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History of foundation and development

HISTORY OF FOUNDATION AND DEVELOPMENT OF PETROCHEMICAL AND TEXTILE JOINSTOCK COMPANY (PVTEX).

26th December 2005, The Prime Minister of Social Republic of Viet Nam, Nguyen Tan Dung signed an official document 343/2005/QĐ-TTg about project and development of Vietnam chemical industry until 2010 (forward to 2020)
This document is the basis of co-operation between Vietnam National Oil and Gas Group (PVN) and Vietnam National Textile and Garment Group (Vinatex) with investment in Dinh Vu polyester fiber factory.
14th February 2008, in the headquarters of PVN­-18 Lang Ha street, Ha Noi, shareholder’s meeting was held and came to a decision of foundation of Petrovietnam-Vinatex Dinh Vu (PVTEX)
Shareholder’s structure includes 23 members making a financial contribution, there are 5 founding members among them: PVN (14%), Vinatex(14%), Phong Phu Corporation (5%), PVFC (10%), Vinatexmat (5%). Charter capital is 160.000.000.000 VND (one hundred sixty billion VND) divided into 16 million shares with nominal value of 10.000 VND per share.
Field of business:
·        Construct polyester fiber plant
·        Manage production and trading when factory is completed
·        Produce, trade polyester fiber, chemicals and related services
·        Do business in fields in accordance with laws
Precept of company is getting maximum profit, incessantly promoting interest of shareholders, creating jobs, improving income and spirit of employees, growing stronger and contributing in national budget.
This is the first construction project of polyester fiber plant in Vietnam. The plant is constructed in the land of 15 ha in Dinh Vu industrial zone, Cat Hai, Hai Phong with total investment of 200 million USD. The purpose of this project is to use feed from refinery to produce polyester fiber. Capacity of factory is about 175.000 ton/day (equal to 500 ton/day including 400 ton of PSF, 50 ton of filament and 50 ton of chip) which meets 40% demand of fiber being imported totally by Vietnam national textile and garment group (Vinatex). The effect is to economize foreign currency, stabilize and increase initiative for the feed of Vietnam textile industry and export to neighbor countries.
Commodities of Dinh Vu polyester fiber plant contribute to diversification of products of Vietnam petrochemical industry and development of local economy.
Main product of our factory is PSF (1.2d, 1.3d and 1.4d with the length of 38 mm) and DTY (75d/36f, 75d/96f, 150d/36f, 150/96f) which have specifications and qualities meeting the international standard. We provide many different kinds of products due to the need of purchasers. To improve competitiveness of our products, we concern in product qualities of our commercial competitors, reputation of vendors and licensors as well as qualities of fiber being imported by textile companies all around the world.
In this project, we set up a detailed and clear strategy through which we find the way to approach to potential customers, improve communication with traditional partners and spread our trade name…
22nd March 2008, Comprehensive co-operation agreement between PVN and Vinatex was signed in the field of:
·        Produce materials for textile industry from petrochemical products
·        Construct infrastructure of industrial zone, urban districts, and high quality office buildings.
·        Invest in textile developing projects
·        Co-ordinate/use effectively training campuses of each side in order to provide manpower for development of both groups
·        Consider probability of trading shares to become founding member of subsidiary companies of each side when privatizing enterprises or founding new companies.
·        Co-operate, support and co-ordinate in order to search for partners having financial potential, experience in several aspects in which both groups consider investing.
·        PVN creates good conditions for Vinatex/subsidiary companies to provide products, services for PVN/subsidiary companies in accordance with function and mission of Vinatex.
·        Vinatex creates good conditions for PVN/subsidiary companies to provide products, services for Vinatex/subsidiary companies in accordance with function and mission of PVN.
 
Signing ceremony between PVN and Vinatex
According to an agreement, both sides focus on investment in polyester fiber plant in Dinh Vu, Hai Phong, assure that in 2011, it will be operated in conformity with progress. PVN and Vinatex undertake to use well all resources: financial, human, time…in order to complete efficiently all contents above.
Vietnam National Oil and Gas Group (PVN) nominates Mr Vu Quang Nam – Deputy General Director, Vietnam National Textile and Garment Group (Vinatex) nominates Mr. Tran Quang Nghi­ – Deputy General Director to delegates of two groups who directly supervise completeness of signed contents above, direct the staff set up detailed project, organize it, evaluate the result, effect of the project and inform leaders of both sides. Following an agreement, two groups regularly exchange necessary information about activities and trend of development of each side.
Meeting is held yearly to evaluate implement of co-operation, resolve trouble, add and change contents of agreement, necessary purpose for next period.
At this ceremony, Vietnam National Oil and Gas Group (PVN) and Vietnam National Textile and Garment (Vinatex) Group organized initial public announcement of Petrochemical and Textile Fiber Joint Stock Company (PVTEX JSC.,) managed by Mr Nguyen Minh Dao – President, Mr Le Tien Truong – General Director, Mr Pham Van Tan – Chief Accountant, Ms Le Mai Hoa – Head of Control Department.
 

Mr Bui Xuan Khu – Deputy Minister of Industry and
Trade granted certificates and flowers to company leaders.
28th May 2008, in Ha noi, representative of PVTEX JSC., signed the project consulting contract with EPC industrial engineering GmbH (Germany).
The evaluation of this contract is 8 billion VND and it is the first one which PVTEX JSC., carried out. This is the first step of initiating construction of polyester fiber factory providing feed for textile industry instead of importing materials.
According to this contract, EPC industrial engineering GmbH consults PVTEX JSC., choose technology, investment capital, method and progress of project, assists PVTEX in getting investment permission. This contract lasts for 70 days.
21st August 2008, PVTEX JSC., signed a long-term purchase contract with Vietnam National Textile and Garment Group (Vinatex).
The contract is signed with mass of products as following:
·        PSF 100 000 ton/year
·        Filament 50 000 – 100 000 ton/year
In July and August 2008, PVTEX JSC., signed a feed providing contract with 4 potential contractors:
·        Siam Mitsui PTA Co., Ltd (Thailand)
·        Marubeni Corp (Japan)
·        Misubishi Corp (Japan)
·        Sojitz Corp (Japan)
According to this 3-year contract, PVTEX JSC., and partners alter prices yearly (following ICIS-LOR)
2nd December 2008, extraordinary shareholder’s meeting was held to adjust structure of capital.
Shareholders’meeting put through new capital’s structure as following:
 
Extraordinary shareholders’ meeting of PVTEX JSC 
19th February, Hai Phong people’s committee allocated PVTEX JSC investment and construction certificate of polyester fiber plant.
Polyester fiber plant project is one of the most essential projects of PVN in 2009 and is also the first project in the field of producing polyester from PTA and MEG in Viet Nam with the most modern technology. This project is evaluated as one of 10 highlight events of PVN in 2009.
PVTEX JSC makes plan for the bidding package and signs EPC contract before 15th May 2009, fulfills bidding package, chooses contractor and signs PMC contract in June 2009. Financial consult, construction and installation insurance, register consult contracts must be completed and signed in June – July 2009.
14th May 2009, PVTEX JSC signed EPC contract with Hyundai Engineering Co.,Ltd; LG International Corp; and Petrovietnam Construction Joint Stock Corp.
This is one of the most important and valuable contract including: utilities and offsite, polycondensation, filament, staple-fiber units, infrastructure within battery limit, MEG pipe line from the harbor of Dinh Vu industrial zone.
Contractors take over detailed design, equipment purchase, construction, installation, pre-commissioning, commissioning, handover
Construction contract costs 250 million USD and will be completed in 25 months. According to this contract, contractor will hand over factory to investor in July 2011. Supervising an assignment, Minister of industry and trade Mr Vu Huy Hoang emphasized: polyester fiber factory is constructed in order to assure providing stable and long-term feed for textile and garment industry – one of strategic commodities of Vietnam. Meeting 40% demand of domestic market, Vietnam will reduce importing portion of this product, simultaneously, set up foundation for development of textile and garment industry in the future.
18th May 2009, PVTEX JSC conducted commencement, emulation campaign and signed a loan arrangement agreement of Dinh Vu Polyester fiber plant.
During global economic crisis, reduction of crude oil’s price in the third quarter of 2008 and first quarter of 2009 caused trouble and challenge for PVN in project investment. Although several projects have been ceased or progress was extended, promotion of construction of polyester fiber plant shows determination and right decision of PVN in development strategy until 2015, forward to 2025 as well as feasibility and effect of this project.
Commencement of Dinh Vu polyester fiber plant is the result of tireless efforts of PVTEX staff and positive guidance of PVN over 1 year. Furthermore, this is an important event for PVTEX in the process of construction and growth, simultaneously; continue affirming powerful development of PVN in industrialization and modernization of Viet Nam. Petrovietnam is striving to become key group in order to deserve title “hero of labor” conferred by President of social republic of Viet Nam in the beginning of 2009.
Investment capital of polyester plant is 324,85 million USD. It is the first polyester plant in the north with capacity of 500 ton PSF and Filament per day (equal to 175 000 ton PSF and Filament per year) in construction period of 25 months.
In the next 2 year, Dinh Vu polyester plant will satisfy 40% demand of domestic market and Vinatex will consume 60% of its output.
The size of Dinh Vu polyester plant is the greatest in Viet Nam in producing polyester fiber from PTA and EG – products from petrochemical industry.
Anticipatively, after operation, it creates 600 permanent jobs, gets 200 million USD per year, pay 2 million USD per year for tax, contributes to economic growth, attracts investment and promotes industrialization, modernization of Hai Phong city.
With the title “Glory belongs to punctual person” initiated by petrovietnam labor union, representative of PVTEX and HEC-LGI-PVC signed an affirment on concentrating the best resources to construct plant meeting all requirements about safety, progress, quality and effect, fulfilling seriously and totally all terms of EPC contract, assuring complement and hand over factory to investor in July 2011, implementing urgent solution to prevent economic recession, stabilize economy, ensure social security.
Besides, PVTEX JSC signed loan arrangement agreement with bank for investment and development of Viet Nam (BIDV) and petrovietnam financial joint stock corporation (PVFC) to assure budget, effect and progress of project.
So, along with signing EPC contract and initiating construction, from May 2009, polyester plant project moved to next step – implement project.
In accordance with new situation and policy of rotating cadre of PVN, from 1st July 2009, standing member of petrovietnam party committee and board of directors came to decision of rotating and assigning Mr Nguyen Minh Dao – general director of PVTEX to the head of investment and development department of PVN. 14th July 2009 board of directors nominated Mr Vu Dinh Duy to general director of PVTEX from 15th July 2009.
 
Mr Vu Dinh Duy – General Director of PVTEX
Along with EPC contracts, series of contracts are fulfilled as: PMC, CA, insurance providing service, finance…
The signing ceremony of construction and installation hazard insurance between PVTEX and PVI.
4th August 2009, in the headquarters of petrovietnam insurance joint stock corporation, signing ceremony of construction and installation insurance for Dinh Vu polyester fiber plant was held between PVTEX and PVI.
Following policy of PVN about using service and ability of subsidiary companies as priority, after evaluating ability and experience, PVI was chosen as insurance provider for all construction processes of Dinh Vu polyester plant project. This insurance service assures all construction works until handover as well as related interest of sides participating in project.
10th August 2009, contract of providing credit package of 225 million USD for Dinh Vu polyester plant project was signed between investor – Petrochemical and textile joint stock company (PVTEX) belonging to PVN and bank for investment and development of Vietnam (BIDV) which is in arrangement with co-finance banks and organizations: Ocean bank, Vietinbank, Viet-Rus bank, Military bank, petrovietnam finance joint stock corporation.

Mr Vu Dinh Duy – general director and representatives
of co-finance banks in signing ceremony
In signing ceremony, Mr Phung Dinh Thuc – General Director of PVN; Mr Tran Anh Tuan – General Director of BIDV; leaders of co-finance banks and other companies. According to the contract, PVTEX JSC mortgages assets to co-finance banks to get a loan package for 10 years. Interest rate for the first 2 years is equal to interest rate of USD deposit for 12 months and 2%/year.
Conclusion
With young, educated, active and confident staff, we believe that Dinh Vu polyester plant project will be successful brilliantly, meet all quality standards and contribute to foundation and promotion of new trade name in Vietnam petrochemical and textile, garment industry – PVTEX.
Best regards and co-operation,
PVTEX JSC

 

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