thousand tons
REPORT AND ASSESSMENT OF BOM
BUSINESS PERFORMANCE IN 2021
The year 2021 has ended in the heavy impacts of Covid-19 pandemic to the global economic activities. In Vietnam, Covid-19 epidemic broke out from the end of April 2021 in many localities together with a new variant that was fast spreading, dangerous and complicated; accordingly, directives on social isolation for pandemic prevention have caused serious effects to supply chain, production and business of enterprises. Facing the complicated developments of socio-economic environment, PVCFC has strived to successfully implement all assigned objectives, ensuring effective prevention of Covid-19 pandemic, thanks to proactively overcoming difficulties and taking advantage of favorable conditions.
Performance of production and business targets
| No. | Items | Unit | Implemented 2020 | 2021 | Rate | ||
|---|---|---|---|---|---|---|---|
| Planned | Implemented | Comparison (%) | |||||
| A | B | C | 1 | 2 | 3 | 4=3/2 | 5=3/1 |
| I | Production output | ||||||
| 1 | Products | ||||||
| - | Urea converted | Thousand tons | 934.77 | 875.49 | 898.56 | 103% | 96% |
| In which, Urea-based products | Thousand tons | 35.51 | 74.30 | 75.25 | 101% | 212% | |
| - | NPK | Thousand tons | 47.87 | 48.19 | 101% | ||
| 2 | Consumption | ||||||
| - | Urea converted | Thousand tons | 973.39 | 765.87 | 755.50 | 99% | 78% |
| Urea-based products | Thousand tons | 35.15 | 62.65 | 68.42 | 109% | 195% | |
| - | NPK | Thousand tons | 47.18 | 38.39 | 81% | ||
| - | Trading of imported fertilizers | Thousand tons | 171.48 | 150.00 | 161.07 | 107% | 94% |
| II | Consolidated financial indicators | ||||||
| 1 | Total revenue | VND billion | 7,700.33 | 9,168.32 | 10,041.67 | 110% | 130% |
| 2 | Profit before tax | VND billion | 716.53 | 924.45 | 1,956.27 | 212% | 273% |
| 3 | Profit after tax | VND billion | 662.45 | 867,50 | 1,826.12 | 211% | 276% |
| 4 | Obligations to State budgets | VND billion | 87.09 | 98.85 | 222.41 | 225% | 255% |
| III | Parent company financial indicators | ||||||
| 1 | Total revenue | VND billion | 7,663.86 | 9,132.59 | 10,056.63 | 110% | 131% |
| 2 | Profit before tax | VND billion | 714.83 | 920.66 | 1,950.55 | 212% | 273% |
| 3 | Profit after tax | VND billion | 661.56 | 864.57 | 1,821.83 | 211% | 275% |
| 4 | Obligations to State budgets | VND billion | 80.24 | 91.87 | 196.77 | 214% | 245% |
| 5 | Pre-tax ROE | % | 14% | 17% | 37% | 212% | 273% |
| 6 | Investment value | VND billion | 112.89 | 96.84 | 72.58 | 75% | 64% |
Notes: (*) Targets for 2021 were implemented according to PVCFC’s Disclosure No.2064/PVCFC-IR dated 27 December 2021. These targets were adjusted to replace the production and business targets approved in Resolution No.854/NQ-PVCFC dated 27 April 2021 at the Annual General Meeting of Shareholders 2021.
Comment:
Performance
All targets, including both consolidated targets and Parent Company’s targets assigned by GMS have been exceeded:
Production output reached
Production output reached 898.56 thousand tons, reaching 103% of the plan, 96% higher than the same period in 2020. The Company has pushed new product development based on Urea and NPK with an output of 75.25 thousand tons and 48.19 thousand tons, respectively, both exceeding 1% of the plan.
Urea consumption reached
755.50
thousand tons
Urea consumption volume reached 755.50 thousand tons, completing 99% of the plan and equal to 78% of the same period in 2020. Consumption was lower than the same period due to Covid-19 breakout from April 2021 and social isolation which limited good shipment. Self-trading products reached 161.07 thousand tons, completing 107% of the plan and equal to 94% of the same period in 2020.
Total consolidated revenue reached
VND
10,041.67
billion
Total consolidated revenue reached VND 10,041.67 billion. This is the first year that the Company’s revenue reached more than VND 10,000 billion with constant efforts in consumption as well as benefiting from selling price increase.
Consolidated profit before tax was valued at
VND
1,956.27
billion
Consolidated profit before tax and Parent company’s profit before tax were valued at VND 1,956.27 billion and VND 1,950.55 billion, respectively. This is the highest profit ever of PVCFC thanks to increase in revenue, the Company implements activities to optimize savings, reduce savings, and is flexible in management activities.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY REPORT
Social responsibility
-
Apart from social security programs on building community facilities, PVCFC has actively supported and donated VND 28.14 billion to Covid-19 prevention and control activities including VND 5 billion to Covid-19 Vaccine Fund; giving medical supplies and equipment for health facilities and localities worth VND 20.64 billion; donating VND 1 billion to take Ca Mau people home; supporting Covid-19 Vaccine Fund of Ca Mau province with a total value of VND 1 billion; giving VND 500 million to help farmers in the Mekong Delta to overcome challenges caused by Covid-19 pandemic.
-
Implement the “together we share” program in Southwestern and Southeastern Regions-Central Highlands, accompanying local people to overcome difficulties and consequences of Covid-19 pandemic, helping farmers recover agricultural production activities.
-
PVCFC’s trade and worker unions have organized many meaningful programs and activities under Ca Mau fertilizer brand, culture and identity such as renewal program to celebrate the 10th anniversary of the company, participation in Petro Vietnam-Ca Mau 2021 Marathon themed “Future Run beyond Reach”, folk cake festival themed “Delicious Dishes-acts of kindness during pandemic”, Zero-dong meal program to support people return Ca Mau province.
-
From 8 December 2021, some employees in housing area have been found to be positive for Covid-19, Covid-19 Prevention and Control Board has coordinated with Ca Mau Center for Disease Control and Prevention (CDC) to conduct rapid Covid-19 tests, provide guidelines on Covid-19 quarantine and isolation, health care for workers to quickly control the disease.
Assessment of Board of Management on environmental criteria
Security, safety, environment and fire prevention: the Company always strictly complies with regulatory requirements and in accordance with ISO 14001:2015 standard to ensure environmental compliance. Waste sources of plants are closely monitored with waste minimization and quality control in accordance with environmental permitting regulations before being discharged.
Apart from conducting periodical environmental monitoring to ensure compliance with regulations on wastewater and emission quality, the Company also installs automatic monitoring systems to continuously monitor wastewater and emission results online, and transmitting the data to the Ca Mau Department of Natural Resource and Environment with no environmental parameters exceeding the permissible limit. Besides, solid wastes (daily waste, ordinary industrial solid waste, hazardous waste) are classified, collected and handled pursuant to regulations.
Lotus pond for wastewater treatment in Ca Mau Fertilizer Plant
PRODUCTION AND BUSINESS PLAN FOR 2022
PVCFC continues to face difficulties and challenges in 2022, to be specific, complicated Covid-19 pandemic with speedy spread of new variants affecting the global supply chain; conflict between Russia and Ukraine causing negative effect to the global financial market, highly increased cruel oil price, inflation, logistic interruption leading to shortage of supply sources. However, thanks to the advantages from the Group in ensuring gas supply for highest production capacity together with the internal strength and determination of leaders and employees, PVCFC continues to set challenging goals in 2022 to submit to the GMS, to be specific:
Main duties
PVCFC’s plan targets for 2022
Production output
| No. | Items | Unit | Planned 2022 |
|---|---|---|---|
| I | Production output | ||
| 1.1 | Urea converted | Thousand tons | 860.10 |
| - | In which: Urea-based fertilizers | Thousand tons | 80.00 |
| 1.2 | NPK | Thousand tons | 80.00 |
| II | Business volume | ||
| 2.1 | Urea | Thousand tons | 770.27 |
| 2.2 | Urea-based fertilizers | Thousand tons | 80.00 |
| 2.3 | NPK | Thousand tons | 80.00 |
| 2.4 | Trading of imported fertilizers | Thousand tons | 202.00 |
Financial plan
| No. | Items | Unit | Planned 2022 |
|---|---|---|---|
| I | Financial indicators (Consolidated) | ||
| 1 | Total revenue | VND billion | 9,059.73 |
| 2 | Profit before tax | VND billion | 543.66 |
| 3 | Profit after tax | VND billion | 513.26 |
| 4 | Obligations to State budget | VND billion | 73.92 |
| II | Financial indicators (Parent company) | ||
| 1 | Owner’s equity | VND billion | 6,447.03 |
| 2 | Total revenue | VND billion | 9,014.56 |
| 3 | Profit before tax | VND billion | 542.11 |
| 4 | Profit after tax | VND billion | 512.41 |
| 5 | Pre-tax ROE | % | 8% |
| 6 | Obligations to State budget | VND billion | 67.73 |
| 7 | Capital construction investment and equipment purchase | ||
| 7.1 | Total investment | VND billion | 929.96 |
| - | Capital construction investment and equipment purchase | VND billion | 929.96 |
| - | Capital contribution to member unit | VND billion | |
| 7.2 | Investment capital source | VND billion | 929.96 |
| - | Owner’s equity | VND billion | 290.67 |
| - | Borrowings and others | VND billion | 639.29 |
Long-term investment and development plan
In 2022, the investment is focused on completion of transition projects, to be specific:
| No. | Items | To be implemented in 2022 |
|---|---|---|
| 1 | Raw CO2 conversion and supply | Completing trial run for project acceptance and settlement |
| 2 | PVCFC’s R&D Center | Completing land use right transfer procedures, preparing for investment and construction some technical infrastructures |
In addition, the Company focuses on investment in “Long An warehouse project”, “Ho Chi Minh City Communication station Head office” while seeking opportunities for the projects of finding alternative sources of raw materials and fuels, diversifying products, investing in digitization for production management, building Data warehouse and procuring materials and equipment to ensure that the plant is always maintained in a safe and stable operation, to be specific:
| No. | Items | Purposes of researching and investment |
|---|---|---|
| 1 | Long An warehouse project | At present, PVCFC is leasing warehouses that can meet the current sales volume. However, based on the development strategy, the Company needs to expand production and business and diversify products such as Urea, NPK, organic fertilizer, microbial organic fertilizer, and others. Thus, the demand for raw materials serving production and the production output will increase. Moreover, to be proactive, flexible and effective in sales, raw materials for production must be continuously supplied, together with the opportunity factor, PVCFC needs to have a warehouse for raw material and product storage. |
| 2 | Ho Chi Minh City Communication station Head office | With the Company’s development orientation according to the strategic vision to 2025 to become a leading enterprise in fertilizer production and trading in Vietnam and Southeast Asia, it is necessary to consider and invest new modern and comfortable office to be worthy of a leading enterprise. |
| 3 | Coal gasification plant investment project | Implementing the strategy of studying and seeking alternative raw materials for the existing gas serving Ca Mau Fertilizer Plant, with the goal of reducing pressure from gas supply source, diversifying products and improving production efficiency. |
| 4 | Microbiological organic fertilizer plant | Organic fertilizer is an inevitable trend as per the development direction of the future agricultural industry towards sustainable development and increasing position, brand and competitiveness of the Company. |
Major solutions
-
Continuing to coordinate with PetroVietnam to realize production and business goals.
-
Strengthening inspection and supervision in all aspects to promptly overcome shortcomings to well implement the goals, tasks, plans and strategies as set out.
-
Continuing to build Data warehouse and connect IT-based application systems.
-
Deploying succession planning for key positions; building a team of experts to meet the actual needs in production and business and the Company’s development strategy.
-
Continuing to develop and complete PVCFC culture re-creation project.
-
Focusing on operating and maintaining production capacity of the plant to ensure production output as planned.
-
Building database, upgrading application software, automating plant operations; building log sheets to add into IMS module, calculating and giving out data sets for equipment related to capacity, performance, system status, and device risks to monitor and support production operation and supervision.
-
Continuing to expand and implement gas and power reduction/optimization programs in comparison to norms; renovating equipment to increase capacity of Ammonia and Urea workshops.
-
Continuing to seek alternative materials for gas, to be specific, studying opportunities for producing gas by other technologies; coordinating with PVN on master plan for long-term gas source in the Southwest region.
-
Continuing to maintain and increase the existing market; considering colored Urea development orientation, product lines with differences, etc.
-
Focusing on dominating target market in Southwest, Southeast and Central Highlands in the context of fierce competition of Ca Mau NPK; organizing raw material procurement for NPK production and efficient logistics.
-
Researching and building high-tech agricultural production models according to each scale and focusing on crops in Mekong Delta.
-
Building a centric brand development strategy for Ca Mau Fertilizer identity, including Ca Mau Urea, NPK complex fertilizers, and microbial organic fertilizers.
-
Applying digital technology in business activities (upgrading DMS, developing functions on “2 Nông” App, building and developing Omni Contact Center system, etc.).
-
Accelerating settlement for completed projects and proactively deploying new projects.
-
Closely following strategic goals to carry out research and assess feasibility of projects and items to optimize power consumption and reduce dependence on gas supply.
-
Researching and seeking opportunities for investment cooperation and M&A to diversify products and services to increase value and profit for the Company.
-
Strictly controlling progress, effectively controlling costs and quality of investment projects. Reviewing and re-evaluating project investment efficiency in accordance with the actual situation and the market factors before approval.
-
Reviewing and completing policies and regimes for mid-level management team and key positions to retain and attract effective human resources.
-
Improving compensation and benefit scheme based on contribution ability of each individual and implementing in each phase.
-
Building practical training programs (in which employees can suggest suitable training courses to meet the work requirements and personal development). Heads of Division take time to train and develop their team.
-
Thoroughly applying E-learning platform to train and test, encouraging employees to build lessons in video form to add to E-learning ecosystem.
-
Promoting professional training to improve skills of maintenance staff, especially in the field of electricity and control.
-
Studying to provide services in fertilizer supply chain in form of B2B.
-
Finding opportunities with product lines that are forecasted to become trend as well as boldly stopping unfeasible research projects.
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Accelerating and encouraging employees to carry out research projects and initiatives that bring remarkable efficiency to the Company.
-
Researching and implementing solutions to increase alternative raw materials and fuels for PVCFC’s production. Prioritizing to deploy the solutions with low investment costs but bringing quick and obvious results.
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Building corporate governance system according to best practices, researching to prepare financial statements according to IFRS.
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Arranging capital for projects that ensure efficiency, management and preservation of capital.
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Closely following the Group, Ministries and Sectors to give explanation on obstacles in implementing Law on Tax No.71/2014/QH13 on fertilizers and propose to the National Assembly to early adjust to add fertilizers to the list of goods subject to VAT.
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Proactively and promptly grasping the directives of the Government and Ministries Covid-19 pandemic prevention. Tightening the Company’s pandemic control process to ensure no production and business interruption.
-
Maintaining environmental management system according to ISO 14001 (EM.14000) and Occupational Health and Safety Management Systems according to OHSAS 18001.
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Strictly controlling security, safety and fire prevention at plant.