Petrolimex chairman: "Petrolimex will reform strongly to become large-scale energy group"

"Petrolimex has made changes in both quality and quantity"

Over the past years, Petrolimex has been one of few State-owned economic groups that successfully transformed its business model to become a public company with modern management and effective production and business activities. On the occasion of the New Year, could you please talk about the Group’s successes?

- The Vietnam National Petroleum Group (Petrolimex) completed its equitisation and transformed its business model into a joint stock company in 2011 and officially registered as a public company in 2012. However, following the introduction of Decree No 83/2014/NĐ-CP on petroleum business, in the last three years, with the drastic and centralised direction of the Government, and the flexible management on petroleum policy according to the market mechanism by the Ministry of Industry Trade and related ministries and sectors, together with good governance and effective business operations by the enterprise, the Group has made changes in both quality and quantity in a much more positive way.

The average profit rate in recent years has always reached over 40 per cent/ charter capital, the minimum dividend payment rate of 30 per cent/ year, and the market capitalisation of Petrolimex has increased about five times as compared to the time of equitisation.

In 2016, the Group completed the sale of 8 per cent of shares to foreign strategic partner, JXTG Nippon Oil & Energy Corporation - the No 1 energy group in Japan. That foreign strategic partners join the Group’s Board of Management and contribute practical opinions and actions has helped change Petrolimex’s ideology of management as well as corporate governance in a professional and transparent manner, satisfying international standards.

The year 2017 also marked a new transformation of Petrolimex when the Group was officially listed on the Ho Chi Minh City Stock Exchange (HOSE) under the ticker symbol of PLX and became one of enterprises with largest market capitalisation; and was listed by HOSE in the VN30 Index which includes large enterprises - backbone of the economy. In the two years of 2017 and 2018, Petrolimex was honoured among the "50 best-listed Vietnamese companies” by Forbes; ranked first in terms of revenue on the stock market with a turnover of nearly US$7 billion/ year, making it into the list of “40 most valuable brand names in Việt Nam".

In 2018, the Group completed the restructuring of the whole Group in accordance with the Prime Minister’s Decision 828/QĐ-TTg. Accordingly, besides its major petroleum business, the Group restructured the organisational structure and operating mechanisms and formed six corporations specialising in business lines related to petroleum business activities such as transportation, petrochemical, gas, services, construction and trade. The restructured corporations have basically operated more effectively with profit and growth rate higher than the previous period.

In the next stage of development, how will Petrolimex reform itself to reach a higher level of development?

- Well aware of new changes in the current business environment as well as in the coming time, the Group is reinforcing the organisational structure of the Parent Company, restructuring certain divisions and departments to form the new Risk Management Board and Retail Sales Department to minimise business risks and improve efficiency in increasing profits. Additionally, we will focus on furthering the development of petroleum retail business, improving service quality, developing value-added services at petrol stations (including convenience stores, automobile repair shops, etc.) to bring in other profit sources other than petroleum. This business segment, based on the real-life experience in Japan from the strategic partner JXTG, is expected to help increase profit markedly if well-developed, accounting for about 50 per cent of petrol stations’ profit structure.

In addition, Petrolimex Board of Management is masterminding an overall development strategy for the Group in the new era, the era of digitalisation, automation and the rapid development of science and technology. The strategy will be developed on the basis of consultation from top consulting firms in the world. Furthermore, the divestment plan and reduced State ownership at Petrolimex from 75.87 per cent to 51.01 per cent will create major changes in corporate governance structure and attract more foreign investors, generating resources for Petrolimex to invest into and develop large potential projects with high profitability to increase profits and bring benefits to shareholders.

"We set a target to become an energy group with market cap of tens of billions of US dollar in the next 10 years"

Read more