Viet Nam coal giant hastens change

Viet Nam coal giant hastens change

Viet Nam National Coal-Mineral Industries Holding Corporation Limited
(Vinacomin) will hasten its restructuring efforts to overcome this difficult
period, with more job cuts planned this year, local news reported.

report on business results in the first nine months of this year revealed
that the group had fallen into a tougher situation compared with the same
period last year, with revenue declining, output falling, sales slowing down
and inventories stocking up.

Statistics showed that the group's revenue in the nine-month period dropped
by 7 per cent to VND71.46 trillion (US$3.2 billion), which was equivalent to
just 65 per cent of its target for the full year. Coal exploitation output
and sales also posted declines of between 3 per cent and 6 per cent against
the same period last year, while coal stockpiles totalled 10.8 million
tonnes.

Vinacomin said the group was struggling to sell coal in both the domestic
and foreign markets, adding that in the first nine months, Vinacomin's coal
exports were equivalent to only 37 per cent of the same period last year,
because the Government has just allowed coal export since April this year.

Sales to thermoelectric plants, which accounted for 80 per cent of the
domestic sales, also slowed down.

Meanwhile, Viet Nam still imported coal as the price of local coal was not
as competitive. According to customs statistics, more than nine million
tonnes of coal were imported to Viet Nam in the first eight months of this
year, worth $600 million.

Vinacomin's general director Dang Thanh Hai at the group's conference on
Tuesday said reducing inventories would be a priority task of the group in
the remaining months of this year. The group planned to cut stockpile to
less than nine million tonnes by the end of the year.

In addition, Vinacomin would speed up the recovery of arrears. "Vinacomin
will not promote sale of coal at all costs," Hai said, adding that sale to
customers who had not paid debts could be halted.

Vinacomin would also cut 4,000 jobs this year, the Voice of Viet Nam
reported. The total number of employees at Vinacomin till the end of this
year's second quarter was 115,000.

Recently, Deputy Prime Minister Trinh Dinh Dung asked relevant ministries to
tackle difficulties and support Vinacomin in overcoming this difficult
phase, while ensuring market and production output of the coal industry,
including review of taxes and fees on coal production, and developing coal
export mechanism for the 2016-20 period.

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Ref: http://www.vir.com.vn/viet-nam-coal-giant-hastens-change.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com