Vinafood 2, from continuous losses to billion-dollar profits

Vinafood 2 will be handed over from the State Capital Management Committee back to the Ministry of Agriculture and Rural Development . This giant has stopped the loss and has been operating profitably since 2022. In 2024, Vinafood 2 has achieved and exceeded many production and business plan targets...

Five corporations and general companies arranged by the State Capital Management Committee at Enterprises will be handed over to the Ministry of Agriculture and Rural Development, including: Vietnam Rubber Industry Group (VRG), Southern Food Corporation (Vinafood 2), Northern Food Corporation (Vinafood 1), Vietnam Forestry Corporation (Vinafor) and Vietnam Coffee Corporation (Vinacafe).

How was the business situation of these 5 enterprises before they were assigned to the specialized Ministry for management? Dan Viet would like to "name" each enterprise.

Lesson 4: Vinafood 2 plans to make hundreds of billions in profit for 2 consecutive years

Southern Food Corporation (Vinafood 2 - Code: VSF) sets a revenue target of VND 17,695 billion and a profit of VND 106.9 billion in 2025, a slight increase compared to the 2024 plan, of which the parent company's profit is VND 5 billion.

Vinafood 2 achieved and exceeded many production and business plan targets in 2024

Mr. Tran Tan Duc - Member of the Board of Directors, General Director of Vinafood 2 said: Although in 2024, the world economic situation continues to have many potential risks, inflation in some major economies remains high, global trade growth is affected by geopolitical competition with tense and unpredictable developments, thereby destabilizing the global economy. In the country, the socio-economic situation still has many major challenges; natural disasters, climate change are increasingly complicated... thereby affecting the production and business activities of the Corporation. However, the Corporation has resolutely implemented and completed production and business targets.

Regarding production and business, although the Mekong Delta faced many unfavorable conditions such as drought and saltwater intrusion in the 2023-2024 Winter-Spring crop, heavy rains and storms at the end of the Summer-Autumn crop and the beginning of the Autumn-Winter crop, the entire Corporation still achieved good results when productivity and output increased compared to 2023.

The estimated rice planting area in 2024 is 3.8 million hectares, with a yield of 6.3 tons/ha, and an estimated output of 24.134 million tons, an increase of 11.16 thousand tons compared to 2023. The total volume of rice exported from Vietnam in the first 11 months of 2024 reached nearly 8.5 million tons, worth 5.31 billion USD, an increase of 10.6% in volume and 22.4% in value compared to the same period in 2023.

The Philippines is Vietnam's largest rice consumer market with a market share of 46.1%, followed by Indonesia and Malaysia with market shares of 13.5% and 8.2%, respectively. Compared to the same period last year, the value of rice exports to the Philippines increased by 59.1%, to the Indonesia market by 20.2%, and to the Malaysia market by 2.2 times.

According to the latest report of the US Department of Agriculture (USDA), global rice output in the 2023-2024 crop year will reach 522.2 million tons, an increase of nearly 1.24%, equivalent to an increase of 6.4 million tons compared to 2022-2023. Of which, China will produce 144.62 million tons, India will produce 134 million tons, Bangladesh will produce 37 million tons, and Indonesia will produce 33 million tons.

Global rice consumption is forecast at 523.2 million tonnes, up 2.9 million tonnes from 2023. Global rice trade in 2024 is forecast at 57 million tonnes, up 3.7 million tonnes from 2023. Global stocks are forecast at 179.3 million tonnes, up 100,000 tonnes from 2023, with India accounting for the majority of the increase in global stocks in 2023-2024.

In particular, major rice exporting countries such as India have lifted rice export restrictions since the end of September 2024, with an expected export volume of 18 million tons in 2024; Thailand is expected to export 9 million tons; Vietnam's exports will also reach 9 million tons in 2024. Vietnam's rice exports in 2024 set a new record in both volume and value, with about 9 million tons, bringing in 5.7 billion USD. The average export price of rice also reached an all-time high, at over 600 USD/ton... Regarding imports, the Philippines is the world's largest rice importer with an expected volume of 4.7 million tons, the EU 2.1 million tons, Nigeria 2 million tons, China 1.5 million tons...

In that context and situation, based on the positive results achieved since the beginning of the year, the Party Committee Standing Committee, the Board of Directors, and the General Directorate of Vinafood 2 promptly issued decisions on all activities to effectively implement the resolution of the 2024 Annual General Meeting of Shareholders approving the 2024 production and business plan.

Accordingly, the targets for the main purchased items (estimated implementation) in 2024 include the output of purchased rice of 1,258,419 tons, reaching 134.45% of the plan; purchased wheat of 20,784 tons, reaching 109.39% of the plan; purchased raw anchovies of 1,149 tons, reaching 127.67% of the plan; purchased plastic granules of 1,150 tons, reaching 85.82% of the plan; purchased gasoline of 27.656 million liters, reaching 109.75% of the plan; purchased Honda cars of 6,493 units, reaching 101.45% of the plan...

Regarding the targets for main products sold (estimated to be achieved) in 2024, such as rice output sold 1,222,055 tons, reaching 130.56% of the plan; wheat flour sold 16,606 tons, reaching 97.68% of the plan; finished anchovies sold 249 tons, reaching 110.67% of the plan; processed foods sold 14,690 tons, reaching 96.64% of the plan; packaging sold 11,156 million units, reaching 91.44% of the plan; mineral water sold 14.074 million liters, reaching 90.80% of the plan; gasoline sold 26.739 million liters, reaching 106.11% of the plan; Honda cars sold 6,528 units, reaching 102% of the plan.

Other indicators such as export turnover, total revenue, pre-tax profit, and payment to the state budget all exceeded the plan. In particular, the import-export turnover and total revenue indicators had a large growth, reaching 135.18% and 120.25% of the plan, respectively.

According to Deputy General Director of Vinafood 2 Bach Ngoc Van, the targets were all achieved and exceeded compared to the plan due to both objective and subjective reasons. The Indonesian and Malaysian markets (major customers of the Corporation) increased import demand; India opened its rice export market at the end of the third quarter of 2024... In addition, after restructuring, in 2024, most of the dependent units and joint stock companies operated stably and effectively, contributing to the Corporation completing the profit targets assigned by the owner and the General Meeting of Shareholders.

Set revenue target for 2025 at nearly 17,700 billion VND, profit of over 100 billion VND

Once the largest rice producer in the country, Vinafood 2 had a long time to face the violations of its former leaders, and the company's business results were continuously at a loss for many years in the period 2013 - 2021. The company's leaders themselves also said that before 2022, the company's production and business activities were at a loss, its finances were unhealthy, credit institutions "turned their backs" and lost trust in customers.

The past 3 years, from 2022 to present, have been a time of many changes for Vinafood 2. The Corporation has returned to profit and maintained its annual growth momentum. However, the recovery process is still long as the financial report recorded that Vinafood 2's accumulated loss by the end of the third quarter of 2024 was still more than VND 2,790 billion. This is the result of a series of 10 consecutive years of losses from 2013-2022, including a record loss of nearly VND 1,500 billion in 2018.

Based on the results achieved in 2024, Vinafood 2 has set a number of targets for 2025. Specifically, the volume of purchased rice is 985,000 tons, an increase of 5.24% compared to the 2024 plan; The volume of sold rice is 985,000 tons (743,000 tons for export, 242,000 tons for domestic use), an increase of 5.24% compared to the 2024 plan. Export turnover is 449.785 million USD, an increase of 4.96% compared to the 2024 plan.

The revenue target is 17,695 billion VND and the Corporation's profit is 106,930 billion VND in 2025, a slight increase compared to the 2024 plan, in which the parent company's profit is 5 billion VND.

Mr. Tran Tan Duc said: Based on the positive results achieved in 2024, based on analysis of practical conditions, and the high determination of the Party Committee, Board of Directors, and Board of General Directors, Vinafood 2 will strive to achieve the above-mentioned key economic targets.

Deputy General Director Bach Ngoc Van emphasized: Up to now, Vinafood 2 has regained its leading position in the rice business industry nationwide, regaining the trust of banks as well as domestic and international customers...

Vinafood 2 leaders emphasized that the production and business tasks in 2025 are very important for Vinafood 2 to gradually reduce accumulated losses. Vinafood 2 will continue to maintain trade relations with traditional customers; strengthen trade promotion activities, expand customer relationships, implement flexible sales policies to develop new markets and new customers;

Continue to strengthen forecasting work, closely monitor market developments, fluctuations in exchange rates and interest rates, and update policy changes in rice exporting and importing countries;

Continue to closely monitor the rice harvest situation in 2025, paying attention to balancing prices, inventory and rice prices to balance the average inventory price to reach the expected target and prepare goods for purchase and sale in the new period.

In particular, Vinafood 2 continues to implement and promote the centralized management model of finance, business, investment and asset exploitation management to promote the resources of the entire Corporation.

Vinafood 2 also needs to improve its personnel, management and reorganize its apparatus when returning to the Ministry of Agriculture and Rural Development to arrange and use appropriate labor. Next, it is necessary to focus on implementing the approved Corporation Restructuring Project for the period 2021-2025; contributing to improving management efficiency, minimizing risks and losses that may occur.

Southern Food Corporation (Vinafood 2, UPCoM: VSF), formerly Southern Rice Corporation, was established in 1976 under Decision No. 130/LTTP of the Ministry of Food and Foodstuffs.

In 2018, Vinafood 2 shares were traded on the UPCoM market. Main business lines include: Purchasing, preserving, processing, wholesaling, retailing, reserving, circulating food, processed food, agricultural products; Exporting and importing food and agricultural products.

Vinafood 2's charter capital as of March 30, 2024 was recorded at VND 5,000 billion, of which the State's capital contribution was 51.43%, T&T Group Corporation contributed 25%, and the remaining 23.57% were from other shareholders. The current Chairman of the Board of Directors of Vinafood 2 is Mr. Nguyen Huy Hung.

It is known that in March 2018, T&T Group Joint Stock Company of Mr. Hien spent more than 1,200 billion VND on Vinafood 2 to revive the business activities of this Corporation. However, the reality shows that Vinafood 2 still suffered heavy losses in the period of 2018 - 2021.

According to Plan 141/KH-BCĐTKNQ18 of the Steering Committee for the Summary of Resolution 18/2017/NQ-TW, 19 State-owned corporations and groups under the State Capital Management Committee (Super Committee) will be re-arranged into specialized ministries.

The Ministry of Agriculture and Rural Development (MARD) manages 5 enterprises: Southern Food Corporation (Vinafood2), Northern Food Corporation (Vinafood1), Vietnam Forestry Corporation (Vinafor), Vietnam Rubber Group, Vietnam Coffee Corporation (Vinacafe).

Source: https://danviet.vn/suc-khoe-5-tap-doan-tong-cong-ty-nong-nghiep-truoc-khi-ve-lai-bo-vinafood-2-tu-lo-trien-mien-den-lai-tien-ty-20250103122127706.htm