Vinachem plans $478mil expansion

The Viet Nam Chemical Group (Vinachem) plans to invest nearly VND8.6 trillion (US$478 million) in enlarging production this year, up 88 per cent against last year, Nguyen Gia Tuong, Vinachem deputy general director, said at a conference in Ha Noi on Wednesday.

Addressing the conference on implementing the group’s 2010 production and business plans, Tuong said that Vinachem would focus on investing in key medium – and long-term projects from now until 2015, such as expanding the Ninh Binh urea fertiliser project, the Bac Nhac Son mining project and the DAP fertiliser project No 2.

To meet additional demand for raw materials, Tuong said the group planned to develop material sources. Vinachem is looking to exploit a rock salt mine in Laos, which is expected to produce roughly 500-600 tonnes of kalium fertiliser yearly.

However, Tuong admitted that the group’s investment plans were also facing challenges, such as transportation due to the country’s poor infrastructure. He also said it was difficult for the group to get hold of foreign currency, which was needed to meet import costs.

He said material sources were the biggest thorn in the group’s side.

Da Nang Rubber Joint Stock Company, a member of a Vinachem, alone needs roughly 13,000 tonnes of rubber annually, while the company can purchase just 4,000 tonnes from the Viet Nam Rubber Group. Meanwhile, the company’s rubber demand is expected to double by 2011 when its new plant begins producing 600,000 radial tyres a year.

A Da Nang Rubber Joint Stock Company’s representative said that his company could still buy rubber from other sources but its quality was unreliable.

Vinachem has asked the Government to permit the group to access foreign currencies to pay for imports of equipment for its fertiliser production projects, which it said were indispensable to national food security.

Vinachem has also proposed that the Government speed up infrastructure projects, especially the Ha Noi-Lao Cai and Hai Phong-Dinh Vu IZ railways.

The group, which resulted from the restructuring of Viet Nam Chemical Corporation, now operates as a holding company with 28 affiliates and 16 joint venture companies.

Vinachem specialises in manufacturing fertilisers, pesticides, chemicals, petrochemicals and pharmaceuticals, in addition to mining and rubber processing.

VietNamNet/Viet Nam News

Tags: Vietnam chemical industry, Vinachem