PVCFC acquires South Korean company

VIETNAM, May 24 - HÀ NỘI — Petrovietnam Cà Mau Fertiliser JSC (PVCFC) has revealed that it has successfully completed the acquisition of the Korea - Vietnam Fertiliser Co., Ltd (KVF).

The deal was done on May 17, followed by the issuance of the business registration certificate by the Department of Planning and Investment of HCM City, making PVCFC the new owner.

Their acquisition aims to penetrate the NPK market in the southeast, Central Highlands and central regions, while PVCFC's current NPK plant serves demand in the southwest region and Cambodia. KVF's NPK factory area will also be used as a raw material warehouse.

Vietcap Securities JSC expects profits from the traditional NPK segment of PVCFC to double in 2024, offsetting losses from the newly acquired NPK subsidiary.

KVF was founded on May 21, 2015, with a registered capital of VNĐ212.5 billion (US$8.3 million), fully comprised of foreign investment. The company primarily operates in the production of NPK fertilisers.

KVF has undergone multiple capital raises, the first in 2016, when the company raised the registered capital to nearly VNĐ434 billion.

In 2019, the company underwent two additional capital mobilisations. The first increase occurred in October, bringing the capital to over VNĐ1.1 trillion, with 100 per cent of the investment coming from foreign sources: Huchems Fine Chemical Corporation (49 per cent) and Taekwang Industry Co., Ltd (51 per cent).

KVF again raised its capital to nearly VNĐ2.1 trillion at the end of 2019.

According to its website, KVF currently owns the Korea - Việt NPK plant in HCM City. The plant has a capacity of 360,000 tonnes per year and has been operational since December 2017.

The acquisition of 100 per cent of KVF's capital by PVCFC was approved in 2023, with an estimated cost of $25 million.

After reporting a significant decline in profit last year due to lower fertiliser prices, the company posted a recovery in the first quarter of 2024.

Its quarterly report showed that the company's revenue increased to VNĐ2.7 trillion, with an increase of 52.2 per cent year-on-year in net profit to VNĐ346 billion.

According to the 2024 Annual General Meeting documents, PVCFC has a prudent growth plan with revenue projected at around VNĐ11.9 trillion this year, down 5 per cent from 2023 and profit after tax is expected to be down 28 per cent to 795 billion.

As a result, the company has already achieved 23 per cent of its revenue target and nearly 44 per cent of its profit target for the year. — VNS