VietNamNet Bridge - Vietnamese Petrolimex Petrochemistry will be under pressure as TASCO, the Thai bitumen manufacturer, has bought 41 plants in Vietnam and Indonesia from a French manufacturer.

In a recent merger & acquisition (M&A) deal worth $61.8 million, Thai Tipco Asphalt (TASCO) has taken 41 plants, hoping to increase its bitumen output by 300,000 tons at least. 

The giant’s production capacity and prestige, analysts say, would be high enough to make the Vietnamese petrochemistry enterprise tremble with fear.

Petrolimex Petrochemistry (PLC) is a subsidiary of Petrolimex, well known as a petroleum import/export corporation. It is now leading the bitumen and lubricant market with market share of 30-40 percent.

The 2015 finance report showed that PLC got VND328.6 billion in post-tax profit, including VND171 billion from the holding company. 

Vietnamese Petrolimex Petrochemistry will be under pressure as TASCO, the Thai bitumen manufacturer, has bought 41 plants in Vietnam and Indonesia from a French manufacturer.

The asphalt manufacturing brought VND157 billion in profit, while chemicals brought VND277 million only.

In 2005, asphalt could only make up 28 percent of total revenue of VND312 billion. However, 10 years later, the business field accounted for 53 percent of total revenue in 2015.

CMB Securities said that asphalt was the major production field and the driving force for PLC in 2015.

The 2015 asphalt output was 280,000 tons, up by 25 percent over the previous year, and turnover accounted for 53 percent. It saw 9.3 percent growth rate, accounting for 53.3 percent of total gross profit,

MB Securities also believes that in 2016, asphalt will continue to make a major contribution to PLC’s business performance. 

PLC would still see prosperity thanks to increasingly high demand since more and more road projects will be implemented in the time to come.

The world’s oil price has fluctuated slightly, which has helped improve PLC’s profit margin, while demand for investment in infrastructure in Vietnam is relatively high.

However, at the shareholders’ meeting held recently, PLC’s board of management predicted big difficulties for asphalt manufacturing due to lower demand and stiffer competition created by the presence of other manufacturers.

According to Vu Van Chien, a member of PLC’s Board of Management, PLC sold 300,000 tons of asphalt in 2015, but the figure may decrease to 230,000 tons in 2016.

Of the VND43 billion worth of profit PLC had in the first quarter of 2016, the majority came from lubricants, while asphalt could not bring profit. 

PLC’s managers even said it was good that the company did not take a loss.

There are seven bitumen manufacturers in the market, four of which are foreign invested ones. The other three include PLC and Vietnamese private enterprises.


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