2023 - challenging year for Vietnam's largest tobacco producer

2023 was the most difficult year for Vinataba, the largest tobacco producer in Vietnam, since its inception, with production and business hit by headwinds.

Vinataba's production and business activities continued to be affected by difficulties in the domestic and world economy in the post-pandemic period, inflation and financial crises, and skyrocketing gasoline, electricity and water prices, according to the company.

Smuggled and new-generation cigarettes were widely sold on the market without a solid management policy, causing losses to the state budget and affecting consumers, it said.

The firm posted total estimated revenue of VND30.2 trillion ($1.24 billion) in 2023, exceeding the yearly plan by 10% and soaring 36.3% over the same period last year.

Its profit reached VND1.8 trillion ($74.2 million), 30% higher than the target but slightly down by 3.07% year-on-year.

In the 2017-2023 period, Vinataba recorded a revenue growth rate of 8.89% per year, but profit decreased slightly by an average of 1.12% per year.

Its ROE (return on equity) and ROA (return on assets) indicators during this period also dropped continuously. The indicators reached the highest levels in 2017 at 17.12% and 9.15%, respectively. But in the following years, they gradually declined and hit their lowest in the first half of 2023, at 5.95% and 3.46%, respectively.

Vinataba is a giant in the Vietnamese tobacco market with a domestic share of nearly 64%, according to Vinataba’s data announced on December 15, 2023.

Its predecessor was an alliance of four cigarette factories and others producing tobacco ingredients. Vinataba has developed closed production and business activities including raw materials and cigarette production, and tobacco import-export, trade and services.

Vinataba currently has 11 cigarette production units, three raw materials producers, two units in charge of making auxiliary materials, one for scientific research, and two cigarette joint ventures with foreign partners.