Petrolimex Chairman’s full speech at conference focusing on 2020 & 2021 tasks

Chairman Pham Van Thanh

01:29 AM @ Friday - 15 January, 2021

Secretary of Party Committee – Petrolimex Chairman Pham Van Thanh

Your Excellency Mr Nguyen Hoang Anh – Party Central Committee member, Chairman of the Commission for the Management of State Capital at Enterprises

Your Excellency Mr Nguyen Duc Phong – Vice Secretary of the Central Enterprises Bloc’s Party Committee

Your Excellency Mr Do Thang Hai – Deputy Minister of Industry and Trade

Your Excellencies,

Today, the Vietnam National Petroleum Group (Petrolimex/Group) organizes this conference to review the Group’s production and business activities in 2020. Of note, the event takes place on the occasion of the 65th anniversary of Petrolimex (1956-2021), 65 years - a long journey that has witnessed the establishment and development of the Group, reaching out to become one of the leading enterprises in the country’s economy. First and foremost, on behalf of Petrolimex leadership and laborers, I would like to extend my warmest greetings and congratulations to all of you. Wishing you a good health, happiness and success.

We have just heard valuable guidance and orientations for the Group in the coming time, recognition of the Group achievements as well as encouragement for Petrolimex staff from Mr Nguyen Hoang Anh. On behalf of Petrolimex Party Committee, Board of Management, Board of Directors, I respectfully take it all in. Petrolimex pledges to seriously and effectively implement your instructions with the spirit of innovation, decisive and practical actions, and strong determination to fulfill tasks set for 2021, deserving the trust and support of the Party and State leaders. Once again, thank you Your Excellency Mr Nguyen Hoang Anh and leaders of the Central Enterprises Block’s Party Committee and Ministry of Industry and Trade.

Your Excellencies,

Also, you have heard a detail report on the Group’s production and business activities in 2020 and tasks, objectives and solutions put forward for 2021 presented by Petrolimex Director General Pham Duc Thang, on behalf of the conference’s presidium. Additionally, presentations by representatives of petroleum member companies and corporations provide an insight into the actual petroleum business in each region, area as well as business activities of other sectors, fields in the whole system.

The year 2020 was a really challenging one because of the COVID-19 pandemic world-wide, leading to many consequences and unpredictable changes. The world crude oil plummeted to negative prices for the first time in history, causing many major oil and gas companies in the world to fall into crisis and go bankrupt. The global economy is also experiencing a serious recession.

The production and business activities of the whole Petrolimex system over the past year were badly affected by COVID-19 in all fields: petroleum trading and distribution, aviation fuel, transportation, petrochemical, gas, and other auxiliary services. However, with drastic standpoints and policies of the Board of Management and flexible management solutions of the Board of Directors, the Group has overcome a year full of difficulties and challenges and achieved encouraging business results, and concurrently fulfilled political tasks, ensuring national energy security, meeting essential demands for petroleum of the economy. It can be said that we have seriously and effectively followed the Prime Minister’s instructions on “twin goal” of: reviving and developing the economy and society, striving for highest growth rate; and containing the COVID-19 pandemic.

Regarding domestic petroleum consumption, we exceeded the set target by nearly 8 per cent; however, in terms of profit, we are below the target, especially in the major business that is petroleum. We need to take a straightforward look at and reassess, and take our responsibilities seriously for business performance, profits committed to our shareholders including many big foreign organizations and investors in the world. Once again, we need to affirm that: business performance, profits committed to shareholders as well as values and benefits for customers are always very important goals and the very first priority in our development.

Under the extremely difficult context of the past year, the Group continued to make impressive achievements which can be considered “highlights of year”, particularly: for the fourth consecutive year that the Group has been honored as one of the best listed companies in Vietnam by Forbes, and as Champion of Revenue on the stock market. For the first time, our “Sustainable Development Report” was honored by the Ho Chi Minh City Stock Exchange as one of the top ten of highest quality among those presented by enterprises listed on the stock exchange. These achievements also demonstrate the recognition from the State management bodies and the market to Petrolimex’s business model, efficiency and corporate governance when approaching international standards for increased transparency and modernization, towards the goals of sustainable development, harmonizing economic interests with social, environmental goals.

To obtain such achievements in 2020, a year full of difficulties and challenges, it required the all-out efforts and strong determination from the Leadership to the whole staff. And again we do recognize that through hardships and challenges, Petrolimex’s traditions and culture are continuously upheld and further promoted.

On behalf of the Group’s Board of Management, I would like to thank each manager, each laborer in all positions for their efforts and dedication throughout the year for the common development of Petrolimex.

Ladies and gentlemen,

Entering 2021, which is expected to be the year of recovery for the global economy with the introduction of COVID-19 vaccines. According to the World Bank, Vietnam’s prospects appear positive in 2021 as the economy is projected to grow by about 6.8 percent and stabilize at around 6.5 percent in the following years. In the meanwhile, the Government set a GDP growth target of 6.5 percent.

We need to understand that that is the potential and also challenges. I believe that this year is a promising one for us to have the opportunity to strongly recover and create development breakthroughs for the coming five-year period. I basically agree with the Director General’s report and proposed solutions, I just recommend and emphasize some oriented and suggestive issues for your consideration and implementation.

First: Renew production and business thinking in the direction of adaptation, dynamism in the new normal

Vietnam has basically controlled the epidemic, but we absolutely cannot be subjective to the achieved results, because goals, requirements and tasks set for 2021 are very high whilst we still face numerous difficulties and challenges ahead. Therefore, I call for petroleum member companies, corporations and joint-stock companies to renew their thinking towards the new normal, continue to make efforts and seriously review and recognize the shortcomings in production and business activities to build business plans which timely respond and adapt to the reality, and to be determined to fulfill targets set forth for 2021 with the highest spirit of commitment and responsibility. Concurrently, these units must prioritize and ensure absolute safety of fire prevention and control, explosion prevention in production and business activities throughout the year, especially the coming Year of the Buffalo and stay ready to respond to climate change and any unexpected natural disasters that may occur during the year.

Second: Be highly proactive and flexible, and diversify resources

It is necessary to further enhance the quality of forecasting, evaluation, building plans to have certain initiative in creating sources, supporting business management. The reality in 2020 indicated that, with the rapidly changing and complicated world situation, the unpredictable changes in oil prices have seriously affected business performance of commercial enterprises like Petrolimex. Thus, the evaluation, building plans, ensuring source generation is one of significant tasks that have a vital impact on the Group’s business performance. We must do it well, ensuring the source flexibly and proactively; diversifying suppliers to not depend on any particular source.

Third: Continued organizational strengthening towards professionalism, high efficiency

It is a must to concentrate on the consolidation, restructuring and rearrangement of enterprises in accordance with directions of the Government, and the Commission for the Management of State Capital at Enterprises. This will help Petrolimex to soon improve the Group’s organizational model, and capital structure in line with the set long-term strategic orientations; consequently, concentrating resources for key investments, developing profitable business areas. Accordingly, it is necessary to prioritize key tasks in 2021 as follows:

1/ Implement the divestment, reduce the State ownership in Petrolimex in line with the Prime Minister’s Decision No 908/QĐ-CP dated June 29, 2020 and instructions from the Commission for the Management of State Capital at Enterprises PG Contrade Company/PGCC

2/ Develop and implement the divestment plans regarding the Group’s capital in PG Contrade Company/PGCC

3/ Concentrate on reviewing, finalizing the divestment of non-petroleum investments, inefficient investment fields, and recover the Group’s investment capital.

4/ Review, and evaluate the Group’s capital use in affiliated Corporations and develop equitization/divestment plans to increase efficiency, competitiveness of these enterprises.

Fourth: Proactively use Industry 4.0, speeding up digital transformation to turn Petrolimex into a digital enterprise

Through the COVID-19 pandemic, once again we realize the Party and State’s vision towards digital economy, so right in 2021 Petrolimex needs to innovate faster and stronger, accelerating digital transformation towards building the Group into a leading Digital Enterprise with a smart, safe and dynamic Petrolimex Digital platform. Our digital transformation should be based on key pillars, that is: Organization-People-Technology-and Customer.

We will continue enhancing investment in and application of advanced science and technology in management, production and business activities. This spirit has achieved wide consensus among members of the Group’s Board of Management and Board of Directors in recent years, however, it is essential to create a qualitative transformation; to drastically implement and put [technological advances] into practice to promptly adapt to rapid changes in the current business environment, and concurrently to cut cost and enhance business efficiency in the whole system.

Fifth: Take the lead in sustainable development with clean and renewable energy sources

It is significant to concentrate on studying, developing and investing into new energy projects, particularly clean and renewable energy sources in line with Vietnam’s National Energy Development Strategy to 2030 with a vision to 2045. Additionally, it is essential to reinforce and expand close cooperation with the strategic partner ENEOS to make good use of their shared experience, knowledge and technologies to improve efficiency in business and management operations efficiency at present and to research and implement potential strategic projects in the future.

Sixth: Improve management capacity, develop human capital and build a strong culture

It is a must to renovate management methods, approach and apply advanced, modern management models in the world to increase operational efficiency and maximize corporate resources; which aims to build an operational apparatus at all levels from the Parent Company - the Group, to Corporations, and member companies in a streamlined but efficient direction. Besides, we need to enhance capacity of the leadership and management contingent at middle level to ensure that they work with a high spirit of responsibility, dare to think, dare to do and are professional. Also, it is necessary to synchronously study and complete, and well implement salary and bonus mechanisms based on work efficiency and labor productivity to promote innovation and creativity.

Your excellencies,

The year 2021 is of overriding importance as it is the year of the 13th Party National Congress. That is the starting point for a new development path of the country. Along with the development of the country, Petrolimex will set and carry on much bigger responsibilities and goals, implementing the Group’s strategy for the 2020-2030 period with a vision to 2045.

On the occasion of this event and the 65th anniversary of Petrolimex, I would like all of us to get together to strongly spread Petrolimex’s fine cultural values, in order to bring Petrolimex to new heights, and fulfill Petrolimex’s lofty mission towards the country, the energy sector in general, and the country’s petroleum in particular.

With the results and efforts of the whole Petrolimex system in 2020, I believe and hope that in 2021, the Parent Company’s Board of Management and Board of Directors, petroleum member companies, Corporations/Joint stock companies will continue staying united, strive with higher determination and efforts, be more dynamic and creative to successfully complete goals and tasks set for the year 2021, setting the premise for the following years to further develop the Vietnam National Petroleum, contributing to the national socio-economic development and energy security.

On behalf of the Board of Management and Petrolimex leadership, I would like to express my sincere thanks to the Party and State leaders, distinguished delegates and guests and all of you who attend the conference.

On the occasion of the New Year 2021 and the coming Lunar New Year - Year of the Buffalo, I wish you all health, happiness, luck and success.

Thank you for your attention!

Vietnam National Petroleum Group - Petrolimex (PLX)

Committed to constantly making an effort to go further on the path of development and bring the lives of Vietnamese people and all Petrolimex employees to new heights in the future