Vietnam cement giant sees business decline under Bui Hong Minh leadership

State-owned Vietnam National Cement Corporation (Vicem) saw its business results shrink in the 2017-2021 period under the leadership of general director Bui Hong Minh.

Minh, currently Deputy Minister of Construction, is facing disciplinary action for violations committed during the period, when he served as secretary of Vicem's Party Committee, chairman of the state-owned corporation's council of members, and its general director.

In 2017-2021, the corporation’s revenue increased by 1.94% per year on average, but its net profit decreased by 4.22% per year.

In 2021 alone, Vicem posted net revenue of VND27,772 billion ($1.16 billion) and after-tax profit of VND1,173 billion ($49.2 million), respective falls of 0.9% and 16.3% year-on-year.

The corporation attributed its 2021 business results to fierce competition, skyrocketing prices of input materials and fuel, the Covid-19 pandemic, and the trend of demand shifting from bagged cement to bulk.

In 2022, Vicem's profit continued to decrease due to difficulties stemming from the Russia-Ukraine conflict and the complicated and unpredictable market developments.

The firm announced that its 2022 revenue was estimated at more than VND39,450 billion ($1.65 billion), up 17% compared to 2021 but lower than the year target.

Its profit before tax was projected at over VND1,530 billion ($64.16 million), down 10% compared to the plan and down 30.5% year-on-year. These are the lowest levels since Vicem began information disclosure in 2015.

Its total assets as of December 31, 2021 reached VND37,645 billion ($1.58 billion), down 5.9% compared to the beginning of the period, with equity of VND21,995 billion ($922.41 million), up 0.4%; and liabilities of VND15,650 billion ($656.32 million), down 13.6% - the lowest level in the period 2017-2021.

As the domestic cement market is forecast to still face many difficulties in 2023, Vicem has set a target of earning VND40,919 billion ($1.71 billion) in revenue this year, an increase of nearly 4%.

The Party Central Committee’s Inspection Commission on Wednesday stated that Deputy Minister of Construction Bui Hong Minh committed violations "to the point that he should be disciplined”.

Minh's violations harm the reputation of Party organizations and Vietnam's cement industry, the commission concluded after reviewing some denunciations against the former Vicem leader.

The commission held that Minh had violated the principle of democratic centralism, working regulations, and Party members' code of conduct. He also failed to set a good example in leadership and management of production, business and personnel affairs, causing risks of loss of state investment capital.

Minh, 52, was Vicem's general director from September 2017 and chairman of its council of members from August 2019. He was also secretary of the corporation's Party Committee. In June 2021, Minh was appointed Deputy Minister of Construction.