DEVELOPMENT STRATEGY

Maintaining and operating Ca Mau Fertilizer Plant Complex (i.e., Urea and NPK) in a stable, safe and effective manner; maintaining capacity of Urea Plant as the result achieved during the last time (from 108% to 112% per year) to optimize the Company’s scale.

Closely following business plan and product consumption for effective production on the basis of ensuring to maximally supply goods for domestic market; maintaining reasonable inventories at plant; arranging and dispatching goods to other areas as well as making a suitable maintenance schedule so as not to affect the Company’s activities.

Strengthening product quality inspection in all steps, applied to all key materials for finished products and at the same time strictly controlling finished products before being supplied to the market to ensure all PVCFC’s products are manufactured with the highest quality to not only meet but also exceed the customer’s expectation.

Maintaining cost savings and minimizing production cost by promoting technical initiatives of management team, operation team and all highly skilled workers of Ca Mau Fertilizer Plant; Striving to reduce the actual consumption of key materials such as gas, power, and chemicals to be equal to or lower than the norms and at the same time complying with quality and safety regulations in all production and processing activities; Developing periodic maintenance plan at a reasonable cost and reducing total production maintenance time of the plant to promptly meet the business schedule.

Making an adequate investment in R&D to timely supplement resources in equipment, facilities, laboratories, and processing plants; Building a good compensation scheme to attract high-quality human resources; Coordinating with leading Centers/Institutes/Schools/Scientists in agriculture and fertilizers to manufacture high-value products to meet the increasingly diverse requirements of markets and customers.

Concentrating the most resources to maintain and develop target markets with strengths in agricultural development in Mekong Delta, Southeast and Central Highlands provinces. These are the rich and large market with potential advantages in exporting key agricultural products in Vietnam, thereby absorbing a large amount of fertilizers. Researching and connecting to build a “High-tech agriculture” production model applied to specific crops in the provinces and cities of Mekong Delta, Southeast and Central Highlands in the following years.

Developing a distribution system both vertically and deeply to increase the number of agents, increasing multiple points of sale (POS) in each province and region to ensure product coverage in major markets as well as improving quality of distribution system in the direction of increasing consumption at each POS, bringing efficiency to distribution chain of all levels.

Investing in expanding supply chains, developing logistics system to satisfy business orientations and strategies in regions and ensuring multiple goals such as storage for distribution system; timely serving crops of the farmers; stockpiling raw materials; balancing logistics costs and commodity price trends to improve business performance and self-trading goods as the fluctuations in raw material prices and potential risks of global supply chain interruption as happened in the past.

Continuing to exploit international market segment based on the advantages in understanding Asian market, especially Southeast Asia, South Asia, and Latin America, thereby improving export proportion of suitable products in the context that fertilizer industry suffers from effect of seasonality to reduce inventory pressure at Plant/General warehouse as well as to implement a reasonable sales strategy in each period.

Maintaining a flexible and attractive sales policy with agents, distributors, domestic and foreign partners, and brokers to ensure harmonious interests between manufacturers - distribution channels towards strategic goal of maintaining a competitive advantage, dominating domestic market and beating foreign competitors.

Fostering marketing strategies for key products of Urea and advanced products, developing marketing strategies for new products, especially key products such as NPK, organic, and Urea-based products in domestic market in the direction of environmental friendliness, developing Vietnam’s agriculture sustainably and effectively; Completing overall marketing strategy for “Ca Mau Fertilizer” brand including portfolio of Ca Mau Urea, Ca Mau NPK, organic fertilizer, and microbiological fertilizer.

Strengthening market research and forecast by regularly monitoring and updating the world and domestic fertilizer prices; domestic demand and supply; seasons, crops, weather, diseases, and prices of agricultural products; competitive pressure from domestic and abroad, thereby improving predictability of fertilizer prices; assessing and analyzing the factors affecting production and business to develop effective response scenarios and plans in the context of macro environment that may have a lot of fluctuations in the coming time.

Enhancing inspection and supervision of the Company’s production and business according to the approved annual plans to ensure compliance with the business plan roadmap already made and completing the set goals; Consolidating and perfecting Committees, decentralizing Committees under BOD and empowering members to actively execute their tasks in the best manner.

Continuously improving the capabilities of developing and implementing corporate governance on the basis of compliance with the Company’s Charter and legal regulations; the Group’s regulations; regulations on corporate governance and regulations on professional ethics of members of BOD; Practicing the world’s and Vietnam’s advanced “Corporate governance practices” to help improve governance efficiency, contributing to good implementation of the Company’s strategy and business plan.

Implement “company restructuring project” in accordance with the policy of the Government and the instruction of the Group in alignment with reducing the State’s ownership rate while maintaining and improving the value of the State’s contribution in PVCFC; Enhancing the role of State representatives in the Company; Restructuring and streamlining the organization, aiming to improve production and business efficiency.

Continuing to consolidate organizational structure under PVCFC by allocating human resources to make it suitable to the employment feature and contents; Creating an attractive working environment so that the employees can rest assured to contribute and devote to the Company; Building a satisfactory compensation scheme for employees, meeting the goal of attracting and developing new personnel, especially highly skilled and highly specialized personnel for the Company; Focusing on fostering and training human resources to improve professional qualifications, knowledge and skills through E-learning towards a long-term and continuous learning process and developing self-learning ability of employees and so on.

Implementing the State policy and the direction of PetroVietnam, PVCFC continues to divest and reduce the percentage of ownership and capital contribution of PetroVietnam in PVCFC according to the proposed schedule on the basis of strictly complying with State regulations; Considering to issuing ESOP shares for the purpose of recognizing employee contributions and meeting the goal of human resource maintenance and development, especially the employees with high qualification and skills or those with great contributions to the Company.

With the increasingly improving position and strength of PVCFC, especially the financial capacity which has continuously increased in the past 10 years, at present, many major domestic and foreign partners are coordinating and proposing to participate in potential investment projects deployed by the Company. Therefore, based on actual conditions and strategic goals of the Company, PVCFC will consider, research and propose pilot implementation of a number of projects such as M&A, joint venture, association; making investment with 100% contributed capital into some fields related to the Company’s core business activities such as hi-tech agriculture, fertilizer and chemical production and business to further complete the Company’s value chain in the new period.

Based on advanced corporate governance practices, PVCFC aims to develop and prepare financial statements in accordance with International Financial Reporting Standards (IFRS). It will take a certain time for transformation when IFRS are relatively new in Vietnam and the application of these standards of Vietnam’s enterprises is still quite little. At present, PVCFC is working with reputable strategic consulting partners to build project implementation roadmap in each specific phase.