Nghe An Petroleum Construction Joint Stock Corporation (PVNC): On the road to overcoming difficulties

(Baonghean) - Before the 2014 Annual General Meeting of Shareholders scheduled to be held on May 17, 2014, Nghe An Newspaper reporters interviewed Mr. Phan Hai Trieu - Chairman of the Board of Directors of Nghe An Petroleum Construction Joint Stock Corporation PVNC about the upcoming plans of the unit.

Concrete mixing station with capacity of 120m3/h in Thai Binh constructed by PVNC Corporation.

PV: Could you tell us about the current production and business situation of the Company?

Mr. Phan Hai Trieu:The past time has been a very difficult time for many businesses in the country, especially those in the construction and real estate sectors. PVNC Corporation is no exception. The real estate market is frozen, there is a lot of debt, the state has cut public investment, there is a large inventory, the circulation of all goods is difficult, and the supply and demand of the real estate market are unbalanced. In that context, PVNC Corporation has accepted the reality and is trying to find every solution to continue production and business in the coming time.

In 2011, after handing over the Truong Thi Petroleum Apartment Complex with 120 adjacent apartments to customers, the Corporation continued to hand over the housing area for employees of the Vung Ang Thermal Power Plant, invested by the Vietnam National Oil and Gas Group (PVN) and PVNC as the general contractor. The Corporation had planned to participate in the construction of the Quang Trach Thermal Power Plant project, the Thai Binh Thermal Power Plant project, and other large projects with the Vietnam Oil and Gas Construction Joint Stock Corporation (PVC) as the general contractor and partially assigned the work to PVNC. However, due to the global and domestic economic crisis, the projects were delayed, and the PVNC-invested projects in Quy Hop were stopped due to the sluggish real estate market; the Hoang Mai Urban Area Project PVNC returned half of the project land (30 hectares/60 hectares) to Hoang Mai Town. Due to difficult economic conditions, concrete supply equipment for large projects such as Vung Ang thermal power plant project, Formosa, and budget capital projects are also waiting for opportunities.

In May 2012, PVNC issued a Resolution on reducing management staff and direct production workers. Regarding bank debt, PVNC has built a debt repayment roadmap until 2015 by focusing on debt collection, paying off due loans. Paying off old loans and borrowing again at lower interest rates. Reducing interest rates in 2011 from 20% to 9.5-11%. On September 23, 2013, the Investment and Development Bank of Vietnam (BIDV) approved PVNC's debt repayment roadmap until 2018. In recent years, PVNC has always paid attention to paying the state budget. The growth rate in the period 2005 - 2010 increased by 150% - 200% and always reached the target 2 months ahead of schedule.

PV: According to the assessment, the coming time will still have many difficulties. So what are the operational plans of the Corporation, sir?

Mr. Phan Hai Trieu:PVNC has also had experience in overcoming difficulties in the years: 2001, 2005, 2008. However, this crisis is prolonged and global. This is a great lesson for PVNC leaders, officers and employees in management and investment work.

In 2014, PVNC's work began to improve. In Vung Ang, after participating in the construction of the Vung Ang Thermal Power Plant project invested by PVN, PVNC requested 1.2 hectares of land and completed the construction of a concrete mixing station system to supply to the Vung Ang economic zone. Previously, the mixing station system was located on the land of the Vung Ang Thermal Power Plant. In 2015, the unit will participate in the construction and supply of concrete for projects in the Vung Ang and Quang Trach economic zones.

On March 28, 2014, with the support of PVC Corporation, PVNC completed the installation of 2 concrete mixing stations with a capacity of 120m3/h in Thai Binh to supply concrete for 2 thermal power plants Thai Binh I of PVN and the plant of Vietnam Electricity Group (EVN). Currently, PVC is calculating and implementing some construction and installation items of the plant. At Nghi Son Refinery and Petrochemical Complex Project, on January 15, 2014, PVC assigned PVNC to invest and install 2 concrete mixing stations to supply concrete for the plant and study some construction and installation items for implementation. The project to renovate Area A of Quang Trung apartment building worth more than 1,000 billion VND has so far completed investment procedures.

In May 2014, the design estimate will be completed. After the Department of Construction issues a license, construction will begin. In 2014 and 2015, phase 1 and phase 2 will be completed, including 2 apartment towers from 15 to 19 floors, 36 townhouses. This is a key project of the province and the city, with high feasibility, so PVNC is determined to build, so that the central area: Big C Trade Center, Petroleum Twin Towers, 34-storey Muong Thanh Hotel and Area A of Quang Trung Apartment Complex 3.5 hectares 12/9 Cinema will form the cultural and economic center of Vinh City.

In March 2014, PVNC leaders went to Laos to research and invest. On January 16, 2014, PVNC and KeoChaleun Company signed a cooperation agreement to contribute capital to invest in the B.Pak Xong Hydropower Plant project in Xayyabury province, Lao People's Democratic Republic. PVNC is the general contractor for the project. The consulting unit is Thang Long Construction & Technical Services Joint Stock Company. This is a good signal for PVNC to expand its market and improve its capacity.

PV: Thank you!

Pearl

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