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PETROVIETNAM FERTILIZER & CHEMICALS CORPORATION

www.dpm.vn 1

THE OUTLOOK FOR FERTILIZER

SUPPLY IN VIETNAM

Cao Hoai Duong – President & CEO

IFA Crossroads Asia-Pacific 2012

Manila, Philippines 29-31/10/2012

CONTENT

1. PVFCCO AT A GLANCE

2. VIETNAM AGRICULTURE AND ECONOMY OVERVIEW

3. FERTILIZER MARKET SITUATION

4. OUTLOOK FOR UREA SUPPLY

PETROVIETNAM FERTILIZER & CHEMICALS CORPORATION

www.dpm.vn 2

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CONTENT

1. PVFCCO AT A GLANCE

2. VIETNAM AGRICULTURE AND ECONOMY OVERVIEW

3. FERTILIZER MARKET SITUATION

4. OUTLOOK FOR UREA SUPPLY

PETROVIETNAM FERTILIZER & CHEMICALS CORPORATION

www.dpm.vn 3

OVERVIEW

The biggest producer and trader of fertilizer in

Vietnam

Member of Petrovietnam Oil and Gas Group

(PetroVietnam)

A Blue chip stock listed on Hochiminh Stock

Exchange (HoSE). Stock code: DPM

Charter capital (2007): 3,800 billion VND (~238

million USD)

Total shares: 380,000,000

Market value: 705 mil USD Headquarter: Ho Chi Minh city

www.dpm.vn 4

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PVFCCO’S UREA MARKET

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- Capacity of production: 800,000 MT

prilled urea per year.

- Import - Export quantity (MT):

Year Export Import

2011 30,000 130,000

2012 180,000 100,000

PVFCCO’S UREA LOCAL MARKET SHARE

10%

51% 39%

2011

9%

12%

55% 20%

4%

2012

Ha Bac Import PVFCCo

Ninh Binh Ca Mau

www.dpm.vn 6

Source: PVFCCo

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REVENUE & NET PROFIT (2009-2012)

Unit: million USD

www.dpm.vn

Year

Amount

0

100

200

300

400

500

600

2009 2010 2011 9m/2012

350 358

465

504

69 87

148 112

Revenue Net Profit

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DISTRIBUTION NETWORK

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30 warehouses/storage (250,000MT)

PVFCCo North

2 owned branch, 45

wholesalers

545 retailers

PVFCCo Central

2 owned branch, 16

Wholesalers

813 retailers

PVFCCo South East

6 owned branch, 25

wholesalers

760 retailers

PVFCCo South West

2 owned branch, 24

wholesalers

804 retailers

Cambodia Branch

Myanmar Rep.

End Users

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DISTRIBUTION NETWORK

30 warehouses/storage

with capacity: 250,000MT

- 12 Branches

- 110 Wholesalers

~3,000 Retailers located

throughout the country

Export ports:

Ba Ria – Vung Tau

Ho Chi Minh City

Method of shipping:

Bags/Container.

Bulk.

www.dpm.vn

CONTENT

1. PVFCCO AT A GLANCE

2. VIETNAM AGRICULTURE AND ECONOMY OVERVIEW

3. FERTILIZER MARKET SITUATION

4. OUTLOOK FOR UREA SUPPLY

PETROVIETNAM FERTILIZER & CHEMICALS CORPORATION

www.dpm.vn 10

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KEY ECONOMIC FIGURES

www.dpm.vn

Items 2009 2010 2011 2012 (E)

Population (mil. persons) 86.03 86.93 87.84 88.60

GDP Growth rate (%) 5.3 6.8 5.9 5.7

GDP per capita ($) 1,130 1,224 1,411 1,468

Share of agriculture (%) 20.9 20.6 20.5 20.5

Source: World Bank/Vietnam Economic Forum

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VIETNAM’S CLIMATE

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Source: www.chinhphu.vn

Vietnam can be divided into two major climate regions:

Northern part: a tropical monsoon climate, with four distinct

seasons (Spring-Summer-Autumn-Winter), and high humidity;

10°C to 32°C.

Southern part: moderate tropical climate, hot all year round and is

divided into two seasons (Dry and Rainy season); 23°C to 32°C.

The average rainfall each year:

Hanoi: 1,763 mm.

Hue: 2,867 mm.

Ho Chi Minh City: 1,910 mm.

The average air humidity is over 80%, even 90% in rainy season and

in drizzly weather.

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AGRICULTURE ARABLE LAND 2011

www.dpm.vn

Unit: Thousand Hectare Source: General Statistics Office

Cashew; 360 Rubber; 834

Coffee; 571

Tea; 126

Pepper; 55

Fruits; 833

Rice; 7651

Corn; 1117

Sugarcane; 281

Cotton; 9

Peanut; 224

Soybeans; 182

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AGRICULTURE PRODUCTIVITY

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0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

2009 2010 2011 Unit: Mectric ton per Hectare Source: General Statistics Office

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www.dpm.vn

Unit: Thousand Metric Ton Source: General Statistics Office

15

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2009

2010

2011

AGRICULTURE PRODUCTION

FERTILIZER SUPPLY AND DEMAND 2011

www.dpm.vn

0

500

1000

1500

2000

2500

3000

3500

Demand

Production

Balance

16

Unit: Thousand MT Source:Agroviet

Q’ty

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CONTENT

1. PVFCCO AT A GLANCE

2. VIETNAM AGRICULTURE AND ECONOMY OVERVIEW

3. FERTILIZER MARKET SITUATION

4. OUTLOOK FOR UREA SUPPLY

PETROVIETNAM FERTILIZER & CHEMICALS CORPORATION

www.dpm.vn 17

FERTILIZER DEMAND BY CROPS

www.dpm.vn

Winter-spring; 4580

Summer-Autumn ; 2760

Autumn-winter; 1760

Unit: Thousand MT Source: MARD

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FERTILIZER DEMAND BY AREA

www.dpm.vn

North; 2960

Central; 1570

South; 4570

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Unit: Thousand MT Source: MARD

FERTILIZER IMPORT IN 2011

www.dpm.vn

Source: PVFCCo

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Value

Urea, 1,126

SA, 890

MOP, 886

DAP, 618

Others; 814

Urea, 440

SA , 201 MOP,

423

DAP, 380

Other, 266

Quantity

Total: 4,334 Total: 1,710

Unit: million USD Unit: thousand MT

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FERTILIZER USE HABITS IN VIETNAM

www.dpm.vn

Source: PVFCCo

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Urea: Use only prilled urea for farming.

Most farmers are now overusing urea.

NPK is mainly “blended” one.

DAP is used in the South of Vietnam only.

The urea use efficiency only reached 30-45%,

phosphate 40-45% and potash 40-50%.

CONTENT

1. PVFCCO AT A GLANCE

2. VIETNAM AGRICULTURE AND ECONOMY OVERVIEW

3. FERTILIZER MARKET SITUATION

4. OUTLOOK FOR UREA SUPPLY

PETROVIETNAM FERTILIZER & CHEMICALS CORPORATION

www.dpm.vn 22

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PETROVIETNAM GROUP

VINACHEM GROUP

Phu My Fertilizer – 800kTpa

Ca Mau Fertilizer (2012) – 800kTpa

Supply – 1,600kTpa

Ha Bac Fertilizer – 180k Tpa

Expansion of Ha Bac Fertilizer (2014) – 320k Tpa

Ninh Binh Fertilizer (2012) – 560k Tpa

Supply – 1,060k Tpa

Demand in southern area – 1,000k Tpa

Demand in northern area – 600k Tpa

Demand in central area – 400k Tpa

CAPACITY AND PRODUCTION

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Source: VCSC, PVFCCo

VIETNAM SUPPLY OUTLOOK TO 2015

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Unit: Thousand MT

Source: VCSC, PVFCCo

0

500

1000

1500

2000

2500

3000

2010 2011 2012 2013 2014 2015

147 194 190 190 414 500

807 801 800 800 800 800

560 800

800 800 392

560 560 560

Ha Bac Phu My Ca mau Ninh Binh

Q’ty

Year

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Urea supply will increase nearly 100% from 2012 onwards

VIETNAM SUPPLY AND DEMAND 2010-2015

25 www.dpm.vn

0

500

1000

1500

2000

2500

3000

2010 2011 2012 2013 2014 2015

Ninh Binh

Ca Mau

Phu My

Ha Bac

Urea for Farming

Demand for Urea (includingNPK Production)

26 www.dpm.vn

VIETNAM SUPPLY AND DEMAND 2010-2015

From 2012, Vietnam becomes one of the fertilizers

exporter.

PVFCCo is the biggest exporter in Vietnam with the

estimate export quantity from 200,000 – 400,000

MT/year.

All potash and SA fertilizer for local demand has been

imported 100% from overseas.

Phosphate is supplied 100% from local factories.