SOE issues can be solved with support

October 02, 2023 | 09:00
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Vietnam Maritime Corporation (VIMC) wants to become the premier integrated maritime logistics group in the country. Le Quang Trung, deputy general director of VIMC and vice chairman of the Vietnam Logistics Business Association, talked to VIRs Luu Huong.

How does the Commission for Management of State Capital at Enterprises (CMSC) extend support and critical advisements to the VIMC?

SOE issues can be solved with support
Le Quang Trung, deputy general director of VIMC and vice chairman of the Vietnam Logistics Business Association

The symbiotic association and support extended by CMSC to businesses, especially the VIMC, is immense and substantial. Every project we undertake, be it short-term or enduring, bears the unmistakable imprint of CMSC’s support, enabling us to overcome various challenges, notably during exceptional periods such as the recent pandemic.

CMSC’s partnership has been crucial, aiding us in overcoming challenges related to capital mobilisation and ensuring the smooth implementation of projects.

A notable instance is their contribution to the financial and operational restructuring project of SP-PSA, one of our crucial joint venture ports. With the indispensable support from CMSC, we were able to conduct successful negotiations with various banks during a financially challenging phase for the economy and the maritime port sector, leading to the successful restructuring of loans exceeding $100 million.

This negotiation resulted in a financial profit of approximately VND1.5 trillion ($63.29 million) - a significant achievement in such a challenging context.

In the past year, VIMC has witnessed a profit growth of 152 per cent, indicating that we have somewhat managed to leave the hardships behind us.

Our operational foundation relies on three main pillars: exploiting 16 sea ports, managing a fleet equivalent to 25 per cent of the national transport capacity, and operating the logistics system. Although the revenue has seen a modest increase of about 4-5 per cent in recent years, the surge in profit by 152 per cent is a notable accomplishment for us.

Given the inherent challenges in the maritime sector, what are VIMC’s strategies to surmount obstacles and the plans to strengthen the company’s core operational aspects?

The maritime sector is inherently cyclical, and it is imperative to accept this reality and adapt strategies accordingly.

Currently, consumer demand is not at its peak, compelling us to intensify efforts to implement optimal solutions and fortify our three key pillars of operation: development, enhancement, and upgrading of the port system in areas such as Lach Uyen; and strategic port transitions in the central regions like moving Danang port to the Lien Chieu area. A pivotal project in Ho Chi Minh City involving international transhipment at Can Gio is also underway.

Additionally, we are working on developing maritime transport systems aligned with the current trends of sustainable development, focusing on greener ships. We are incorporating advanced technology and digital transformation to integrate logistics systems, creating added value and offering a plethora of services to our clients.

To realise these strategic pillars, issues related to policies and investment are inevitable, and we hope to continue receiving the invaluable support from the CMSC and other departments, as we have received over the past periods.

What detailed timelines and intricate plans does VIMC have in the pipeline?

By 2035, VIMC aspires to evolve as Vietnam’s premier integrated maritime logistics group, leading Southeast Asia with global operational footprints, anchored on the three foundational pillars of ports, maritime transport, and global logistics.

For maritime transport, our fleet by 2025 is targeted to weigh around 1.5 million DWT, constituting approximately 20 per cent of Vietnam’s maritime fleet’s tonnage. A key focus will be developing our container fleet to around 200,000 DWT, equating to 30 per cent of Vietnam’s container fleet tonnage and securing a 25 per cent market share in domestic container cargo.

This decade, our focal points encompass maritime transport, seaport exploitation, and maritime services, expanding integrated logistics services grounded on the ecosystem of ports, maritime transport, and maritime services, with port services being the pivotal and crucial sector.

By 2025, we strive to be the foremost provider of integrated logistics services in Vietnam by optimally exploiting and creating competitive advantages, with a consolidated revenue reaching VND13.081 trillion ($551.94 million), and consolidated pre-tax profit achieving VND2.083 billion ($87.88 million).

What are your expectations from the state capital management forum this week in terms of support to companies, especially those having substantial market-driven economies like the VIMC?

We harbour profound hopes that the CMSC, especially in this forum co-hosted by VIR, perpetuates its supportive role, offering sustained assistance and invaluable counsel to enterprises. This is notably for those like ours, where the compass is significantly aligned with market economies.

We are optimistic that the shared wisdom and collective insights emanating from this forum would steer the discourse in a direction that fortifies the foundational bedrock of enterprises like ours.

The VIMC also anticipates that the voices of businesses will contribute to the refinement of policies, capital, and cooperation mechanisms with international partners, optimising resources in capital, land, brand value, tradition, and history at the enterprise.

Defining SOE priorities vital Defining SOE priorities vital

To achieve remarkable achievements in nearly 40 years of renovation, the Vietnamese business community as a whole, and state-owned enterprises (SOEs) in particular, have made relentless efforts, overcoming numerous challenges. They have reaffirmed their role in guiding the economy.

Practical power direction can propel SOE fortunes Practical power direction can propel SOE fortunes

Experts have agreed that refining the model of state capital agencies is one of the most critical aspects in enhancing the efficiency of state-owned enterprises, transforming them into pioneering forces in the economy.

By Luu Huong

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