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Vietnam National Tobacco Corporation: basically completed the restructuring scheme

On 14 April 2016, in Ho Chi Minh City, Vietnam National Tobacco Corporation (VINATABA) held an Introduction ceremony of Parent company – Subsidiary company: Saigon Tobacco Limited Company.

Speaking at the ceremony, Mr. Vu Van Cuong – Chairman of the Members Council of Vinataba said, up to now the Corporation has finished over 85% of the restructuring scheme and 100% restructuring of key business fields. The model of cigarette companies after the restructuring as follows: Thanh Hoa Tobacco Company, Da Nang Tobacco Company and Bac Son Tobacco Company have become the subsidiaries of Thang Long Tobacco Company. Saigon Tobacco Company now becomes the parent company of the following subsidiaries: Dong Thap Tobacco Company, An Giang Tobacco Company, Cuu Long Tobacco Company, Ben Tre Tobacco Company and Long An Tobacco Company.

After incorporating the above subsidiaries, the total consolidated asset of the group has reached VND 5,667 billion, an increase of over 11.3%; Total equity is VND 2,790 billion; Total income is VND 7,840 billion, in which, Saigon Tobacco Company occupies 78.9%; The whole contribution to the State Budget reached VND 2,411 billion, in which Saigon Tobacco Company contributed VND 2,078 billion, an equivalent of 86.19%.

 

Ông Vũ Văn Cường - Chủ tịch Hội đồng thành viên TCT Thuốc lá Việt Nam

Mr. Vu Van Cuong - Chairman of the Members Council of Vinataba

Together for a sustainable goal

According to Mr. Nguyen Phuong Dong, Chairman of the Members Council of Saigon Tobacco Company – representative of the parent company asserted that with advantage of each subsidiary’s strength, the merging would further promote the internal capacity to integrate into the overall operation of Saigon Tobacco Company. Mr. Nguyen Phuong Dong emphasized “Such achievements that we have gained in recent years together with the experiences, modern facility, skilled, responsible and passionate staff, I do believe that we can fulfill the given tasks as well as steadily build the Company to become a nationwide leading cigarette manufacturer”.

On behalf of the subsidiaries, Mr. Nguyen Van Hung – Chairman of Members Council of Long An Tobacco Company stated that the recent restructuring scheme has enhanced competiveness and productivity as well as financial capacity to ensure appropriate financial structure for the Group’s sustainable development and to fit in with the Corporate’s restructuring route. This route efficiently maximizes all resources, production capacity, equipment to ensure employment and improve living quality for all employees.

Ông Nguyễn Phương Đông - Chủ tịch Hội đồng thành viên Công ty Thuốc lá Sài Gòn

Mr Nguyen Phuong Đong - Chairman of the Members Council of Saigon Tobacco Company

Restructuring to avoid clashing

Presenting at the ceremony, Ms. Ho Thi Kim Thoa – Deputy Minister of the Ministry of Industry and Trade believed that the restructuring would help cigarette companies to operate more efficiently and bring three following benefits:

Firstly, the restructuring would centralize the market and avoid internal competition. As the result, the Corporate may become stronger to compete with other brands, especially imported products.

Secondly, through restructuring, parent company would directly manage subsidiaries, avoiding the clashing between companies which would weaken the strength of tobacco industry in general and the Corporation in particular.

Thirdly, the restructuring would improve the management of financial flow, since for independent operation, the money was divided into each unit and as the result, there would be no preferential treatment. The arrangement will create a larger cash flow, from which the parent company could easily control the capital flow.

Bà Hồ Thị Kim Thoa - Thứ trưởng Bộ Công thương

Ms. Ho Thi Kim Thoa - Deputy Minister of the Ministry of Industry and Trade

Aiming to eliminate internal competition

Following the Deputy Minister’s direction, Mr. Vu Van Cuong – Chairman of the Members Council of Vinataba confirmed that the whole Group will always unite to promote strength and strictly implement the direction of Deputy Minister Ho Thi Kim Thoa to fulfill the objectives of the Corporation, as well as of Saigon Tobacco Company.

Mr. Vu Van Cuong also emphasized that Saigon Tobacco Company should concentrate more efforts to carry out the following key duties:

First, to improve the organization structure and carry on next steps of the company’ restructuring.

Second, to frequently evaluate and provide support to subsidiaries during their operation. Concurrently, it is necessary to build a product structure that reinforce the development of well-known brand of each subsidiary in Group.

Third, to set up a long-term sustainable development strategy; to improve the collaboration between Parent – Subsidiary companies group and Corporation in terms of market, product and pricing; to strongly develop brand name and increasingly export the products belonging to Parent – Subsidiary company group.

Fourth, to manage capital, balance cash flow and build financial solutions for creating production equity; To actively collect debts and appropriately control inventory; to interest in saving, prevent waste and complete economic-technical criteria.

Finally, to enhance and improve the Group’s branding image and flagship production lines, sustainably develop own markets.