MARD speeds up Vinacafe's equitisation (Photo VNA) Hanoi (VNA) -After a long period of hesitation, the Vietnam National Coffee Corporation(Vinacafe) is being pushed towards equitisation once more by the Ministry ofAgricultural and Rural Development (MARD).
During a March 5 meeting at Vinacafe’s headquarter, Deputy Minister Ha Cong Tuansaid he was not completely confident about the company’s latest restructuringplan.
According to Vinacafe, the company has formulated and submitted to the MARD areorganisation and modernisation scheme for the period 2017-2020, while waitingfor the Prime Minister’s consideration and approval.
It proposes equitisation at the parent company (Vinacafe), including sevenagricultural companies and three other auxiliary units, plus the equitisationof 18 other subsidiaries, dissolution of four and the possible splitting-up ofone.
The said plan will be Vinacafe’s third approved scheme since 2012. But Tuấn wasdoubtful it would sit well with the Government this time.
He also expressed the Government’s firm decision on getting Vinacafe listed onthe stock exchange, regardless of any difficulties that may arise.
In 2017, the corporation managed to equitise five subsidiaries. Nonetheless,there remain unresolved issues for each one, ranging from unapproved land usageto financial troubles, significantly prolonging the evaluation period anddelaying the ultimate listing deadline.
Deputy Minister Tuan said Vinacafe has made very slow progress in implementingthe plan’s content, compared to other State-owned enterprises.
He questioned the reason why two previous installments of Vinacafe’srestructuring plan failed, whether for reasons of feasibility or capability,while asking the company to better define its production and businessorientation.
The MARD has requested Vinacafe lessen their dependence on the existing 16,500hectares of coffee plantation, and develop a vertically integrated chain ofpurchasing, processing, and export. But it seems like they have failed to graspa larger market share.
Vinacafe set a 2018 revenue target of over 3.8 trillion VND (169 million USD),with a revenue goal of 96 billion VND (4.27 million USD).
At the end of 2017, the corporation reported revenue of 3.7 trillion VND (164.8million USD). However, net profit came to just over 77 billion VND (3.4 millionUSD), just 73 percent of the yearly goal.
The reason for the decrease in profit is a significant drop in coffee pricesduring the first quarter of 2017, coupled with reduction in farming area,leading to decreased productivity and general profit.
Vinacafe has made promises to focus on intensive investment, increasingproductivity, lowering prices while stabilising output, in the hope ofincreasing quantity, export turnover and achieving a better growth andefficiency targets than 2017’s.
According to figures released by the General Statistics Office, coffee exportsin the first two months of 2018 are estimated at 336,000 tonnes, up by 17.6 percentyear-on-year.
The export value of coffee reached 652 million USD in the first two months of2018, a slight increase of 0.8 percent over the same period in 2017.-VNA
VNA
