VADFCO’s new turning-point

VADFCO became a joint stock company in 2010 following the equitization of the Van Dien Fused Magnesium Phosphate Company. Its major fields of business include producing and trading in fused magnesium phosphate and other kinds of fertilizer, construction materials, and packaging; and exporting fertilizers. The company also imports fertilizers and materials, machinery and equipment catering for production and trade.

VADFCO currently has chartered capital of over VND289.7 billion. With an annual capacity of 450,000 tonnes, its plant supplies the market with more than 300,000 tonnes of fused magnesium phosphate each year. VADFCO has become the largest fused magnesium phosphate producer using anthracite coal in Southeast Asia. Fused magnesium phosphate fertilizer sales account for 69-74 percent of company revenue; and NPK fertilizer 26-31 percent. VAF shares of the company have been listed with reference price of VND20,000 per share.

VADFCO General Director Hoang Van Tai said that to promote the company’s sustainable growth, a number of solutions have been taken, including the application of new production technology and the construction of a new fertilizer plant with an annual capacity of 500,000 tonnes in Thanh Hoa Province’s Bim Son Town. From the second quarter of this year until the second quarter of 2018, VADFCO will build three new blast-furnaces to produce 500,000 tonnes of fused magnesium phosphate fertilizer per year.

After listing its shares on HOSE, VADFCO is expected to become a strong business. Currently, about 500 fertilizer manufacturers are operational in the Vietnamese market, but only more than 10 of them can be compared with VADFCO. These include the PetroVietnam Fertilizer and Chemicals Corporation with DPM share, the Lam Thao Fertilizers and Chemicals Joint Stock Company (LAFCHEMCO) with LAS share, and the Binh Dien Fertilizer Joint Stock Company. In the field of NPK fertilizer and fused magnesium phosphate production, LAFCHEMCO, the Ninh Binh Phosphate Fertilizer Joint Stock Company (NIFERCO) with NFC share, and the Southern Fertilizer Joint Stock Company (SFC) with SFG share can be placed equal with VADFCO.

In terms of business efficiency, VADFCO’s return on equity (ROE) ratio is at the medium level compared with the above three companies. Specifically, this ratio of VADFCO is 19.36 percent, higher compared with NIFERCO but lower compared with SFC (30.25 percent). The current market price of LAS share is about VND28,000; SFG share over VND16,000. So it’s not easy for VAF share to compete on price with SFG share. However, VAF share can compete with NFC share which is currently priced at VND26,000.

Hopefully, good reputation and strong competitiveness of VADFCO’s fertilizer products will help the company attract more investors and further develop in a sustainable manner.

Ngoc Anh