Vinacomin - Lam Dong Aluminum Company Overcoming Difficulties to Fulfil All Tasks

11:50:29 AM | 4/2/2021

Vinacomin - Lam Dong Aluminum Co., Ltd (LDA) was established on October 1, 2010. Assigned to run the first alumina production project in Vietnam, having no previous experience for reference and handling complicated and completely new technology, with a high sense of responsibility and creative management, Vinacomin - Lam Dong Aluminum Co., Ltd overcame difficulties and effectively operated the project to lead the country in bauxite mining and alumina production to move towards extracting aluminum using electrolysis. To find out more information about LDA’s business, our reporter has an exclusive interview with Mr. Vu Minh Thanh, Director of LDA. Quoc Hung reports.

 

As the year 2020 has ended, what difficulties and advantages has LDA faced?

The world was hard hit by the Covid-19 pandemic, resulting in the global economic downturn, and most of our alumina products were exported to the world market. Therefore, in 2020, our biggest difficulty was the plummeting price of alumina products, increased alumina inventories and costs, which destabilized the company’s business operations and profitability. Alumina production lines were equipped with different equipment types and origins. Therefore, during the peak time of Covid-19 pandemic contagion, we faced difficulties in the supply chain of materials from abroad such as measuring equipment, imported fluxes and filter cloth.

However, in 2020, the company still managed to exceed its production capacity; well-managed and effectively balanced production and business; its projects were profitable, significantly contributing to the local budget and taking good care of workers.

In such mixed circumstances, how were LDA’s business results?

With the support of local authorities, relevant agencies, the close direction of the Vietnam National Coal, Mineral Industries Holding Corporation Limited (Vinacomin), and the effort of all the leadership and the staff, the company continued to successfully complete all tasks in 2020. Alumina output increased by 3.1% over 2019, the profit exceeded the plan, growth continued to create the foundation for sustainable development for the following years. Depreciation indicators reduced, expense planning was well applied and production costs decreased deeply.

Specifically, alumina-equivalent production reached 707,200 tons, 8.8% higher than the plan and 3.1% higher than in 2019; alumina sales totaled 665,900 tons, 10.0% higher than the full-year year plan; total revenue was VND2,768.7 billion, 4.9% higher than the yearly plan, and 14.6% lower than in 2019; and total operating profit was VND62.2 billion, 335.9% higher than the plan, and 3.2% higher than in 2019. Return on equity (ROE) ratio was 21.7%; and the average monthly salary of an employee reached VND11.7 million, 9.8% higher than the plan and 9.0% higher than in 2019.

Technology governance took a new step forward in some stages. Key input consumption such as soda, electricity, coal was lower than the plan.

Environmental safety also achieved many important results. In the year, the company completed the procedures for ISO 14001:2015 environmental management certificate. Environmental safety was ensured and no environmental incidents occurred. LDA continued to maintain and develop the "factory - park" model, characterized by green trees, a green and beautiful landscape.

Surrounded by difficulties, how could LDA have such success?

First, to reduce costs to achieve higher economic efficiency when alumina selling price declined in the year, the company paid special attention to cost management solutions so that the cost was significantly reduced and profit exceeded the plan. The company drastically implemented the program on optimizing and standardizing production and management stages. LDA operated optimal production models at coal gasification and thermoelectricity. Good technology management also reduced consumption indicators.

Second, in recent years, LDA invested to apply computerization - automation programs to production, management and operation. The company is the leading unit of Lam Dong province and Vietnam National Coal-Mineral Industries Group (Vinacomin) in digital transformation. During the Covid-19 pandemic, the company promptly applied Voffice management software integrated with digital signatures and applied online meetings. In addition, the company consolidated modern camera systems to monitor all production. By the end of 2019, most of the equipment was monitored and controlled at the Central Control Room of the production workshops. The overall production operations of the Alumina Factory could also be monitored for all the operating parameters of the production sites.

2021 is forecast to be a challenging year for businesses. What solutions will LDA take to complete the plan?

We will continue to maintain and improve the efficiency of management in all aspects, combining the optimization program of production, technology, equipment in order to continuously lower product costs and improve production efficiency.

We will continue to perfect optimal operating models at all stages to overcome bottlenecks, improve line efficiency, coordinate to well implement the program of investment in enhancing production capacity to 800,000 tons of alumina.

LDA will pay attention to improving working conditions and working environment for employees, ensure enough jobs, salary and income, raise the quality and value of employee benefits and enhance the quality of human resources and ensure all available resources for short and long-term strategic tasks of the company.

The company’s business performance depends on many subjective and objective factors. How do you feel when the Lunar New Year is coming with a lot of challenges and opportunities ahead?

Vietnam has controlled the Covid-19 epidemic very well. However, the epidemic continues to be complicated and worsening around the world. Economic stability and growth depend heavily on the success of controlling the spread of the Covid-19 epidemic. Although the world will have solutions to adapt to the epidemic, the world economy is forecast to face numerous difficulties in 2021, with growth expected to be very slow. In 2020, thanks to the effective control of the Covid-19 epidemic, Vietnam is one of a few countries that achieved economic growth.

Believing in the Government's drastic and effective epidemic control, Vietnam is forecast to maintain growth momentum in 2021 when appropriate measures will be adopted to stimulate domestic consumer demands and grasp more opportunities from redirected supply chains of major corporations in the world to countries with lower cost and better safety.

Before this opportunity, how do entrepreneurs and enterprises play their role?

Since the Party and the Government adopted private business development policies, the important role of entrepreneurs is increasingly asserted. To mobilize social resources, make commodity products, and promote the country's economic development, the entrepreneur force plays a key role. Vietnamese business people are always creative, enterprising and willing to face difficulties and risks to make profit, live responsibly with their families and the social community. These are the premises and advantages for the country’s economic development.

In order for entrepreneurs and enterprises to promote economic development, the government needs to have open, quick and timely policies to deal with proposals as well as difficulties faced by enterprises; reduce overlapped inspections and apply stronger measures against violations.

Source:  Vietnam Business Forum