VICEM Hoàng Mai Wins Major Cement Supply Contracts with Low Savings Rate
VICEM Hoàng Mai consistently secures large-scale contracts worth hundreds of billions of Vietnamese dong for supplying cement for new rural construction in Nghệ An, Vietnam, yet the savings for the state budget remain minimal.
VICEM Hoàng Mai, a leading cement company in Vietnam, has been successful in securing several high-value tenders for the supply of cement for new rural construction (NTM) projects in Nghệ An province. Despite the substantial contract values, the savings achieved for the state budget have been consistently low.
Over the past three years, the Nghệ An Provincial Finance Department has allocated thousands of billions of Vietnamese dong from the state budget to purchase cement for local NTM programs. During this period, VICEM Hoàng Mai has been a frequent winner in these tenders, often with minimal competition.
In 11 tenders initiated by the Nghệ An Provincial Finance Department, VICEM Hoàng Mai won 10, with a total value exceeding 419 billion Vietnamese dong. Notably, the winning bid prices were extremely close to the estimated costs, with a savings rate of just 0.005% in some cases.
In early 2024, the Nghệ An Provincial Finance Department continued this trend by inviting tenders for a package worth over 46 billion Vietnamese dong. VICEM Hoàng Mai, as the sole bidder, matched the estimated price, resulting in zero savings for the state budget.
The company's dominance in these tenders is evident, with a history of participating in 14 tenders, winning 12, and losing only one, with one result still pending. The total value of these won tenders amounts to over 595 billion Vietnamese dong.
Despite these successes, VICEM Hoàng Mai reported a significant drop in profits in the third quarter of 2023. The company's total assets remained stable at around 1,500 billion Vietnamese dong, but its revenue decreased by over 5% compared to the same period in 2022. The pre-tax profit for the third quarter was a loss of over 26.7 billion Vietnamese dong, a stark contrast to the 5 billion Vietnamese dong profit in the same period of 2022.
This report raises questions about the competitive nature of the tender process and the efficiency of state budget spending in these large-scale infrastructure projects.
