PVTEX Dinh Vu: Increasing capacity to make good use of market opportunities

Dinh Vu fiber factory, Petrochemical and Petrochemical Fiber Joint Stock Company (PVTEX) have just put 2 more production lines into operation, increasing the plant’s capacity to 12 lines. Up to now, the factory has produced 2,900 tons of DTY and consumed 2,500 tons of products, etc.

Before the Lunar New Year, on January 31, 2019, we had a meeting with leaders of Petrochemical and Petrochemical Fiber Joint Stock Company (PVTEX). PVTEX General Director Dao Van Ngoc said, since restarting 3 DTY yarn production lines on April 20, 2018, the factory has produced 2900 tons of DTY and consumed 2,500 tons of products so far. Making good use of market opportunities, PVTEX also signed a contract to sell 1,338 tons of all kinds of DTY yarn to 21 customers, the total value of pre-tax contracts was VND 49.5 billion, profit of VND 2.5 billion before the fee.

Although the results are only the first step but this is a signal that the fiber market after the cycle of going to the bottom in 2014-2015, since the end of 2016, so far has rebounded.

In particular, the domestic fiber market is wide open with domestic fiber demand of 255,000 tons/year while total production capacity of PVTEX and Formosa factory only meet 170,000 tons/year. Besides, the demand for DTY nationwide is 190,000 tons/year, while the national production capacity is only 90,000 tons/year.

Mr. Ngoc also said that PVTEX and An Phat Complex Partners (APH) are actively maintaining the remaining DTY lines to put into operation, with the target that the second quarter of 2019 will be raised to factory capacity up to 25 DTY yarn production lines.

PVTEX and APH are also actively developing a 5-year production and business cooperation plan and negotiating a cooperation contract, expected to be signed in the first quarter of 2019 and then embark on the implementation of maintenance in the II and III quarter. The target of the IV quarter of 2019 is restart the whole factory.

However, to re-run the entire factory, it is necessary to have a large financial source – nearly VND 1,000 billion. Currently, PVTEX is negotiating with partners to arrange finance. Besides, due to the time to stop the whole factory, many engineers of the factory have stopped or transferred their jobs, so PVTEX must recruit and retrain workers. Currently, the number of workers in the factory has increased from 150 employees to 230 employees. It is expected that when the plant goes into full operation, the number of employees will reach 800 people – Mr. Ngoc added.

The good news is, PVTEX and PVN have successfully negotiated mediation with HEC contractor, ending the dispute process for more than 2 years at ICC international arbitration; PVTEX has negotiated to successfully repay debts with Dinh Vu Industrial Zone to be re-granted utility services for the plan to increase the capacity of the factory.

Along with that, PVTEX is implementing the settlement of the project, which is expected to be completed at the beginning of the II quarter/2019, then will build the plan of capital restructuring according to the project approved by the Prime Minister in 2019.

Also on January 31, Chairman of the Board of Members of Vietnam Oil and Gas Group Tran Sy Thanh visited and encouraged workers at Dinh Vu Fiber Factory, giving Tet gifts to workers and engineers at work again during Tet holiday.

In the evening of the same day, PetroVietnam and PetroVietnam Petrochemical and Fiber Joint Stock Company organized “Spring gratitude 2019” to encourage PVTEX employees to welcome the new year.

Productivity and Quality Office