RISK MANAGEMENT REPORT

WITH THE DESIRE TO BE A PIONEER IN LEADING THE MARKET AS CA MAU FERTILIZER, THE COMPANY HAS TO MAKE ALL EFFORTS TO OVERCOME CHALLENGES ON THE DEVELOPMENT JOURNEY. TO BE PROACTIVE IN MANAGING BUSINESS AND PRODUCTION, DIFFERENT RISK MANAGEMENT SCENARIOS SHOULD SET OUT TO EFFECTIVELY CONTROL. THEREFORE, WE ALWAYS PAY HIGH ATTENTION TO RISK MANAGEMENT IN THE ENTIRE SYSTEM. IN 2021, THE SYNCHRONOUS IMPLEMENTATION OF RISK CONTROL SHOWED THE EFFECTIVENESS WHEN SUCCESSFULLY REDUCING RISKS IN SPITE OF DISADVANTAGES IN THE MARKET.

Plant operators and the Company’s leaders at quarantined rooms/workshops

At workshops and Ca Mau Fertilizer Plant, Covid-19 prevention measures have been implemented more strictly than ever

Covid-19 prevention at the main gate of Ca Mau Fertilizer Plant

ACHIEVEMENTS

At PVCFC, operation is always not separated from inspection and supervision which are conducted quarterly to actively review and assess potential risks and timely give out exact solutions. The Company has concretized risk control by issuing and applying KRI which is a basis for monitoring and giving warnings the possible risk in an exact and effective manner. Engagement will create deep understanding. PVCFC has promoted the advantage of IT to successfully research and develop its own risk management software which was initially put into use in the first quarter of 2020. This has shown the grown and strength of the Company’s corporate governance.

Production risks

As you known, the year 2021 faced many difficulties in shortage of gas supply; therefore, it is essential to closely handle the situation, analyze opportunities and forecast the potential risk continuously. On one hand, we pushed negotiation with strategic partners and suggested appropriate mechanism in the coming time to ensure raw material supply for production. On the other hand, we strived to maintain gas stability based on professional technique. Promoting technical initiative and creation, our high-skilled engineer team has optimized operation process to improve capacity and enhance productivity, saving operating costs and losses. Thanks to that, high-quality products have been produced regularly, meeting the market demand.

Risks from suppliers
(distribution channel system)

The distributors sell not only PVCFC’s products but also products from many other companies, imported products and even building their owned brands. As a result, the competition in the market is fiercer and fiercer.

Risks from competitors

Most of fertilizers provided by different suppliers have equal quality. The sales efficiency is mainly based on the brand’s reputation and the marketing strategy. At present, the marketing programs are also the same among the companies; therefore, creating difference and unique to attract customers is very difficult when the competitors are easy to copy your marketing ideas.

Risks from substitute products

At present, because supply exceeding demand and convenient trading, granular Urea and other products for Mekong Delta no longer get advantages. There are a lot of similar imported products with good quality and competitive price. Therefore, it is difficult for the Company to maintain its market position.

SUMMARY AND ORIENTATION

Risk management has become an essential part of PVCFC’s operation. Promoting the available achievements, we will continue to build risk management system according to COSO-ERM in a comprehensive and consistent manner in line with risk culture and strategy which helps our leaders to focus on building policies, determining central point and operation mechanism, improving risk measurements and fostering risk management responsibility. In addition, we accelerate solutions to identify potential risks, change portfolio and are ready to response risk circumstances in entire system.

In 2022, PVCFC will continue to complete risk management system with major duties as follows:

Supplementing and completing KRIs in conformity with the risks to be faced in the coming time.
Putting risk management software built by PVCFC into official use.
Reviewing and updating risk management document system for the next period in the direction of applying information technology to system management on risk management software.
Continuously reviewing, identifying, evaluating and managing risk portfolio and taking timely response actions.

Structure and operation of BOD

Structure and operation of SB

Risk Management Report

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THINKING

IS MOTTO OF ACTION

CORPORATE GOVERNANCE