(PetroTimes) – In a conversation with a PetroTimes reporter, Mr. Hoang Trong Dung – Chairman of the Board of Directors of PetroVietnam Fertilizer and Chemicals Corporation (PVFCCo) – shared: 2021 has promptly identified advantages – difficulties, opportunities – challenges, strengths – weaknesses so that there are solutions to change and adapt flexibly…
Mr. Hoang Trong Dung – Chairman of PVFCCo's Board of Dire
PetroTimes: How would you rate PVFCCo's the production and business results in 2021 in a volatile year for the fertilizer market due to the impact of the Covid-19 pandemic?
PVFCCo: Continue to innovate for sustainable development.
Mr. Hoang Trong Dung – Chairman of PVFCCo's Board of Directors
Mr. Hoang Trong Dung: 2021 is a particularly volatile year in the world fertilizer market and Vietnam in particular. The disruption of the supply chain, the increase in production and transportation costs of fertilizers, the scarcity of supply while the increased demand led to a sudden rise in world fertilizer prices, typically FOB urea prices from about $250/ton by the end of 2020, it has sometimes increased to 1,000 USD/ton.
The sharp increase in world fertilizer prices led to domestic fertilizer prices, positively affecting PVFCCo's revenue and profit. However, PVFCCo must plan a script, have excellent preparation for epidemic prevention and control before the severe outbreak of the Covid-19 epidemic, and prepare a "3-on-the-spot" workforce to ensure safety. in the production area, providing the working force at the distribution units… Therefore, Phu My Fertilizer Plant has successfully performed general periodical maintenance, safe and continuous production, and achieved maximum capacity; raw materials and energy consumption is also better than before.
Another advantage, or rather a strong point, is that PVFCCo's distribution and warehousing system covers all parts of the country, along with the efforts of the whole system, so the delivery of goods to the place of consumption is not interrupted during the Covid-19 pandemic. In addition, the brand reputation of Phu My Fertilizer and making good use of market opportunities also bring advantages in product consumption.
Looking back, the essential factor that helps PVFCCo achieve business results in 2021 far beyond the original plan is the good preparation and extraordinary efforts of employees, especially the "3 on-site" team. Many months of sticking around and dedicating to PVFCCo.
However, besides the successes, PVFCCo still faces difficulties, challenges, and some limitations that need to be further overcome in the coming time.
PetroTimes: In your opinion, what are PVFCCo's lessons learned in governance to overcome difficulties in 2021?
Mr. Hoang Trong Dung: First of all, it should be emphasized that, at PVFCCo, the correct assessment of the situation to overcome difficulties and challenges is not only implemented in 2021, but PVFCCo has a whole process of analysis and evaluation from many years ago.
In recent years, PVFCCo faced the biggest challenge in the gas source; cheap gas price is no longer available, leading to an increase in input cost of production. PVFCCo's management said that Phu My Fertilizer Plant had entered the "old" stage after 18 years of operation, and machinery, equipment, and systems need to be replaced to operate safely and stable.
However, PVFCCo also has advantages and opportunities. It is experienced human resources, an effective management system, good facilities, and assets that can be promoted and utilized. PVFCCo's ability to expand its business and service markets is still relatively large. PVFCCo has an operating area spread across the country, has a long history of investing in researching new products and services, especially in agriculture and chemicals, has timely access to digital transformation…
Therefore, in my opinion, the highlight of PVFCCo's governance is that in the specific context of 2021, PVFCCo has timely and accurately identified advantages and disadvantages, opportunities and challenges, strengths, and weaknesses. With this in mind, PVFCCo Party Committee continues to lead the whole PVFCCo in managing changes, adapting flexibly and safely in new situations, and implementing the motto "Innovation" for sustainable development."
PetroTimes: The high fertilizer price is PVFCCo's opportunity, but behind it is enormous challenges. For example, farmers' tendency to use fertilizers has shifted from inorganic to organic fertilizers, now that shift is and will increase in the face of price pressure to reduce production costs. What do you think about this and the direction and solution for PVFCCo to develop sustainably in the future?
Mr. Hoang Trong Dung: PVFCCo recognizes the difficulties related to objective fluctuations, which are energy transition, competitive market, green economy, several manufacturers outside the region are converting models. Therefore, products have better prices, more competition… All of these factors will affect the fertilizer market.
To survive and develop sustainably in that context, PVFCCo is updating its Development Strategy to 2030, with a vision to 2035. Accordingly, we orient PVFCCo's development along 3 main "product axes": fertilizer, the chain of fertilizer/agricultural, and chemical-related products/services. We cooperate with the consulting unit and plan to soon submit this development strategy to the Vietnam Oil and Gas Group (Petrovietnam) and the General Meeting of Shareholders in the annual meeting in 2022.
In addition, PVFCCo has also completed a project to establish an applied research center. Hopefully, PVFCCo will have an applied research center to research new products using new technologies in production and business…
PetroTimes: The problem of restructuring has been and is being posed by businesses as a fundamental solution to develop sustainably in a period of many difficulties and intertwined like today. Can you tell us how the restructuring was set out and implemented at PVFCCo?
Mr. Hoang Trong Dung: Based on identifying difficulties in the coming period, PVFCCo has solutions in adjusting activities related to corporate governance, such as strengthening decentralization, decentralization, supervision, and control to increase competitiveness, reduce costs, improve labor productivity, create initiatives for subsidiaries, as well as manage and control capital investment. In addition, PVFCCo also determined that, in the coming years, because some advantages no longer exist, building a competitive strategy and expanding breakthrough products is also an urgent requirement for PVFCCo.
Over the past time, PVFCCo has closely followed the restructuring plan approved by Petrovietnam for implementation and has obtained initial results, such as arrangement, adjustment, transfer of functions, tasks, and personnel of the departments, office/unit; moved the working locations of 2 departments/divisions of the corporation's agencies from Ho Chi Minh City to Phu My Fertilizer Factory to suit functions and tasks…
PVFCCo is reviewing and improving salary policy, planning to restructure, divesting capital in regional companies, renewing business models…
PetroTimes: Soon, how will PVFCCo's culture change to suit the new situation, and what to do to make PVFCCo's culture come into practice in PVFCCo's operations, sir?
Mr. Hoang Trong Dung: Over 18 years of development, PVFCCo's culture has been cultivated over many periods, with interference and influence of social and cultural outside, of Vietnam's agricultural and rural culture and especially the Petroleum – the "Fire-seeker" culture. Therefore, PVFCCo formed a cultural foundation and thrived from 2010-to 2011. Since then, the value systems, vision, and mission have been firmly maintained and developed, especially the core value system "Professional – Efficiency, Dynamic – Creative, Responsibility – Sharing, Aspiration – Reaching out." Although the operation process has had ups and downs, PVFCCo has overcome all obstacles by maintaining and promoting the corporate cultural value system.
In the past year, PVFCCo also implemented much content such as safety culture, 5S model…, especially sharing culture with many meaningful social security programs.
In the coming time, PVFCCo will continue to review and improve the achievements that PVFCCo's culture has achieved in the past time, and at the same time, deepen and clarify its cultural identity; review and update the core value system to suit the new situation and the process of adjusting the development strategy of PVFCCo; promote culture building, especially a culture of behavior, a culture of working in a digital transformation environment, a culture of greater responsibility and autonomy.
In my opinion, the culture of each individual, especially those at the top, from senior management to middle management, has an essential meaning in building corporate culture. They must be exemplary, conscientious, and wise. "Mind" is the consciousness in work, the pure mind in all activities, the mind for the common goal of the collective. Having the "mind" to update new knowledge, new management and administration methods, and improving professional capacity, management, and administration capacity…
In 2022, PVFCCo will focus all resources to both effectively implement political tasks and bring corporate culture into reality, even more, bringing high efficiency in production and business activities. Helping PVFCCo continue to develop stably and sustainably.
PetroTimes: Thank you for sharing!