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Shipbuilder not fine in 2009   2009-10-28 - VietNamNet/ Dan tri, Tuoi tre, GTVT

Shipbuilding giant Vinashin is facing difficulties after only 50 percent of projected plans for 2009 have been met.

 

World recession is tough on Vietnam shipbuilder

 

Vinashin’s 1000 billion dong worth ship, Hoa Sen 

Meanwhile much of its shipbuilding and industrial zone development remains delayed due to lack of funds.

 

Previous years, especially 2008, were very successful for Vinashin – which is seen as the pride of Vietnam’s shipbuilding industry. Group reports show total revenue of 32,538 billion dong in 2008, an increase of 48.06 percent over 2007.

 

The high growth rate in 2008 was down to a string of major contracts. Subsidiaries Nam Trieu, Bach Dang, Pha Rung and Ha Long built completed nearly 30 projects. These include the 150,000 DWT floating storage offloading unit (FSO 5) for PetroVietnam, the 105,000 DWT oil tanker for Dung Quat oil refinery, 32 ships for the shipping firm Vinalines, and contracts signed with Israel and Norway.

 

The orders brought jobs to Vinashin’s member companies. The group employs 600,000 workers and hoped to see a growth rate of 32 percent in 2009.

 

However, in the first nine months of this year, the total industrial production value of the group was just 19,500 billion dong, fulfilling just 50 percent of the yearly plan. The total turnover of 14,900 billion dong is only 44 percent of the plan.

In all, 10 percent of signed contracts have been canceled, leading to Vinashin’s subsidiaries sitting idle.

According to Tran Ba Thanh, chairman of Vinashin’s Trade Union, the average income of the group’s workers has decreased by 500,000 dong from the previous level of 2.8 million dong. Meanwhile, there are reports of salaries still owing and of more than 1000 workers having been laid off.

 

In fact, despite‘s Vinashin success last year the seeds of their downfall were sowed in 2008. It was then that the commercial banks tightened lending in an effort to help curb inflation. Meanwhile, Vinashin has been carrying out too many projects at the same time and each projects needs huge capital.

 

In June 2009, Vinashin subsidiaries reported that the group was 150 billion dong (about $833 million)   in arrears on payments.

 

Since Vinashin’s financial difficulties have been exposed, it has been heavily criticised for the bad management.

 

The company has been ciriticised for spending big on unsuitable equipment and on investing in too many fields.

 

Vinashin’s purchase of the 1000 billion dong ship, Hoa Sen, has been highlighted because the ship has been left idle with neither tourists nor cargo.

 

Currently, Vinashin’s leaders remain officially optimistic and believe that the remaining yearly plan can be fulfilled in the last three months.



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