DAP2-Vinachem JSC strives to overcome difficulties

10:15 | 26/08/2018 Companies

(VEN) - Despite difficulties in production and business activities, leaders and workers of the DAP Lao Cai Joint Stock Company (DAP2-Vinachem JSC) with high determination have recently made every effort to complete their business objectives.  

dap2 vinachem jsc strives to overcome difficulties
Modern production line to manufacture high quality products

Diversifying products to gain market share

Reports of the DAP2-Vinachem JSC showed that its production and business activities in the first 6 months of 2018 had positive signals. Accordingly, the DAP production during the period reached 122,190 tons, equal to 50.9 pct of the year plan and up 98.2 pct over the same period in 2017. Volume of consumption also hit 126.57 tons, reaching 52.7 pct of the 2018 plan and increased by 95.5 pct compared to the same period last year.

Leaders of the DAP2-Vinachem JSC said that the period from late 2015 to early 2017 was the hardest time of the fertilizer market. DAP prices in the domestic market decreasing by 20-25 pct, while the world prices also dropping from 21 to 28 pct, affected negatively on the production and consumption of domestic fertilizer products. However, the self-defense tariffs applied to DAP and MAP products announced by the Ministry of Industry and Trade partly eased the company’s difficulties before pressure from imported fertilizers and also created opportunities for its DAP products to recover its market share. Therefore, the company has gradually escaped losses, and made progresses in production and business activities. In the last months of 2017, fertilizer prices were higher than variable costs, and the cashflows were basically enough to cover the costs of raw materials for production.

In order to improve the efficiency of production and business, the company leaders said that apart from improving product quality, customer care services, and sale policies, they also need to focus on product diversification. Therefore, in addition to DAP products with 3 colors: yellow, black and brown that are already available in the market, by the end of 2017, the company successfully produced jade DAP products and were accepted by consumers. The new jade DAP products helped significantly increase fertilizer consumption and were a major player in the company's DAP sales structure.

In addition, the DAP2-Vinachem JSC also worked with foreign partners, Vietnamese fertilizer exporters and successfully exported to hard-to-please markets such as the Republic of Korea, Myanmar, Indonesia, India, Cambodia ... and received good feedbacks from the customers.

Gathering up productive force to meet year-end targets

dap2 vinachem jsc strives to overcome difficulties
A production area of the company

From now to the end of the year, to fulfill the set targets the DAP2-Vinachem JSC will concentrate on solutions such as: producing diversified products in accordance with market demand to increase market share; ensuring stable consumption growth via sales channels (agents, retailers, direct sales to fertilizer producers and exporters); reducing price competition, or adopting trade policies. Accordingly, the company will develop flexible sales policies and implement solutions to reduce the price gap between its products with imported ones.

In addition, the DAP2-Vinachem JSC also propose amendments to the Tax Law 71/2014/QH13 so that fertilizer commodities will be subject to the Value Added Tax with the tax rate from 0 to 5 percent; amendments to the Decree 122/2015/ ND-CP on the calculation of export taxes on domestically-produced fertilizers. The company also asks functional agencies to tighten control of the fertilizer market, especially the DAP imports to protect domestic production.

The company also asked banks to consider lowering interest rates from 9.6 pct to the most preferential level and extending repayment period from 10 years to 20 years. It also requests the State Bank of Vietnam (SBV) to apply a special mechanism as it is one of 12 difficult projects.

Notably, as for Vietinbank loans, it asks the Prime Minister and the SBV to reduce the interest rate from the current 9.5 pct to the most preferential level; extend the repayment period from 12 years to 20 years, and be allowed to repay gradually the principals and interests from 2019.

From now till the end of this year, the DAP2-Vinachem JSC will focus on maintenance, repair works and use materials

and equipment effectively in order to maintain stable operations of equipment and production lines, and reduce costs

of unexpected repairs and failures.

Viet Anh