Construction Ministry petitions to sell Viglacera float glass plant

The Ministry of Construction has asked for the government´s permission to sell the float glass plant of the Vietnam Glass and Ceramics for Construction Corporation (Viglacera).

The reason is that after five years of operation, this plant has incurred losses of more than VND80 billion (US$5 million).

The Viglacera Float Glass Company (VIFG) is a member of Viglacera corporation, which is located in the southern province of Binh Duong, with a designed capacity of 300 tonnes of glass per day.

The plant was put into operation in October 2002, meeting Japanese standards JIS R-3203. Since its investment capital is loans (accounting for 99.4% of the total investment), the plant´s financial cost is too high and its products can´t compete with similar ones in the market. By the end of December 2006, its debt exceeded VND84 billion (over $5 million).

Vietnam currently has seven companies producing construction glass with a total daily capacity of 1,650 tonnes. In addition, two other projects are underway, including a float glass factory of Japan´s Nippon Sheet Glass Co., Ltd. in the southern province of Ba Ria-Vung Tau with a daily capacity of 500 tonnes and another in Chu Lai, central Quang Nam province of the Vietnam Coal and Minerals Group, with a daily capacity of 900 tonnes.

The two new float glass projects will be completed and become operational in late 2008, raising the total capacity of construction glass of Vietnam to 3,050 tonnes per day, causing fierce competition in the market.

Viglacera Corporation negotiated with Japan´s Nippon Sheet Glass Co., Ltd, the partner of Viglacera in the Vietnam Float Glass Co, Ltd. (VFG) joint venture, to sell the Viglacera Float Glass Company to VFG.

The two sides signed a memorandum of understanding, in which VFG commits to buying VIFG and merging it into VFG.