A Sochem chemical plant. — Photo courtesy of sochemvn.com

The Vietnamese chemical industry saw a drastic change in business performance in the third quarter of 2024, as mid-sized players like Southern Basic Chemicals JSC (Sochem) and Việt Trì Chemical JSC (Vitrichem) posted impressive growth while industry giant Đức Giang Chemical Group faced profit constraints.

The divergent trajectories sent shock waves through the market.

This not only underscores the differences in scale, but also highlights the adaptive strategies and market resilience of each entity.

In the third quarter (Q3), Vitrichem reported a revenue surge reaching VNĐ378.4 billion (US$14.9 million), marking a 24.7 per cent increase year-on-year.

The company said its growth was propelled by elevated product prices and strong market acceptance of its new disinfectant, Vi-Chlorine.

With a mere 9.8 per cent rise in cost of goods sold, the company's gross profits soared to VNĐ83 billion, 2.4 times higher than the previous year.

As a result, its profits after tax spiked to VNĐ26.8 billion, a nearly 23-fold increase from the same period last year.

For the first nine months, the company achieved a revenue milestone of VNĐ1.1 trillion, up by 15 per cent. Its profits before and after tax hit VNĐ67.4 billion and VNĐ54.9 billion respectively, meeting 75 per cent of its revenue target and 64 per cent of its profit goal.

Similarly, Sochem showed robust Q3 results, with net revenue hitting VNĐ507.7 billion, a nearly 25 per cent increase year-over-year. Profit after tax surged 54.1 per cent to almost VNĐ78.7 billion, driven by strong sales and favourable prices for key products.

For the first nine months, net revenue totaled over VNĐ1.3 trillion, with profits before and after tax at nearly VNĐ255.1 billion and VNĐ203 billion respectively, up by 16 per cent and 15 per cent from last year.

Consequently, Sochem has achieved 82 per cent of its revenue and 98 per cent of its profit targets for 2024.

In contrast, Đức Giang Chemical witnessed a modest 4 per cent year-over-year revenue growth in Q3, reaching nearly VNĐ2.56 trillion, with a 5 per cent rise in gross profit to VNĐ881.4 billion, resulting in a 34.4 per cent gross margin.

However, financial revenue saw a 26 per cent decline to over VNĐ150.5 billion due to lower deposit interest rates, while financial and sales expenses increased.

The company’s net profit, therefore, decreased by over 7 per cent to nearly VNĐ706 billion, with earning per share ratio (EPS) declining from VNĐ1,884 to VNĐ1,747. The dip was attributed to reduced financial income and escalating sales costs, impacting margins.

For the first nine months of 2024, Đức Giang Chemical saw a slight net revenue increase to VNĐ7.4 trillion, with exports contributing VNĐ3.82 trillion and domestic sales VNĐ3.627 trillion.

Its profit after tax during this period was down by 7 percent to VNĐ2.3 trillion. The company has achieved 73 per cent of its annual revenue target and 74 per cent of its profit goal.

On the stock market, the industry’s stocks traded lower at 14.30pm on Wednesday. In particular, Đức Giang Chemical plunged 0.9 per cent, Sochem dipped 0.66 per cent and Vitrichem fell 0.66 per cent.

Greening the chemical industry

The chemical sector stands as a cornerstone industry, deeply intertwined with various aspects of economic and societal spheres, playing a pivotal role in driving the economy forward.

The shift towards sustainable practices, often termed as greening industries, is gaining momentum as a progressive development trajectory that not only fosters economic advancement but also tackles social challenges and addresses environmental degradation.

Within this paradigm, the chemical and fertiliser domains are actively embracing this transformative trend.

Speaking at a recent seminar on the topic 'Greening Chemical and Fertiliser Production: Effective Competitive Opportunities for Enterprises', Phùng Ngọc Bộ, Head of the Technical Division at Vietnam Chemical Group, has shed light on several hurdles, notably the persistent reliance on fossil-derived raw materials across multiple technologies.

Moreover, the adoption of green technologies and sustainable production methods comes with elevated costs, necessitating a substantial timeframe to align the expenses of eco-friendly products with traditional counterparts.

Bộ said that despite the existence of policies and frameworks, the chemical industry encounters uncertainties in accessing these resources, alongside challenges in securing preferential funding for investments in green technologies and transitioning processes.

Nguyễn Thanh Phương, representing the Industrial Safety Techniques and Environment Agency under the Ministry of Industry and Trade, confirmed that the ministry is poised to reinforce its directives and enact strategies outlined in the Environmental Protection Law.

These initiatives encompass the cultivation of environmental industries, proactive measures against climate change, effective prevention and management of environmental crises, promotion of the circular economy and facilitation of sustainable growth practices. — VNS