Mr. Pham Nhat Quan Anh (middle) is General Director of VinMetal - Photo: NGUYEN KHANH
Recently, Vingroup Corporation announced that it would lend working capital to Pomina Steel Joint Stock Company with a maximum interest rate of 0% for 2 years, and chose Pomina as a priority supplier for the entire business ecosystem.
Preferential capital will help Pomina improve cash flow, restore supply chains, ensure stable production activities and gradually recover business financial indicators.
Pomina used to be the "king" of the steel industry.
Pomina's predecessor was Pomina Steel Company Limited, established in 1999 with a charter capital of 42 billion VND. In 2008, Pomina was equitized with a charter capital of 500 billion VND, with a market share of 14.02%.
Meanwhile, Hoa Phat Group ranked 5th with a market share of 11.7%, according to the company's own annual report.
Regarding business situation, Pomina's net revenue in 2008 reached 7,230 billion VND. Meanwhile, Nam Kim Steel Joint Stock Company's was 1,428 billion VND. Hoa Phat's was at 8,365 billion VND, construction steel revenue accounted for about 3,931 billion VND.
Net revenue of Pomina, Hoa Phat and Nam Kim - Chart: NGUYEN NGUYEN
How is Pomina now ?
In 2009, Pomina assessed that more than half of domestic companies in the same industry could not control the source of raw materials such as steel billets, and their technology was very old or used, and had been eliminated abroad. Enterprises were confident in having modern factories, with very few direct competitors in this market share.
After that, large steel enterprises all invested in projects to expand their capacity. Pomina said it invested in expanding the 1 million ton steel refining project, 0.5 million ton steel rolling project, and the 3 million ton port project in the 2011-2013 period. The company invested in an additional blast furnace project in the 2019-2020 period.
Hoa Phat has been implementing the Hoa Phat Dung Quat 1 project since 2017, while Dung Quat 2 is expected to be completed and operational by the end of 2025.
But in 2012, the real estate market suddenly froze, purchasing power was weak, Pomina's profit suddenly dropped from 406 billion VND in 2011 to nearly 5 billion VND. Financial costs increased due to long-term debt from investing in Pomina 3 factory. In 2013, the company lost 220 billion VND.
In 2019, the company continued to lose 319 billion VND due to an incident at the Pomina 2 factory that stopped production for 8 months. The blast furnace project became the biggest bottleneck when the company borrowed money to invest, but progress was slow, and interest expenses eroded profits.
Pomina business results - Chart: NGUYEN NGUYEN
In the period 2022-2024, Pomina will lose nearly 1,000 billion VND per year. Revenue in the first 9 months of 2025 is 1,694 billion VND, up 7% compared to 2024. Loss after tax is 512 billion VND.
As of September 30, the company had VND1,730 billion in short-term assets and only VND22 billion in cash. Short-term debt was VND5,508 billion, of which VND5,238 billion was short-term loans and financial leasing debt. By the end of the third quarter, accumulated losses were nearly VND3,051 billion. Owner's equity was negative nearly VND187 billion.
Pomina's short-term debt and short-term assets (unit: billion VND) - Source: WICHART
Pomina had many plans to restructure and improve its financial health. In 2023, the company signed a memorandum of understanding with Nansei Company (Japan) on transferring 51% of its shares but failed. After that, Pomina cooperated with THACO Industries but was also unsuccessful.
VinMetal's tactical move
Recently, Ho Chi Minh City Securities (HSC) mentioned the possibility of acquiring Pomina by VinMetal Production and Trading Joint Stock Company (Vingroup).
Pomina currently has a construction steel rolling mill (designed capacity of 1.5 million tons/year) and a blast furnace (1 million tons/year). However, this blast furnace project had to stop operating for a long time due to financial pressure and limited expertise.
Last year, THACO tried to restore the blast furnace's operations through liquidity support but failed. If VinMetal successfully acquires Pomina and restores its production facilities, it will quickly gain a foothold in the market. The output of 1.5 million tons is equivalent to 10-11% of the total expected annual market demand (about 13 million tons).
However, according to HSC, Vingroup will need to comprehensively restructure Pomina and upgrade production facilities to meet the targets of producing green steel, steel for automobile production and steel for railways.
Previously on October 6, Vingroup announced the establishment of VinMetal to enter the metallurgical industry. This company will supply material needs for Vingroup's real estate, electric vehicle manufacturing, and industrial, energy, and transportation projects.
Source: https://tuoitre.vn/vingroup-ap-u-gi-khi-lap-vinmetal-cho-pomina-vay-von-0-2025112710210586.htm
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