Workers at Ca Mau Fertilizer Plant - Photo: DCM
Ca Mau Petroleum Fertilizer Joint Stock Company (Ca Mau Fertilizer, HoSE: DCM) has just announced the minutes of the 2025 annual general meeting of shareholders that was recently held.
At the meeting, many shareholders raised questions about the impact on Ca Mau Fertilizer's business operations due to geopolitical conflicts in the world, especially the conflict between Israel and Iran.
According to Mr. Van Tien Thanh - General Director of the company, observing the early stage of the year, the world economy tended to deflation, oil prices fell to 61 - 64 USD/barrel. However, under the impact of the current conflict, oil prices have increased sharply to 74 USD/barrel and are forecasted to continue to increase to 100 - 120 USD if the tension persists.
Energy prices including oil, gas and coal play an important role in input costs of the fertilizer industry.
Of these, natural gas is the main raw material for the production of ammonia, an essential input in the production of urea fertilizer.
Normally, gas costs account for 60-75% of the cost of producing nitrogen fertilizer. Ca Mau Fertilizer currently buys gas from PV GAS (with the same parent company as Vietnam National Energy and Industry Group) under a long-term contract and gas prices are still adjusted according to market fluctuations.
When oil prices decrease, input gas prices also decrease, helping businesses like Ca Mau Fertilizer reduce production costs. Conversely, when oil prices increase, input costs increase, affecting product prices.
Fertilizer prices spiked in 2022 due to the impact of the COVID-19 pandemic and the Russia-Ukraine conflict. According to Ca Mau Fertilizer's management, this scenario is unlikely to be completely repeated in the current period. However, based on personal experience, Mr. Thanh believes that fertilizer prices will continue to increase in the coming time.
Expectations from VAT, new business areas
Another noteworthy point is that from July 2025, fertilizers will officially be subject to 5% value added tax (VAT), instead of being tax-free as before.
This policy is expected to support domestic fertilizer manufacturers, thanks to the ability to refund input VAT. Thereby, production costs can be reduced, contributing to improving the competitiveness of domestic products compared to imported goods.
At the congress, a question was raised about how much percentage of VAT on fertilizers Ca Mau Fertilizer expects to reduce its selling price for customers after the VAT Law on fertilizers comes into effect. The management board said that with the new regulation allowing input tax refunds, production costs are expected to decrease. However, instead of directly reducing the selling price, this enterprise will promote sales promotion activities, after-sales policies and benefits.
Another issue that has attracted shareholders' attention is the plan to expand into the field of milk processing and dairy products, as well as "where the company's advantage lies in this field".
The leader of Ca Mau Fertilizer said that in the field of post-harvest processing technology, the company researches and tests the processing of seeds to produce beverages. The direction of the enterprise is to build raw material areas, cooperate with units with a foundation in the food industry to build brands and clearly define market segments.
According to the 2024 annual report, Ca Mau Fertilizer mentioned the goal of building a closed agricultural production and processing model, from planting, preservation, processing to transportation and consumption; becoming one of the three largest fruit and medicinal herb exporting enterprises in Vietnam (including fresh fruit and processed products) in terms of revenue, with the expectation of reaching more than 20,000 billion VND per year from 2030.
Fertilizer consumption demand in Vietnam is currently estimated to fluctuate at 10.5 - 11 million tons/year.
According to self-published data, Ca Mau Fertilizer had a net profit of more than 1,400 billion VND last year, accounting for more than 10.6% of the national market share.
The company plans to have total consolidated revenue of nearly VND14,000 billion, while net profit will decrease by nearly 46%, to about VND774 billion.
Source: https://tuoitre.vn/ong-lon-chiem-gan-11-thi-truong-phan-bon-du-doan-gia-se-tiep-tuc-tang-20250617233525448.htm
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