05:01 (GMT +7) - Wednesday 22/08/2018

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Viglacera blossoms post-equitization

Released at: 16:12, 08/06/2018 Vietnam golden dragon awards & Vietnam Excellent Brand Awards

Viglacera blossoms post-equitization

Photo: Viglacera

Corporation hits pre-tax profit of VND1 trillion ($44.4 million) in 2017 for the first time.

by Ngoc Lan

2017 marked the first time in the Viglacera Corporation’s 45-year journey that it recorded pre-tax profit of VND1 trillion ($44.4 million), on total revenue of VND16.486 trillion ($732.7 million), providing proof of its success post-equitization.

Both profit and revenue increased by more than 10 per cent compared to 2016.

Viglacera has mobilized and utilized private sector resources in its equitization. In parallel has been restructuring and a change in its executive organization. Diversified capital mobilization will enhance the corporation’s financial and business capacity, which is a proactive approach and different from the equitization seen at many other State-owned enterprises (SOEs).

Some 96.5 per cent of SOEs have been equitized but only 8 per cent of total State capital has been transferred to the private sector. This makes the process “quantity-approved” but not “quality-approved”. Enterprises still rely heavily on State capital and are unable to mobilize diverse capital sources and improve their financial capacity as well as their production and business capacity.

Success in the four years since equitization has prompted Viglacera to speed up the State capital divestment process and further restructure the company.

In July 2017 it successfully issued 120 million shares (Share code: VGC), raising its charter capital to VND4.27 trillion ($189.7 million). The corporation then raised its charter capital to VND4.483 trillion ($199.2 million) last December and cut its State ownership to 53.97 per cent. This is an important part of preparing for the further divestment of State capital in the 2018-2019 period. This year it is expected to cut State ownership to 36 per cent and then to 0 per cent next year.

In addition to the profound changes in its ownership structure, the determination of Viglacera’s senior executives has opened up a new future for the corporation. Not only a leader in the field of building materials and real estate in Vietnam, it is also reaching out to the world with many international investments, gradually establishing its brand globally.

From 18 small baked-brick factories in 1974, Viglacera is now the leading corporation in Vietnam in the field of building materials production and real estate, with 40 member units and about 10,000 employees. It is also continuing its restructuring to expand its presence in more than 40 regions and territories.

Since 2014, by taking advantage of the recovery of the property market and the development of building materials products, as well as using its strength post-equitization, Viglacera, through specific efforts in capital management, corporate restructuring, and investment allocation, has created breakthroughs in both building materials production and the real estate business.

The transformation of Viglacera began with the sale of 25 per cent of the State’s holding, the withdrawal of capital from some inefficient companies such as the Tay Do Paper JSC, the GoVap Glass JSC, the Viglacera Material JSC, and the Viglacera Dong Trieu JSC, and reductions in ownership at the Viglacera Consulting JSC, the Viglacera Viet Tri JSC, and the Viglacera Thanh Tri JSC.

It also focuses on developing high-tech building materials, such as energy-saving glass, ultra-white glass, autoclaved aerated concrete, and clinker bricks, and invests in industrial zones and real estate, which represent 40-45 per cent of the total value of the corporation and which grow by an average of 10-15 per cent each year.

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