VIETNAM FERTILIZER INDUSTRY REPORT Q3/2018...Fertilizer market continues to oversupply, estimated supply of nutrition by fertilizer ingredients increased to 3.4% while demand increased

VIETNAM FERTILIZER INDUSTRY REPORT Q3/2018

Executive summary 4

1. Business environment 6

1.1 Macroeconomic situation 6

1.2 Legal framework 10

2. Industry overview 18

2.1 Situation of fertilizer industry in the world 18

2.1.1 Supply demand 19

2.2 Vietnam fertilizer industry situation 20

2.2.1 History of Vietnam fertilizer industry 20

2.2.2 Definition and Classification 22

2.2.3 Scale and Characteristics of market 25

Content

2.2.4 Main activities 26

2.2.5 Supply demand 28

2.2.6 Import export 35

2.2.7 Price movement 42

2.3 Industry planning 44

3. Enterprise analysis 48

3.1 Top 10 enterprises 48

3.2 Target group of business results 58

3.3 Target group of finance 64

3.4 Target group of cash flow 69

2

3

ADB Asia Development Bank

EVN Vietnam Electricity

FAO Food and Agriculture Organization

FAV Fertilizer Association Vietnam

FDI Foreign Direct Investment

FIA Foreign Investment Agency

GDVC General Department of Vietnam Custom

Abbreviation

GSO General Statistics Office

MOT Ministry of Transport

MARD Ministry of Agriculture and Rural Development

VinacominVietnam National Coal and Mineral Industries Holding

Corporation Limited

UN comtrade United Nations Database of Trade Statistics

VIRAC Vietnam Industry Research and Consultancy

Fertilizer market continues to oversupply,

estimated supply of nutrition by fertilizer

ingredients increased to 3.4% while demand

increased slightly by 0.6%

Asia and the Americas are the largest

fertilizer consuming regions in the world,

Fertilizer prices tend to rise again due to high

demand while supply is scarce and the impact

of raw material costs and transportation (due

to rising oil, gas and coal prices).

Average supply exceeds the demand.

Vietnam fertilizer production has focused on

the single and mixed market for NPK and

DAP

Fertilizer consumption tends to decrease over

the years

Fertilizer imports have fluctuated

continuously over the years

Asian countries continue to be the main

export markets of Vietnam.

Executive summary

4

Content is intentionally removed for demo purpose

Executive summary

5

Fertilizers are in a saturated state, domestic

firms have to compete fiercely with imports,

while demand tends to fall, leading to

downward pressure in the 2016-2020 period.

In particular, Cambodia continues to be the main

export market,

Fertilizer inventories tend to increase over the

years, but the growth rate has been decreasing.


1. Business environment

1.1 Macroeconomic situation

1.2 Legal framework

Content

6

7



Monthly CPI fluctuation, 2014 – 6/2018

Source: VIRAC, GSO

Source: VIRAC, GSO

GDP growth, 2012 – 6M/2018• GDP in the first 6 months of 2018 is estimated to increase 7.08% over the

same period last year, the highest increase of 6 months since 2011.


8



Source: VIRAC

Source: VIRAC, SBV

VND/CNY exchange rate, 2016 - 6/2018

VND/USD exchange rate, 3/2015 - 6/2018




9

Source: VIRAC, GDVC

USD million

Source: VIRAC, GDVC

Export- Import by quarter, Q1/2015 – Q2/2018

Structure of export commodities, 6M/2018




1.2 Legal framework

Content

10

• Circular No. 36/2010/TT-BNNPTNT

• Decree No. 163/2013/ND-CP


1.2 Legal framework - Group of regulations on production, trading and use of fertilizers

11


• Decree No. 202/2013/ND-CP



12




13



1.2 Legal framework - Group of regulations on taxes of fertilizer import and export

14




15




16


• On June 2, 2018, the Ministry of Finance said that in the draft law to amend and supplement some articles of the 6 Laws on tax, fertilizer will be

subject to VAT at the preferential tax rate of 5%.



17

Content

2. Industry overview

2.1 Situation of fertilizer industry in the world

2.2 Vietnam fertilizer industry situation

2.3 Industry planning

18


2.1 World fertilizer market – 2.1.1 Fertilizer supply-demand

19

Demand by nutrient and nutrient supply, 2015 – 2017e

Source: VIRAC, FAO

Million tons


Content





20


2.2 Vietnam Fertilizer Industry – 2.2.1 History of Industry Development

21


Classified according to the nutrient

requirements of plants

Classified according to source


2.2 Vietnam Fertilizer Industry – 2.2.2 Definition and Specification

22

Structure of major fertilizers 2014


Name of fertilizer Chemical composition Characteristic Type of suitable land



23


Name of fertilizer Chemical composition Characteristic Type of suitable land



24



2.2 Vietnam Fertilizer industry– 2.2.3 Scale and characteristic of market

25

Fertilizer industry revenue, 2010 - 2016

VND billion

Source: VIRAC, GSO Source: VIRAC, GSO

Share by revenue, 2016



2.2 Vietnam Fertilizer industry– 2.2.4 Main activities

26



2.2 Vietnam Fertilizer industry– 2.2.4 Main activities

27



2.2 Vietnam Fertilizer Market – 2.2.5 Supply demand

28

Million tonsSupply - Demand, 2012 – 6M/2018e

Production and consumption of domestic producers,

2012 – 6M/2018e

Source: VIRAC, GSO, MARD, GDVC

Source: VIRAC, GSO, MARD, GDVC

Million tons




29

Fertilizer production, 2012 – 6M/2018e

Source: VIRAC, GSO

Million tons




30

The impact of tax policies on domestic production


31


• On June 2, 2018, the Ministry of Finance said that in the draft law to amend and supplement some articles of the 6 Laws on tax, fertilizer will be subject

to VAT at the preferential tax rate of 5%.





Source: VIRAC

32

Fertilizer production capacity of big domestic enterprises, 6/2018




33

Source: VIRAC

Factory Capacity




34

Million tons

Source: VIRAC, GSO, MARD

Demand and consumption of fertilizer, 2012 - 6M/2018e


Source: VIRAC, GDVC, MARD


2.2 Vietnam Fertilizer Market – 2.2.6 Import export

35

Fertilizer imports, 2012 – 6M/2018e

Fertilizer imports have fluctuated continuously over the years as a result of domestic demand - supply and import and export tax policies as well as

major import markets.

Thousand tons




36

Source: VIRAC, MARD, GDVC


Thousand tonsFertilizer imports, 6M/2017 / 6M/2018e

Fertilizer imports by type, 6M/2018e




37


Import structure of fertilizer by countries, 6M/2018




38

Prices of some types of imported fertilizer 6M/2018

Type of fertilizer Average unit price

6M/2018

Unit: USD

Source: GDVC

Structure of importing fertilizer enterprises, 6M/2018

Source: GDVC




39

Million tons

Fertilizer exports, 2012 – 6M/2018e





40

Source: VIRAC, GDVC

Thousand tons

Source: VIRAC, GDVC

Fertilizer exports by country, 6M/2018e Fertilizer exports by country, 6M/2017 - 6M/2018e




41

Temporary import for export by type, 6M/2017

Type of fertilizer Share

Source: VIRAC, GDVC

Source: VIRAC, GDVC

Type of fertilizer Share

Vietnam fertilizer exports by type, 6M/2017

Fertilizer exports by origin, 6M/2018


Ure and DAP prices have been fluctuating much in the first three months of 2018, specifically:

Source: VIRAC, VIETRADE- MOIT


2.2 Vietnam Fertilizer Market – 2.2.7 Price movement

42

* Price movements of main products (highest price) from Tran Xuan Soan market

VND

Price movement, 2014 - 6/2018



2.2 Vietnam Fertilizer Market – 2.2.7 Price movement

43


Content





44

1. Planning the fertilizer production system

Decision No. 6868/QD-BTC approving the master plan for the development of the fertilizer production system and distribution system in the 2011-2020

period, with a view to 2025.



45


2. Planning the fertilizer distribution system

3. Group of support solutions



46




47


3. Enterprise analysis

3.1 Top 10 enterprises

3.2 Target group of business results

3.3 Target group of finance

3.4 Target group of cash flow

Content

48

Enterprise name AddressChartered capital

(VND million)

Total assets

(VND million)

Net revenue

(VND million)

1

2

3

4

5

6

7

8

9

Top 10 businesses with largest revenue in 2017

Source: VIRAC



49


Phu My Fertilizer Plant - PetroVietnam Fertilizer and Chemicals Corporation



50


Binh Dien Fertilizer Joint Stock Company



51

BFC’s fertilizer plants

Source: VIRAC


Ca Mau Petroleum Fertilizer Joint Stock Company



52


Lam Thao Fertilizers and Chemicals Joint Stock Company



53


Ha Bac Nitrogenous Fertilizer & Chemicals Joint Stock Company



54


DAP – VINACHEM Joint Stock Company



55


Quảng Bình Import Export Company



56


Southwest Petrovietnam Fertilizer and

Chemicals CorporationSoutheast Petrovietnam Fertilizer and

Chemicals Corporation

Central Petrovietnam Fertilizer and


North Petrovietnam Fertilizer and


3. Business analysis

3.1 Top 10 businesses

57







Content

58

Source: VIRAC



59

VND billionNet revenue




60




61

Source: VIRAC

VND billion

Gross profit margin, 2016 - 2017


Source: VIRAC



62

Self-financing rate, 2016 - 2017




63

Source: VIRAC

Source: VIRAC

Selling expenses, 2016 - 2017

Administrative expenses, 2016 - 2017







Content

64

Source: VIRAC



65

Fixed asset turnover, 2016 - 2017


Source: VIRAC

Day



66

Producing enterprises Trading enterprises

Days in inventory, 2016 - 2017


Source: VIRAC



67

DayDays of sales outstanding, 2016 - 2017




68

Source: VIRAC

Profit Ratio, 2016 - 2017






3.4 Target group of payment

Content

69


3.4 Target group of payment

70

Source: VIRAC

Index of payment, 2016 - 2017


71

REPORT DISCLAIMER

This document has been prepared in good faith on the basis of information available at the date of publication without any independent verification. VIRAC has

produced this report for private circulation to professional clients only. All information and statistical data herein have been obtained from sources we believe to

be reliable and made to ensure the accuracy of the contents of the pages of the report at the time of preparation. Such information has not been independently

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VIETNAM FERTILIZER INDUSTRY REPORT Q3/2018...Fertilizer market continues to oversupply, estimated supply of nutrition by fertilizer ingredients increased to 3.4% while demand increased