A closer look at Vietnam's troubled fertilizer plant as bankruptcy threat looms

By Phuong Vy, Le Hoang November 18, 2016 | 07:12 pm PT

Losses have piled up at the $533 million Ninh Binh plant, with a thousand workers facing an uncertain future.

Ninh Binh fertilizer plant, built and run by state-owned chemical group Vinachem, has been mostly empty and quiet over the past few months.

Despite an investment of more than half a billion dollars, the plant has not been making money, with the future of its 1,000 workers hanging on the line.

The plant, along with four other ineffective projects, could be sold or put through bankruptcy proceedings to protect the state assets, Minister of Industry and Trade Tran Tuan Anh told legislators on November 15. The ministry is reportedly working with the government and will make a decision soon.

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Construction of the plant began in 2008 with a total investment of VND12 trillion ($533 million). The state-owned chemical corporation Vinachem chose a Chinese company as the main contractor.

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The project went into operation in 2012, aiming at providing 560,000 tons of urea fertilizers per year for the entire northern region.

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However, between 2012 and early this year, losses have piled up to VND2 trillion ($88 million), which is attributed to high production costs amid falling prices on the market. Equipment and machinery imported from China break down frequently, requiring huge repair costs.

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In March this year, the plant suspended operations to repair its production lines, causing 400 employees to be out of work. The plant resumed production again in June, but at only 60 percent of the designed capacity. Hundreds or workers have remained jobless.