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Ho Chi Minh City garment firm shifts to real estate amid ailing core business

Ho Chi Minh City garment firm shifts to real estate amid ailing core business

Friday, March 15, 2024, 19:10 GMT+7
Ho Chi Minh City garment firm shifts to real estate amid ailing core business
Employees work at the Garmex Saigon Corporation factory in Ho Chi Minh City during its prosperity. Photo: Quang Dinh / Tuoi Tre

A formerly robust garment company in Ho Chi Minh City has turned its focus to real estate after laying off workers and liquidating assets due to no orders.

According to a document sent to the Ho Chi Minh City Stock Exchange (HoSE), Garmex Saigon Corporation (GMC) officially announced an increase in its capital contribution to Phu My JSC, which is developing the Phu My housing project in Ba Ria-Vung Tau Province.

Particularly, GMC raised its investment from VND4.34 billion (US$175,460) to VND18.23 billion ($737,000) in July 2023, and then to over VND23.9 billion ($966,240) one month later. 

Phu My JSC is an affiliate of GMC.

Due to a prolonged shortage of garment orders, GMC’s revenue now solely comes from service and business cooperation in the freight transport segment, Nguyen Minh Hang, general director of GMC, said in the communication to HoSE. 

The apparel company has temporarily suspended production since May 2023 and currently has no plans to recruit new personnel for its textile and garment segment.

Instead, the company is leveraging assets and making strategic investments to mitigate losses.

Last month, GMC revealed its intention to sell two land lots covering a combined area of nearly 80,000 square meters.

The first land plot set for transfer spans 50,173 square meters in Tan Thanh District, Ba Ria-Vung Tau Province, approximately 100 kilometers from Ho Chi Minh City.

The second plot is located in the Ha Lam-Cho Duoc industrial zone in Thang Binh District, Quang Nam Province, central Vietnam. It covers an area of 26,000 square meters.

Before the decision to sell the two land lots, the apparel firm had offloaded many assets such as cars, trucks, machines, and manufacturing equipment to maintain its operations.

At its peak, GMC operated five factories spanning over 10 hectares, equipped with 70 production lines and employing over 4,000 workers.

The firm had cut its workforce to 35 as of the end of 2023.

According to its recent financial report, GMC booked revenue of VND8.2 billion ($335,000) in 2023, plummeting from over VND290 billion ($11.8 million) recorded in the preceding year.

As of the end of 2023, the firm had sustained a cumulative loss of over VND73 billion ($2.9 million).

GMC, formerly Saigon Garment Production and Trading JSC, was founded in 1976 as a state-owned enterprise, according to Tien Phong (Vanguard) newspaper. 

It underwent equitization in 2004, subsequently listing on HoSE with the stock code GMC since 2006. 

In 2019, the company officially changed its name to Garmex Saigon Corporation.

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Bao Anh - Binh Khanh / Tuoi Tre News

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