The industrial rubber segment has become the most profitable business for the Vietnam Rubber Group (HoSE: GVR), with revenue doubling year-on-year and contributing 10% of total consolidated revenue. It has now surpassed traditional business lines such as natural rubber and wood processing in pre-tax profit contribution.
GVR currently owns leading subsidiaries in the industrial rubber sector, including VRG Khai Hoan, VRG Sado, Dorufoam, and Ben Thanh Rubber, among others. The group also recorded over VND 2,000 billion in profit from divestments in 2020.
Industrial Rubber Leads Profit Growth
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Despite pandemic-related challenges in 2020, GVR achieved record business results:
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Net revenue: VND 21,116 billion (+7%)
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Net profit after tax: VND 5,076 billion (+32%)
These figures mark the group’s highest performance since 2013.
A significant driver was the industrial rubber segment, which includes rubber-based products such as gloves, foam, footwear soles, and conveyor belts.
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Segment revenue: VND 2,166 billion, double the previous year
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Contribution: Over 10% of GVR’s total revenue
Meanwhile, natural rubber latex sales fell to VND 12,714 billion (60% of total revenue, down from 64% in 2019). The wood processing segment decreased to VND 3,390 billion, while real estate and infrastructure remained flat.
Pre-Tax Profits by Segment
In terms of pre-tax income, industrial rubber generated the highest profit at nearly VND 786 billion, surpassing all other segments.
Real estate and infrastructure also improved thanks to robust results from Nam Tan Uyen, Thong Nhat, Vinaruco, and Binh Long industrial zones.
In contrast, profits from natural rubber fell sharply to VND 735 billion, while wood and energy profits also declined, due to price slumps in early 2020 before recovering later in the year.
Industrial Rubber Subsidiaries Driving Growth
GVR’s industrial rubber network includes:
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VRG Khai Hoan: Medical gloves
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Rubico: Footwear soles
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Geru Star: Sports equipment
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Dorufoam: Đồng Phú-branded mattresses
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Ben Thanh Rubber: Conveyor belts and rubber belts
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VRG Sado: Rubber threads
GVR is also pursuing vertical integration by planning to acquire tire manufacturers under Vinachem, thereby completing its rubber value chain.
VRG Khai Hoan – A Pandemic-Era Success Story
VRG Khai Hoan was one of GVR’s standout performers in 2020 amid the global surge in demand for medical gloves.
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Revenue: VND 1,800 billion
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Pre-tax profit: VND 448 billion
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GVR ownership: 51%
The company is the only Vietnamese medical glove manufacturer certified to export to the U.S. and EU. Operating at full capacity of 210 million gloves per month, it still cannot meet global demand. VRG Khai Hoan has fully booked orders for 2021 and part of 2022, and is planning to build a new factory with capacity exceeding 5 billion gloves per year, double its current production.
Over VND 2,000 Billion Earned from Divestments
A major profit boost also came from GVR’s divestment activities, totaling VND 2,056 billion in 2020, compared with just VND 24 billion in 2019.
The most notable transaction was the sale of 9.34 million shares in Saigon VRG Investment (UPCoM: SIP) at the end of 2020, generating over VND 1,300 billion. GVR still holds 1.4 million SIP shares as stock dividends awaiting settlement.
Additionally, GVR fully divested from eight subsidiaries, including:
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Rubber Construction Investment
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Construction and Investment Consulting
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Ho Nai Industrial Park
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Vietnam Rubber Urban Construction Consultancy
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715C Coffee Co., Ltd.
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Saigon–Hanoi Securities (SHS)
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Saigon–Hanoi Fund Management
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Vietnam Tiger Fund
The group also sold most of its trading securities, including SCJ, KBC, ITA, ACB, and SHB, with a total book value of VND 5.6 billion. Remaining holdings include MB Real Estate and Kim Tu Thap New Industry JSC.