According to information from VCBS Securities, due to legal factors, especially problems with site clearance, the Nghi Son Chlor-alkali-Vinyl production project phase 1 has been postponed to the fourth quarter of 2024. Currently, the phase 2 expansion plan has also been postponed.
Along with the delay in the progress of the "trump card" project of Duc Giang Chemical Group Corporation (HOSE: DGC), VCBS also informed that Duc Giang Chemical is applying for a license to build and exploit aluminum in Dak Nong.
This is an Alumina production project in Dak Nong, expected to be licensed in the next 2-3 years and completed in 2-3 years, expected to be put into operation in the period 2028-2030. VCBS forecasts that with a production capacity of 3 million tons of Alumina, the Group can achieve revenue of about 1.5 billion USD at current Alumina prices, contributing to promoting great growth.
It is known that the scale of exploitation of this project is expected to be about 14.4 million tons of bauxite ore/year, 3 ore processing plants will be built with a capacity of 5.8 million tons of refined ore/year. The total investment for both phases is 57,000 billion VND (equivalent to 2.3 billion USD).
“We believe that news about new projects could be a driving force supporting stock prices in the context of gradual business recovery,” said VCBS analysts.
Regarding the Nghi Son project, VCBS said that according to the Board of Directors, the Nghi Son project phase 1 is expected to be rebuilt in the fourth quarter of 2024, with a production capacity of 50,000 tons of NaOH per year, completed around the fourth quarter of 2025 and can operate at full capacity after 1 year. In addition, the growth story also comes from phase 2 and phase 3 to increase the production capacity of NaOH, PVC, and high-value derivatives with a total investment of up to VND 10,000 billion.
It is known that the Nghi Son Chlor-alkali-Vinyl production project (Nghi Son Project) is the project with the largest investment of Duc Giang Chemicals with a total estimated investment of VND 12,000 billion, divided into 3 phases. Phase 1 alone has an investment capital of VND 2,400 billion, with a ratio of 40% capital contribution from investors and 60% mobilized capital. VCBS estimates that phase 1 of the project can help Duc Giang Chemicals achieve VND 1,500 - 2,000 billion in revenue and VND 200 - 250 billion in profit after tax.
Previously, in July 2024, Duc Giang Chemicals passed a resolution to adjust the investment progress of this project. The construction, installation, testing and handover time will take place from the fourth quarter of 2024 to the first quarter of 2026 instead of the planned June 2024 as informed at the annual general meeting of shareholders.
The project's commencement date has been postponed but its completion date is still according to the old plan, expected in the first quarter of 2026. After completion, the project will have a scale of 150,000 tons of Caustic Soda/year. In addition, there will be 150,000 tons of PVC plastic, 34,000 tons of bleaching powder, 1,000 tons of Chloramine B disinfectant, 30,000 tons of water treatment chemicals, 15,000 tons of HCl acid, 10,000 tons of 10% Javen bleach.
This project is considered by the company's leaders as a "trump card" in the future, when the business operations of the factory in Lao Cai reach a stage where further development is not possible. However, the project has been delayed for more than 3 years due to slow site clearance.
