers with more
than 5,000 barrels of specialized petrochemicals, giving a revenue of VND
60 billion. This factory produces chemicals and chemical ingredients for oil
and gas exploration and for oil refinery plants, was invested and built by the
cooperation agreement of PVFCCo and Baker Hughes Petrolite.
PVFCCo DEPLOYS THE JUMBO PACKAGING
SYSTEM AT DAM PHU MY FACTORY
F
rom the 3Q2014, PetroVietnam
Fertilizer and Chemicals Corporation
(PVFCCo) will deploy the Jumbo
Packaging System (JBS) at Dam Phu My
(DPM) Factory that packs bags of 500 1,000 kg for export.
The JBS incurred an investment of nearly
VND 8 billion and the installation was
started from mid-March 2014. The JBS is
integrated with the existing packaging
system without any interruption. The
system now has the capacity to pack 20
one-ton bags per hour, running 24/24
for a maximum of 300 days per year. This
system will offer a range of sizes for Urea
packs. The packaging capacity is 1,000
kg per bags in addition to the existing
packages of 25 kg or 50 kg per bag.
“Investment and operation of Jumbo
Packaging System is aimed at increasing
the range of package size for the export
market. Given the abundant supply of
domestic Urea, the multi-sized packaging
will help PVFCCo meet the requirements
of domestic customers, international
clients, since it is now able to regulate the
flexible product supply”, said Mr. Cao Hoai
Duong – General Director of PVFCCo.
It is known that Asian countries such
as Japan, Korea, Taiwan, Thailand and
Malaysia… imports Jumbo pack size of
fertilizer Urea. These happen to be key
markets of PVFCCo.
www.dpm.vn
41
THE FERTILIZER MARKET OF 1HY2014
GLOBAL UREA MARKET: GLUT
AND
The Urea price at major markets
FALLING PRICE
in Nola
in Yuzhnyy
in Black Sea
in Middle East
USD/TON
USD/TON FOB
USD/TON FOB
USD/TON FOB
GRANULAR UREA
PRILLED UREA
PRILLED UREA
GRANULAR UREA
425
370
307
Jan 2014
S
imilar to 2013, the global
fertilizer market in 2014
showed the following trend:
its demand increased in the
first 1 - 2 months and decreased in the
following months.
The global fertilizer market entered the
January 2014 with the strong demand
coming from US. The price of granular
Urea traded in Nola reached 425USD
per ton while prilled Urea in Yuzhnyy
reached 370USD per ton FOB. The
high export price in Black Sea region
triggered some factories in Ukraine to
restart Urea production.
310
Jul 2014
However, after US orders are fulfilled,
the export market weakened starting
in July. Export price at Black Sea slid to
307 USD per ton FOB at month-end,
while granular Urea price in Middle
East dropped to 310 USD per ton FOB.
The market continued to witness the
adverse fluctuations. Despite the
demand moved across from US to
West Europe, South America and India,
the Urea price did not recover. By end
April the FOB price in Yuzhnyy hit the
lowest of 295USD per ton and hovered
around USD 300 per ton during
that period till now. Maintaining an
adequate supply together with high
demand from Turkey and Europe in
May and June will help Yuzhnyy keep
the price. The surplus supply from
China was a factor for the price slide
in almost all markets. Chinese Urea,
both granular and prilled, remained
2 - 5 USD per ton lower than Middle
East supply. The latter was forced
to reduce the price to compete for
contracts in the key market in South
America and India. By June, the price
of Chinese Urea delivered in July
(when the export tax will be reduced)
will slide further to 245 - 255USD per
ton FOB – the lowest price during in
past four years.
The global Urea price from 2012 to 1HY2014
545
Yuzhnyy FOB
Middle East FOB
China FOB
495
445
395
345
295
245
01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06
Source: Fertecon
42
INVESTORS BULLETIN - QUARTER 3/2014
www.dpm.vn
43
THE FERTILIZER MARKET OF 1HY2014
DOMESTIC UREA MARKET:
EXCESS SUPPLY
UREA OF NATIONAL TOTAL
1,133.7
thousand tons
I
n 2014, the import tax of Urea and DAP fertilizers applied in
Vietnam is fixed at 3% (in 2013, it was 0%). According to the
Ministry of Industry and Trade, for the first 6 months 2014,
the production of Urea is estimated to reach 1,133.7 thousand tons,
or 8.6% higher than 2013. The production of NPK fertilizer was
1,244.7 thousand tons, increased by 1.7% from the previous year.
The Vietnam National Chemical Group produced 818.5 thousand
tons of phosphate fertilizer, increased by 0.3%. The import of
fertilizers in the first 6 months of 2014, decreased by 13.2% in
terms of quantity and decreased by 32.7% in terms of value.
industrial trees in Southeastern and
Highlands region (despite not having
a significant market demand). The
other reason is the impact of restricting
the transportation load which in turn
increases market demand. Moreover,
domestic Urea producers such as Ca
Mau, Ninh Binh have started to export,
and this helped to life sales pressure
and domestic inventory. In the end
it drove down domestic Urea price
towards a satisfactory level.
The 1Q2014, saw Phu My Urea lost
14.03% to 8,036 VND per kilo. Urea from
China went south 14.07% to 7,760 VND
per kilo. Urea Ca Mau lost 15.08% to
7,837 VND per kilo. It should be noted
that compared to 4Q2013, Chinese
Urea and Ca Mau Urea increased 3.81%
and 2.4% respectively while Phu My
Urea decreased by 2.82%.
In the 2Q2014, the domestic Urea
market saw a positive turn with a
slight increase. This is partly due to
higher demand for summer–autumn
season at Mekong Delta region,
an abundant supply. The Urea price has
increased continuously since 4Q2013
right through to first 2 months of
2014. The price stabilized in March and
may fall further because the Mekong
provinces have completed fertilization
for three rice crops of the winter-spring
season and have started harvesting
in some provinces. The demand for
fertilizers is expected to fall in 1Q2014.
In addition, the drought has impacted
the demand for cultivating industrial
trees in the Highlands region. By
April 2014, the demand for fertilizer
has recovered somewhat because
The transaction activity in Urea market
has slowed due to a low demand and
Urea price in Vietnam fertilizers market 2013 - 2014
Phu My (PVFCCo average price)
Phu My (Market price of Southeast)
Dong/kg
10,500
China (Market price of the Southeast)
Ha Bac (Market price of Northern)
Ca Mau (Market price of Southwest)
Ninh Binh (Market price of Highlands North Central)
10,000
9,500
9,000
8,500
8,000
7,500
7,000
6,500
INVESTORS BULLETIN - QUARTER 3/2014
ay
M
Ap
r
ar
M
Fe
b
n
c
14
-Ja
20
De
No
v
Oc
t
p
Se
Au
g
l
Ju
n
Ju
ay
M
r
Ap
ar
Fe
b
M
20
13
-Ja
n
6,000
44
transaction because of irregular rainfall,
low agricultural prices and high inventory.
The demand from Central region is more
than satisfactory. The near-term forecast
expects demand to be buoyed by
summer–autumn rice season in Northern
region, and the autumn-winter season in
Mekong Delta, as well as industrial trees
in Southeastern and Highlands regions.
There is definitely adequate supply from
production, import and inventory. The
domestic market is expected to remain
stable in the coming months.
some provinces started sowing for
summer-autumn rice season, as well
as an improved demand for fertilizing
industrial trees in Highlands region.
In the last half of April, there was a
price adjustment in some places partly
due to strict control of truck load on
highways.
Demand for fertilizer is strengthened by
two major factors. Firstly, the summer–
autumn rice season in Mekong Delta and
Central region. Secondly, the fertilizing
time for industrial trees in Southeastern
and Highlands regions. The reasons for
demand fluctuations in regional markets
vary. The Mekong Delta saw a decline in
It is forecasted that fertilizer supply will
be in abundance and the Urea price will
be stable. The global Urea market will be
flooded with Chinese products. From 1
July 2014, China will apply a low export
tax for Urea products. Meanwhile,
domestic Urea production will escalate.
Apart from the current production of 2
million tons, the Project of Expanding
Ha Bac Factory is planned to complete
at end 2014, and this will add another
500,000 tons of Urea. Then, the local
Urea production will have an oversupply of 30%.
In 2Q2014, the domestic demand
for fertilizers is lower than the first
quarter. Nevertheless, the demand is
strengthened by the summer-autumn
rice season in Mekong Delta and
industrial trees in Southeastern and
Highlands regions at the start of the
rainy season. The fertilizer supply comes
from production, import and inventory.
However, road transportation is facing
with difficulties due to the strict truck
load control applied nationwide since 01
April 2014, that has resulted in smaller
quantities and higher transportation cost.
On some routes the cost has doubled or
tripled compared to pre-regulation. In
addition, the gasoline price in April and
input gas price in May increased and
definitely have raised production cost.
The sub-distributors are afraid of price
increase, as a result, they purchased to
stock up their inventory. At the same
time, the main distributors have limited
their sales. The Urea supply in the local
market in 2nd quarter decreased because
Ninh Binh Plant stopped operation for
maintenance.
Source: PVFCCo
www.dpm.vn
45
THE FERTILIZER MARKET OF 1HY2014
Urea demand by season by region
VINACHEM: PROPOSES TO INCREASE IMPORT TAX OF FERTILIZERS
Tuoitre News, 30 July 2014: Vinachem
proposes to increase the fertilizer
import tax for Urea from 0-5% (of
varying type) to a standard of 7%,
for NPK from 0-6% to 8%, DAP from
0-5% to 8%. At the suggestion of
Vinachem, the Ministry of Finance
is now collecting comments and
opinions from relevant ministries
before adjusting the tax system. Urea
import tax has increased from 0% to
3% from this year to stimulate the
domestic production. The domestic
Urea fertilizers has already met the
demand, such that the Ministry of
Finance plans to increase the import
tax from 3% to 6%, which is, equal
to the cap tax level committed to
World Trade Organization (WTO).
On NPK fertilizer, the suggestion
is to increase import tax to 8%.
This does not comply with WTO
commitments. As for DAP fertilizer,
the tax will increase from 0% to 3%
from early January so as to stimulate
production.
WINTER
–
SPRING
970,000 tons
Northern :
Central
2.2
Million tons
900
FERTILIZER
DEMAND IN
VIETNAM
UREA
Thousand tons
SA
900
960
Thousand tons
DAP
4
Million tons
1.8
NPK
Photsphate
Fertilizer
Fertilizer demand
in 2014 nearly
11
Domestic
production met
80%
AUTUMN
–
WINTER
500,000 tons
290,000 tons
120,000 tons
560,000 tons
Northern :
Central
:
Southern
:
30,000 tons
100,000 tons
370,000 tons
530,000 tons
Northern :
Central
:
Southern : 180,000 tons
80,000 tons
270,000 tons
Urea demand by region
NORTHERN REGION
CENTRAL AND HIGHLANDS
SOUTHERN REGION
thousand tons
thousand tons
million tons
600
Million tons
Potassium
:
Southern : Thousand tons
SUMMER
–
AUTUMN
1
400
Market share of Phu My fertilizer
of demand
Million tons
25%
30%
70%
75%
Northern
60%
Central and Highlands
25%
40%
35%
75%
South Eastern
65%
South Western
Phu My fertilizer
Other
IN VIETNAM
Source: Ministry of Agriculture and Rural Development.
46
INVESTORS BULLETIN - QUARTER 3/2014
www.dpm.vn
47
BUSINESS PERFORMANCE OF 1HY2014
9,000
8,700
8,000
FINANCIAL
HIGHLIGHTS
7,000
6,000
5,000
5,133
4,771
4,000
3,000
1,384
2,000
759
1,000
NO.
A
B
A
AMOUNT INDICATORS
I
MANUFACTURING OUTPUT
1
2
UNIT
C
Phu My Urea
Packaging
II
IMPORT
III
TRADING OUTPUT
Ton
Thousand bag
2014
2014
(Plan)
1HY2014
(Plan)
1HY2014
(Act.)
Compare
with
1HY2014
(Plan)
1
2
3
4=3/2
800,000
396,697
427,600
108%
Compare
with
2014
(Plan)
5=3/1
53%
46,000
22,750
25,050
110%
54%
Ton
227,000
128,200
94,989
74%
42%
Phu My Urea
Ton
800,000
447,000
461,281
103%
58%
2
Traded Fertilizer
Ton
330,000
179,700
199,555
111%
60%
3
Chemicals
Ton
4,200
2,150
1,893
88%
45%
4
Packaging
Thousand bag
46,000
22,600
25,050
111%
54%
AVERAGE SELLING PRICE
1
Phu My Urea
VND Mil./ton
7,584
7,584
7,487
99%
99%
2
Traded Fertilizer
VND Mil./ton
6,595
6,411
6,694
104%
102%
4
Packaging
VND/bag
5,567
5,110
4,180
82%
75%
B
FINANCIAL INDICATORS
I
CONSOLIDATED
672
Total assets
VND Bil.
11,474
10,351
-
90%
2
Equity
VND Bil.
7,300
8,995
-
123%
3
Total revenue
VND Bil.
8,700
4,771
5,133
108%
59%
3.1
Phu My Urea
VND Bil.
6,067
3,390
3,454
102%
57%
3.2
Traded Fertilizer
VND Bil.
2,177
1,152
1,336
116%
61%
3.3
Packaging
VND Bil.
130
64
66
103%
51%
3.4
Chemicals
VND Bil.
119
61
74
121%
62%
3.5
Financial and other activities
VND Bil.
207
104
203
195%
98%
4
Tax payments
VND Bil.
362
192
137.5
72%
38%
5
Profit
5.1
Profit before tax
VND Bil.
1,384
759
756
99.6%
54.6%
5.2
Consolidated profit after tax
VND Bil.
1,219
668
672
100.6%
55.1%
PLAN 2014
1HY2014 (PLAN)
1HY2014 (ACT.)
TOTAL REVENUE
PROFIT BEFORE TAX
CONSOLIDATED PROFIT AFTER TAX
(VND Billion)
(VND Billion)
(VND Billion)
TOTAL REVENUE
PLAN 2014
8,700
VND
BIL.
59 %
PLAN 2014
1HY 2014
5,133
VND
BIL.
REACHED 59% OF THE PLAN 2014
MANUFACTURING OUTPUT
PLAN 2014
800
,000
TONS
53
%
PLAN 2014
427
1HY 2014
,600
TONS
REACHED 53% OF THE PLAN 2014
TRADING OUTPUT
PLAN 2014
1
INVESTORS BULLETIN - QUARTER 3/2014
668
756
0
% ACTUAL
1
IV
48
ITEMS
1,219
330
,000
TONS
60%
PLAN 2014
199
,555
PLAN 2014
4
TONS
TONS
REACHED 60% OF THE PLAN 2014
CHEMICALS
,200
1HY 2014
45
%
PLAN 2014
1
1HY 2014
,893
TONS
REACHED 45% OF THE PLAN 2014
www.dpm.vn
49
BUSINESS PERFORMANCE OF 1HY2014
FINANCIAL
12,000
STATEMENTS
11,362
(Unit: VND Billion)
10,351
8,995
5,911
TOTAL RESOURCES
6,000
3,799
4,000
1,481
2,000
1HY2014
1HY2013
Return on Assets (ROA)
6.29%
14.02%
Return on Equity (ROE)
7.23%
16.47%
5,133
VND
BIL.
TOTAL REVENUE
equals to 59% of the annual plan,
decreases 19% yoy.
VND
BILLION
8,000
Profitability
ITEMS
10,351
9,670
10,000
651
VND
BIL.
PROFIT AFTER TAX
ATTRIBUTABLE TO PARENT
SHAREHOLDERS
1,142
:1HY2013
:1HY2014
0
TOTAL ASSETS
CASH AND CASH
EQUIVALENT
EQUITY
TOTAL LIABILITIES
ITEMS
1HY2014
1HY2013
Current ratio = Working capital/Short-term liabilities
6.56
5.55
Quick ratio = (Working capital – Inventory)/Short-term liabilities
5.28
4.64
reach 53.4% of annual plan 2014 and
41% of actual performance yoy.
59 %
7,000
6,336
6,000
PLAN 2014
5,133
5,000
53.4 %
PLAN 2014
ITEMS
1HY2014
1HY2013
ASSETS
VND
VND
3,798,920,425,185
5,910,904,501,503
1,473,053,298,732
336,669,130,366
375,837,199,879
371,571,560,982
1,412,069,401,164
1,316,853,871,054
Working capital
7,258,710,660,425
8,041,930,901,743
Long-term assets (*)
3,092,077,336,872
3,320,367,088,493
10,350,787,997,297
11,362,297,990,236
1,106,928,277,030
1,449,815,056,689
- Account Payable (*)
509,382,232,931
393,108,749,416
- Deferred revenue (*)
47,904,035,569
9,179,169,209
Long-term liabilities (*)
35,369,203,530
30,982,525,807
Total Liabilities
1,142,297,480,560
1,480,797,582,496
Equity
8,995,478,561,243
9,670,116,275,657
Minority Interests
213,011,955,494
211,384,132,083
TOTAL RESOURCES
10,350,787,997,297
11,362,297,990,236
Cash and cash equivalent
Short-term financial investment (*)
4,000
3,000
2,000
1,593
1,000
651
0
TOTAL REVENUE
(VND BILLION)
:1HY2013
PROFIT AFTER TAX
ATTRIBUTABLE
TO PARENT
SHAREHOLDERS
(VND BILLION)
:1HY2014
Total revenue for the first half year
in 2014 is expected to be VND 5,133
billion, equals to 59% of the Annual
Plan (5,133 on 8,700 VND billions).
However this is a 19% reduction
from previous year (5,133 on 6,336
VND billion). The reasons for the fall
include:
»» Total demand of fertilizer has
decreased in 2014 because of stiff
competition and sudden climatic
changes. It achieved only 97% of
actual demand year-on-year. Also the
legal requirement to test the truck
load affected the demand for rental of
trucks to transport fertilizer.
»» The average selling price of Phu My
Urea in first half year of 2014 stood
at VND 7,486,954 per ton, falling
by 16% from the previous year
(7,486,954/8,899,095 VND per ton).
50
INVESTORS BULLETIN - QUARTER 3/2014
Profit after tax in the first half year
2014 is VND 651 billion, equivalent
to 53.4% of Annual Plan and 41%
of actual performance year on year
(651/1,593 billion VND). The reasons
fall the reduced profit from previous
year include:
»» In addition to the falling production
output and revenue, the input price of
gas has increased by 2% (comparing
USD 6.69/MMBTU as at 1Q2014 to USD
6.56/MMBTU). From 2Q2014, gas price
has increased by 12.5% to USD 7.5/
MMBTU.
»» The average selling price of key
product from Phu My Urea decreased
by 16% from the year earlier, thereby
reducing profit.
»» Revenue from financial activities
decreased by 36% (146/228 billion
VND) due to low interest rates.
Account Receivable (*)
Inventory (*)
TOTAL ASSETS
RESOURCES
Short-term liabilities
(*): Data updated to July 2014
www.dpm.vn
51
STOCK MARKET
DPM STOCK
BENCHMARKS NEW LEVEL
VIETNAM STOCK MARKET
SHOWS IMPRESSIVE GROWTH
The Vietnam stock market
saw significant fluctuations
in 1HY2014. The first
quarter saw returns from
stocks and shares being
more
attractive
than
alternative investments. At
that time, the stock market
was supported by positive
news on performance of
enterprises and upbeat
economic
forecast
buoyed by government
policies. FDI was also welldisbursed. In response, the
stock indices of HCM and
HN exchanges looking
northwards.
A
t end of 1Q2014, HNX index
grew 32% and VN Index grew
17%, listing Vietnam as the
stock market with best index
increases in the region. Liquidity of the
stock market was significantly improved
with an average transaction volume
at HSX of VND 2,333 billion and HNX
of VND 833 billion per trading session,
respectively equivalent to 121% and
60% from previous year.
Entering 2Q2014, the market received
little positive news. The investors were
in a profit-taking mood that a decline
in stock indices in both exchanges
from April 2014. The market had to
deal with bad news of China setting
up an oil rig HD981 in Vietnam sea
territory. The investors panicked and
Che Thi Mai Trang
Analyst
Bao Viet Securities Joint Stock Company
2,333
VND BIL./
TRADING
SESSION
AVERAGE TRANSACTION VOLUME
sold down their shareholdings by the
first half of May. The HNX Index and
VN Index witnessed a record slump of
6.92% and 5.69% respectively on 8 May
2014. Compare to the panic attacks
suffered by domestic shareholders, the
foreign shareholders chalked up their
holdings at attractive prices. The net
buying of foreign investors reached
VND 2,086 billion in May, representing
a significant increase from VND
1,571 billion in April and achieved an
average VND 290 billion in the first 3
months. The continuous net buy of
foreign investors have improved the
sentiments of domestic investors, and
stopped the decline and led market
recovery in June.
In the last six months, changes in
policy of foreign ownership as well
as challenges and opportunities
presented in the signing of bilateral
and multilateral trade agreements
(such as TPP, ASEAN+6, Vietnam &
Korea, Vietnam & EU…) will remarkably
impact Vietnam stock exchanges.
The low interest rate regulation in
the banking sector has pushed many
investors to the stock market. As at
30 June 2014, the HNX Index and
VN Index with the P/E ratios of 13.6
and 15.5 respectively are considered
AT HSX AND HNX OF VND 833 BILLION PER
TRADING SESSION, RESPECTIVELY EQUIVALENT
TO 121% AND 60% FROM PREVIOUS YEAR.
1Q2014
HNX Index
VN Index
+32% +17%
LISTING VIETNAM AS THE STOCK MARKET
WITH BEST
INDEX INCREASES IN THE REGION.
MAY 2014
2,086
VND
BIL.
THE NET BUYING OF FOREIGN
INVESTORS
REPRESENTING A SIGNIFICANT INCREASE
FROM VND 1,571 BILLION IN APRIL AND
ACHIEVED AN AVERAGE VND 290 BILLION IN
THE FIRST 3 MONTHS.
more attractive in the region. This
will facilitate the inflow of foreign
investment.
Note: The article may not reflect the opinions and assumptions of PVFCCo.
52
INVESTORS BULLETIN - QUARTER 3/2014
Che Thi Mai Trang
Analyst
Bao Viet Securities Joint Stock Company
DPM is a leading company in the fertilizer industry. It makes up 40% of Urea market nationwide
with capacity of 800,000 tons of Urea per year. In addition, DPM imports and distributes the
fertilizers that domestic producers fail to supply such as potassium, SA, high quality NPK… with
an annual volume of nearly 300,000 tons.
Being a leading enterprise in this
industry with wide distribution
network and long-history brand
name, DPM has maintained its
adequate profit with average ROA and
ROE for recent 5 years (2009 – 2013)
respectively 27% and 32%. However,
2014 is recognized as a tough year for
DPM as the output price slumps while
input price jumps.
FALLING UREA PRICE: Phu My Urea
price in the first 6 months of 2014
hovered around 7,700 – 8,200 VND
per kilo (including VAT), represented
a slump from previous year (9,000 –
10,050 VND per kilo).
There are two key reasons that have
suppressed Urea price:
»» Abundant supply of domestic
Urea: According to data provided
by Ministry of Industry and Trade,
Urea production nationwide in the
first 5 months has reached 938,900
tons, up 10.3% from previous year.
The domestic factories produced
adequate supply to meet domestic
demand, such that the importation
of Urea declined 72% from a year
earlier equivalent to 27,000 tons in
the first 5 months.
»» Falling Global Urea price: The
global Urea price in 1HY2014
decreased by 10-14% compared
to the average price yoy. China
has set to promote its Urea export
as the nation has a supply glut.
The capacity of China is around
71 million tons, but domestic
demand stands at 51 million
tons per year. In addition, most
of Chinese Urea factories use the
anthracite instead of natural gas
in their production process. The
anthracite price fell continuously
since 2012 accounting for the fall
in production cost. Given the lower
cost of production, Chinese Urea
factories boosted their exports and
improved their profit margins. In
addition, the Chinese Government
has stimulated their exports by
reducing export tax. The export tax
difference between the low season
and peak season in China in 2014
stood at 15% instead of 75% as in
2013.
FOR RECENT 5 YEARS
(2009 - 2013)
ROA
27
(AVERAGE)
ROE
32
(AVERAGE)
%
UREA PRICE
(1HY2014)
7,700-8,200
VND
/KG
%
REPRESENTED A
SLUMP FROM
PREVIOUS YEAR
(9,000 - 10,050 VNĐ/KG).
FALLING
PRICE
KEY REASONS: ABUNDANT SUPPLY OF DOMESTIC UREA AND FALLING GLOBAL UREA PRICE
Global Urea price (USD/TON)
: Granular Urea in Middle East.
650
: Prilled Urea in Yuzhnyy.
550
450
350
250
1 Sep. 2012
6 Sep. 2012
11 Sep. 2012
4 Sep. 2013
9 Sep. 2013
2 Sep. 2014
Anthracite price (USD/TON)
180
160
140
120
100
1 Oct. 2012
6 Oct. 2012
11 Oct. 2012
4 Oct. 2013
9 Oct. 2013
2 Oct. 2014
www.dpm.vn
53
STOCK MARKET
DPM INPUT GAS PRICE: Based on
previous contracts, the input gas price
of DPM has increased marginally at
2% from a year earlier or USD 6.69/
mmBTU. However the signing of new
contracts indicated that the gas price
from 1 April 2014 to 31 December 2014
is calculated based on the conversion
formula of global gas price:
THE LONG-TERM OUTLOOK FOR DPM WILL DEPEND ON THE NEW PROJECTS
Based on the DCF model, the
transaction price of DPM now
adequately represents the long-term
future, excluding future cash flows
P = Pn + Tp = 46% * MFO + 0,63 (USD/mmBTU)
400
Where:
»» P is gas price, excluding VAT and calculated by USD/mmBTU.
»» Pn=46%*MFO is the gas price converted similar to 46% of average monthly FO price at Singapore
market, accordingly to Platt’s magazine, in USD/mmBTU.
»» Tp is the transportation and distribution cost, equivalent to 0.63USD/mmBTU.
Despite declining Urea price and
increasing input gas price, DPM is able to
meet its 2014 targets
Accordingly, the gas input price for
DPM in the 2Q2014 is about 7.5USD/
mmBTU, an increase of 12.5% from
previous contracts. The gas price
increase will expose the significant
disadvantage of DPM as it makes up
70% of production cost of DPM. Given
DPM target output in 2014 of 800,000
tons, and increasing gas price, the DPM
profit is likely to fall by VND 230 billion,
equivalent to 8.4% of profit in 2013.
Urea price may recover in 4Q. From
1 July to 31 October 2014, it is likely
that China will reduce its export tax
of Urea from (15%+40 Renminbi in
1HY2014) to 40 Renminbi per ton
because it is entering a lull farming
period. When China cuts its tax, it
will stimulate its exports and will add
pressure on the Urea global price in
3Q2014. However, it is expected that
the export tax will rebound to normal
level in 4Q2014, which means the
international Urea price may recover
too. It is noteworthy that the support
factors of the global price will come
from Ukraine. The gas supply will
be reduced drastically due to the
political conflict between Ukraine and
Russia. Ukraine is one of the largest
Urea exporters in the world. It makes
up 6% of total global commercial
output with export volume in 2013
54
INVESTORS BULLETIN - QUARTER 3/2014
INPUT GAS PRICE
12.5
+
of 2.65 million tons. The price pull
upwards due to the declining output
from Ukraine cannot compensate for
the price push downwards from the
increasing supply of China. However
given the export tax increase in
4Q2014, the export volume of China
will be curtailed. Combining with
the production constraint in Ukraine,
there could be a Urea price recovery.
There is a chance that the price of Phu
My Urea in the 2HY2014 will be the
same as 1HY20144, averaging 7,48
VND per kilo (excluding VAT) for the
whole of 2014.
%
870
,000
TONS
UP BY 4% COMPARED TO 2013 AND
EXCEEDING 9% THE ANNUAL PLAN.
COST INCREASED
8.4
+
%
8,700
TO COMPLETE BY END 2015.
UFC85/FORMALDEHYDE PROJECT: The planned investment
is estimated as VND 400 billion, with a capacity of 7,000 tons
UFC85 and 13,000 tons Formalin. The project is due to complete
by end 2015. UFC85/Formaldehyde is an additive that Vietnam
has depended on 100% import. It is used to produce nitrogenous
fertilizers. Upon completion, the production output will be in high
demand. About 4,000 tons of UFC85 will be for Phu My Fertilizer
Plant to reduce the input cost. The remaining 3000 tons will be
distributed to local fertilizer factories. DPM signed agreements
with Ninh Binh and Ca Mau Fertilizer companies to ensure selling
out all output.
VND
BIL.
NET REVENUE AND
PROFIT AFTER TAX
(PLAN 2014)
1,219
VND
BIL.
UFC85/FORMALDEHYDE
INVESTMENT IS ESTIMATED, WITH
A CAPACITY OF 7,000 TONS UFC85
AND 13,000 TONS FORMALIN,
THE PROJECT IS DUE
Sales in 2014 can be higher than
2013. At present, the total supply
of domestic production meets total
domestic demand and competition in
this industry is healthy. However, given
the prestigious and strong brand name
and good distribution network, DPM is
well-entrenched in the Vietnam market
and DPM revenues are not adversely
impacted. Total sales of Phu My Urea in
1HY2014 is 461,300 tons, decreased by
3% from previous year of 476.271 tons.
Total demand may increase in 2HY2014
from previous year.
GENERALLY IN 2014, DPM
SHOULD BE ABLE TO DELIVER
of new projects. In the short-term,
the expected P/E of DPM stands at
8.45. This is lower than similar-scale
fertilizer enterprises in the region.
VND
BIL.
In the long-term, DPM potential is
in projects-in-progress that aim at
product diversification and strengthen
competitive advantage.
5,000
VND
BIL.
NH3 & NPK PROJECT HAS INVESTED,
TO INCREASE CAPACITY OF NH3 FACTORY
FROM THE CURRENT CAPACITY OF 450,000
TONS TO 540,000 TONS AND ALSO TO
PRODUCE 250,000 TONS OF NPK.
THE NH3 FACTORY CAN COMPLETE THE
EXPANSION BY END 2017 AND NPK
FACTORY IN 2018.
PROJECT OF NH3 & NPK: This project has invested VND 5,000
billion to increase capacity of NH3 factory from the current
capacity of 450,000 tons to 540,000 tons and also to produce
250,000 tons of NPK. The NH3 factory can complete the
expansion by end 2017 and NPK factory in 2018. At present,
about 100,000 tons of NH3 are imported. When the factory
operates, the production output of NH3 is expected to be
fully distributed. Currently, the local NPK production meets
domestic demand. However, it is mainly the low quality NPK.
There is an importation of 300,000 – 500,000 tons of high
quality NPK to serve specialized market segments. Thus the
NPK of DPM is expected to meet the demand for high quality
NPK of the local market.
Product diversification, by increasing the production capacity
of NH3 and NPK, will help DPM to re-arrange the production
based on changing market demands. It should be noted that
NH3 can be used for producing Urea, and in turn Urea can be
used to produce NPK.
In near future, when competition increases that impacts
the output and profit of Phu My Urea, DPM shall consider
reducing Urea sales and increase NH3 and NPK sales, to
achieve its revenue and profit targets.
Note: The article may not reflect the opinions
and assumptions of PVFCCo.
www.dpm.vn
55
TECHNOLOGY
and PHU MY NPK PROJECT
The construction of NPK Chemical Factory is expected to complete by early 2018. It
has the capacity to produce 250 thousand tons per year. Investors Bulletin would
like to update readers on the new NPK production technology and NPK Phu My
project. In this way, readers will understand better the technology of manufacturing
a mixed-fertilizer product.
General information on NPK
products, product formula,
market scale and production
technology in Vietnam
factories are continuously investing in
technology improvements to gradually
replace traditional mixing process so as
to enhance product quality.
V
Apart from 3-granule NPK, some major
companies invest in NPK 1-granule
processing system (which is 30 - 40% of
capacity) with steaming or melting the
Urea solution. This production method
produces a high quality of NPK and
also is able to add trace elements (TE).
The formulas that are produced and
distributed by domestic producers are
NPK 25 - 25 - 5, 20 - 20 - 15, 16 - 16 - 8 +
13S, 20 - 20 - 15 + Agrotain, 16 - 8 - 16,
5 - 10 - 3…
In 2012, the total design capacity of NPK in
Vietnam reached 4.8 million tons per year,
but factories ran only 70% of capacity.
Although the domestic NPK output is
significant, yet it is produced by basic
3-granule mixing process, making up 60 70% of total capacity.
ietnam and Thailand are two
countries producing the most
quantity of NPK in South
East Asia. Currently, the capacity is
increasing and has met consumption
demand of domestic markets. The
5.89
6.00
5.03
3.77
4.00
3.93
4.10
4.20
4.30
4.41
4.52
5.47
4.63
3.00
2.00
1.00
0.00
Source: VPI, 2013
2013
2014
2015
01
Traditional mixing technology: All
the single fertilizers are quantified
in relation to mixed fertilizer then
followed by the mixing process. The
products often have between two and
four colors of straight fertilizer and
additives. The production process is
simple with low-level investment and
cost. The advantage is that we can
produce with flexible scale based on
market demand and product types. The
disadvantage is the quality is unstable
and varies, and difficult to preserve…
02
The technology of granulation
mixing (1 granule): the granulation
can be made by some methods: by
compressing, by tower or by roller
drums, using the centrifugal force,
gravity, compression and hot warter or
steam to mix single fertilizers. Products
often have the varying degrees of
size and difficult to preserve (easy to
block) or difficult to provide products
containing N higher than 16% or P2O5
higher than 10%. It is difficult to control
the granulation process.
03
The domestic demand for NPK to 2039 (Million ton/year)
5.00
The kinds of mechanical mixing
technology:
2016
2017
2018
2019
2020
2025
2030
2039
The most advanced NPK
production process in the
world is Chemical Technology.
The production process includes
the chemical interacting between
ingredients containing N, P such as
H3PO4, H 2SO4, NH 3, and potassium
fertilizer, and combines with physicomechanical process… Ammonia in
liquid state and acid will react in the
reaction pipe or neutralization tank to
convert into Ammonium Phosphate
and Ammonium Sulfate. This liquid
solution is then sprayed on solid and
fine material, and will coalesce into
larger particles in the granular drum.
From the granular drum, the product
will be taken to be dried, sorted and
inspected for quality control. After
passing through inspection, the
NPK
1-granule
NPK
3-granule
30-40%
60-70%
Total capacity
products are then cooled, wrapped
and packaged. The factory using
this technology can produce high
quality NPK products, however it
requires
significant
investments
and favourable input supply source.
NPK products produced by chemical
technology
have
well-rounded,
uniform, hard and insoluble grains
compared to other technologies.
Some products are produced by
chemical technology are: 15 - 15 15, 20 - 20 - 0, 20 - 20 - 15, 18 - 46 - 0
(DAP), 16 - 16 - 8 + 13S, 13 - 25 - 5 +
TE, 10 - 25 - 5 + TE, 13 - 24 - 12 + TE,
10 - 25 -20 + TE…
In Vietnam, there is no 1-granule NPK
factory with chemical technology.
This is deemed a major challenge for
Vietnam producers to meet domestic
demand, for import substitution, or
for export. In 2012, Vietnam imported
nearly 400,000 tons of high quality
NPK from Philippines, Russia, Norway,
and Belgium… and exported up to 273
thousand tons of all types, mainly to
Thailand and African countries.
Phu My NPK Product and Project
of Phu My NPK Factory:
Based on the demand forecast for NPK
(2013-2039), the domestic demand for
NPK is increasing to achieve more than
4.6 million tons by 2020 and about 5.9
million tons by 2039.
PVFCCo believes that a NPK factory
with chemical technology should be
built to meet the domestic demand
Total capacity
for high quality fertilizer. It can replace
the traditional technology. The import
substitution can happen, and the exports
can be expected to rise. This will be the
first NPK chemical technology in Vietnam.
This is a chance to enhance competitive
advantages of Phu My NPK and lead the
market. This is the main reason to justify
for chemical technology project.
While building the NPK Phu My
factory to meet demand for high
quality NPK fertilizer, currently DPM is
importing NPK products with chemical
technology such as 16 – 16 – 8 + 13S +
TE; 12 – 10 – 9 + TE; 15 – 15 – 15; 25 – 9
– 9; 12 – 10 – 9 + TE; 15 - 8 - 20 + 20S…
to prepare the market and also to let
farmers try it.
NPK Phu My factory will produce the
products under the brand of NPK Phu
My which has outstanding quality
under various formula mixes suited
to different land area and plants. The
NPK Phu My is a 1-granule and 1-color
product, yet contains three elements of
Nitrogenous, Potassium, Phosphorus
and other necessary trace elements
such as sulphur, magnesium, calcium,
silica, biotin and zinc in one granule.
These elements will be mixed and
divided with a balanced ratio to offer
maximum advantage to many kinds
of plants. TE substances will prevent
branches of plants from drying, leaves
turning yellow, falling flowers, falling
fruits from coffee trees, cashew trees,
pepper trees. It reduces the use of
pesticide, and improving productivity
and crop quality.
273
thousand tons NPK export
2012
400
thousand tons NPK import
2012
56
INVESTORS BULLETIN - QUARTER 3/2014
www.dpm.vn
57
INTERNATIONAL RELATIONS
PVFCCo BIGGER ROLE IN IFA
PLAYS A
PVFCCo HELD TRAINING
COURSES FOR AGRICULTURAL
SPECIALISTS AT IRRI
About IFA
I
n June 2014, PVFCCo conducted training at the
International Rice Research Institute (IRRI) in Philippines
and Indonesian Center for Food Crops Research and
Development (ICFORD) for the delegation consisting
of more than 60 agricultural specialists from provinces
nationwide. The mission was useful as the delegation
was updated with new information and knowledge in
agriculture by the experienced professors and doctors in
agriculture who have been working in IRRI, ICFORD and
Vietnam for years.
540
members
85
countries
in which half is from developing
countries. IFA members work mainly
in production, trade and distribution
of fertilizers and materials for
fertilizer production.
170
mil. tons/year
of fertilizer per year to
serve the international
food industry.
IFA MEMBERS IN EAST ASIA
INCLUDE: Japan, Korea, Mongolia
and the ASEAN 10. Regional Vice
Chairman of IFA will represent all
fertilizer traders and producers in the
region to advice, provide information,
contribute ideas to improve IFA’s
performance. He also represents IFA
to promote its pre-eminence and
operations in the region.
58
INVESTORS BULLETIN - QUARTER 3/2014
F
rom
26/05/2014
to
28/05/2014
in
Sydney,
Australia,
International
Fertilizer Association (IFA) held
its 82nd Annual Conference with more
than 1,100 participants from hundreds
of companies and organizations in
fertilizer industry worldwide. The
conference evaluated the fertilizer
industry in 2013. It also discussed and
proposed the evaluation, analysis
and forecast for the sector. PVFCCo
delegation was led by Mr. Cao Hoai
Duong who actively participated at the
Conference.
PVFCCo has attended the IFA
Conference for the last 10 years as
a full member. At this Conference,
IFA officially appointed Mr. Cao
Hoai Duong, CEO of PVFCCo, as Vice
Chairman of IFA in charge of East Asia
(Japan, Korea, Mongolia and the ASEAN
10). Before, Mr. Cao was unofficially
assigned to this post in November
2013 by IFA Board Meeting in Paris. As
a Vice Chairman of IFA, Mr. Cao will
represent all fertilizer traders and
producers in the region to advice,
provide information, contribute
ideas to improve IFA’s performance.
He also represents IFA to promote its
pre-eminence and operations in the
region.
At the IFA Conference, the
PVFCCo
delegation
attended
all group discussions and deep
dive workshops relating to three
key nutritional groups for trees
including nitrogen, phosphorus and
potassium. During the discussions,
all topics were focused on
production assessment and market
demand.
regional issues; and propose more effective and
transparent solutions.
In the scope of this Conference, PVFCCo
delegation had met with partners such as Uralkali,
Mitsubishi, Willsion, CF Industries, Sojitz…
At this Conference, PVFCCo
agreed to keep participating in IFA
Strategic Task Force. The task force
consists of IFA Board members to
support IFA to search and propose
an action plan aimed at three
key goals: greater collaboration
among members; analysis of
www.dpm.vn
59
SẢN PHẨM CỦA:
43 Mạc Đĩnh Chi, Phường Đa Kao, Quận 1, Tp. HCM - Tel: (84.8) 3825 6258 - Fax: (84.8) 3825 6269 - www.dpm.vn