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PVFCCo invests in storage system to maintain active role



( Ca Mau Fertilizer Plant and Ninh Binh Fertilizer Plant will be operational in2012. The Investment Newspaper reporter talks with Mr. Cao Hoai Duong, President & CEO of PetroVietnam Fertilizer and Chemicals Joint Stock Company (PVFCCo) about the action plan when PVFCCo undertakes distribution of Ca Mau urea products in addition to Phu My’s.

Could you please tell us the reasonsfor PVFCCo to boost investments in the storage system in 2011?

Phu MyFertilizer Plant maintains continuous production throughout the year but the fertilizer market is seasonal. As such, the good storage system will help maintain the active role in supplying seasonal products, such as fertilizers.

With the storage system throughout Vietnam, we will actively keep products in storage ahead of the crop time to help reduce inventories at production sites. When the crop season arrives, fertilizers from depots will promptly be distributed to farmers for their crop. It is the key factor for our success in fertilizer business. Therefore PVFCCo places very clear targetin building infrastructure facilities for fertilizer business with storages and river ports.

How is the performance progress of this target?

The construction of depot system has been deployed with concentration from 2010 and intensified in2011. Our goal is to complete the depot system in 2013 (initially expected in 2015). The capacity of warehouses built by PVFCCo has currently reached 220,000 tons in the plan to stockpile 300,000 tons fertilizer per year.

PVFCCo’smotto is to make full use of social investment. We will hire if any location has a good warehouse system and available for long term lease. Alternatively, PVFCCo will invite its partners to get engaged in construction or PVFCCo will construct by itself.

This year, PVFCCo will distribute additional products from Ca Mau Fertilizer Plant. Does it place any overload burden on PVFCCo’s operation?

Implementing the task assigned by Petrovietnam, PVFCCo will further distribute 560,000 tons of Ca Mau  urea in 2012 and this volume will gradually be increased to include all 800,000 tons from Ca Mau Fertilizer Plant along the existing 800,000 tons from ofPhu My Plant. For Ca Mau urea, the plant is located at the shallow river port, the average handling of 2,100 tons per day poses a major challenge to PVFCCo’s transport.

Double sale volume and double revenues require PVFCCo’s human resources and distribution system to undertake appropriate adaption to manage large quantity of fertilizers, especially how to deliver fertilizers to farmers in time for the crop. PVFCCo has been well aware of these problems to propose appropriate solutions.

New operational domestic urea plants will cause supply in excess of demand. How did PVFCCo prepare for the export market?

In 2011, PVFCCo explored the Cambodian market with activities of sample presentation. A field improved with  Phu My Urea gives 7.8 tons of rice per ha as compared with the normal yield of only 4 tons per ha.

The export plan toMyanmar has also been explored. Due to the embargo towards this country, trading with Myanmar must be in the form of barter trade. As such, PVFCCo currently proceeds with product registration, quality registration, product promotion and prepares necessary conditions for business once the embargo is lifted.

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