The Vietnam Rubber Industry Journal (CSVN) continues to share key discussions between shareholders and the presidium at the 2020 Annual General Meeting of Shareholders of the Vietnam Rubber Group (VRG).
Competing with Imported MDF Products
Shareholder ID 17913 raised a question about the current competitiveness of Vietnam’s MDF wood processing sector, which faces strong competition from MDF imports from Malaysia and Thailand, while Vietnam has yet to impose anti-dumping duties on these products.
Mr. Pham Van Thanh, Member of the VRG Board of Directors, responded:
Currently, VRG’s MDF subsidiaries have completed and submitted documentation regarding anti-dumping petitions to the Ministry of Industry and Trade (MOIT) for review. However, no official feedback has been received so far.
Imported MDF products from Malaysia and Thailand have created significant competition for domestic producers. VRG’s MDF factories, despite lower profit margins than in previous years, remain profitable and competitive.
For instance, plants that use rubber wood branches and trunks as raw materials—such as Dongwha MDF—reported high profitability in 2019. Meanwhile, factories that rely on other raw materials (e.g., VRG Kien Giang, VRG Quang Tri) face higher input costs, resulting in lower profits. The COVID-19 pandemic also caused an accumulation of MDF inventory earlier in 2020, but stock levels have since declined as production and sales recovered.
VRG remains confident that the MDF wood processing sector will continue to contribute solid profits. However, given that the total national MDF production capacity has already exceeded 2 million m³ per year, VRG does not plan to expand MDF capacity further. The wood industry grows by about 5–7% annually, which also drives MDF demand—but not enough to justify large new investments.
Instead, VRG will focus on diversifying wood product lines to strengthen competitiveness in the domestic market. With existing production capacity, VRG’s MDF factories are fully capable of meeting domestic and export market demand.
Progress on Divestment from Non-Core Investments
Shareholder ID 1313 asked about VRG’s progress in divesting from non-core businesses in 2020, particularly the Saigon–VRG Investment JSC.
Mr. Huynh Van Bao, VRG General Director and Member of the Board, replied:
All of VRG’s non-core investment divestment plans have been approved by relevant authorities. The Group has already divested from several subsidiaries and is continuing with the remaining portfolios.
The Saigon–VRG Investment JSC divestment process has completed valuation and documentation but still faces procedural issues. Once the official valuation certificate is issued, VRG plans to conduct a public auction in July to ensure transparency and efficiency.
Other divestments — such as Investment Consulting JSC, Rubber Mechanical Engineering JSC, and subsidiaries in Dong Nai, Dong Phu, Phu Rieng, Dau Tieng, Binh Long, and Loc Ninh — are being implemented progressively throughout 2020. VRG has also included the expected results and profits from these divestments in its 2020 business plan.