Vinashin Develops Internal Strength for Integration

Vinashin Develops Internal Strength for Integration

With its total output reaching over VND 7,000 billion in 2004, or an increase of 40 per cent against that of 2003, last year was really a good year for Vinashin. VIB Forum had an interview with Nguyen Thanh Binh, general director of the Vietnam Shipbuilding Industry Corporation (Vinashin), about the corporation’s achievements and its future challenges.

Can you tell us the highlights of Vinashin’s activities in 2004?

Vinashin completed all the targets set for the Vietnam shipbuilding industry for the 2001-2005 period in repair, building of ships, capital construction and external economic relations in late 2003. Therefore, last year’s activities targeted the industry's master plan until 2010, which was approved in Decision N⁰ 1055/QD-TTg dated November 11, 2002. Vinashin has accelerated the implementation of these targets. In 2004, we achieved some encouraging results.

Firstly, our first export 6,380 DWT ship was handed over to Japanese customers. Secondly, we began to implement a contract on building 15 ships of 53,000 DWT for Graig Group of the UK. Ho Chi Minh City ship building has also progressed, The Saigon Shipbuilding Company was capable of building 6,500 DWT ships. In the past, the company could build ships for inland transportation with a total load of less than 1,000 tonnes. Fourthly, many large-sized ships with capacity of 10,000 DWT were launched and handed over to northern enterprises.  

What does a growth rate of 30 per cent per year imply? What do you think about the idea that it is simply too high a value figure as the corporation’s revenues are not high when the corporation has not been active in manufacturing main materials?

A growth rate of 30 per cent was calculated on average for all activities of Vinashin. Yet, this growth rate has not met requirements when the maritime economy is seeing a strong development in the 21^st century. Vinashin should gain a higher growth rate. The fact shows that this is realistic if we combine three factors, including tradition, modern technology and capital.

Vinashin’s high growth rate over the past few years proved that the Vietnam shipbuilding industry’s master plans have been developed on a suitable scientific foundation with suitable methods for accessing the world under the guidelines of the Government. As a result, the corporation can develop internal strength during the integration process.

Like many other industries, the shipbuilding industry has some specific features, which during the international integration process have formed a national division. Vinashin’s target until 2010 is to gain a localisation proportion of 60 per cent of its products. With such a proportion, we will be able to manufacture important details locally. We can consider the import of some high-tech materials and accessories but the local labour force is ours. This is a shortcut for the Vietnam shipbuilding industry to narrow the gap between countries which already have a developed shipbuilding industry.

Last year, Vinashin signed contracts on building ships with some foreign firms, which may be considered as a success, but the corporation faced difficulties in getting capital to implement contracts. What will Vinashin do in 2005 to be active in seeking capital sources?

We faced this difficulty not only in our contract on building 15 ships with a capacity of 53,000 DWT for Graig Group, but also other contracts with foreign partners. We are still unfamiliar with the basic issues of the market economy.      

However, things will be alright once mobilised capital is used in an effective and profitable manner. Vinashin will have to invest in suitable projects. Also, our member enterprises should shorten their production circles, accelerating capital turnover. Quality, progress, and prices are three decisive factors for competition in the market. At the meeting between the Prime Minister and enterprises in 2004, enterprises expressed their wish to receive more attention and support from the Government and State officials, so that they would be able to get access to loans, soft loans with credit guarantees, and export support. Vinashin is one of the enterprises to have such a wish.

As an important transitional year for the implementation of the prime minister-approved project under Decision 1420/QD-TTg on the building of Vinashin into a strong corporation, acting as the backbone of the Vietnam shipbuilding industry from 2001 to 2010. What should Vinashin do to accelerate project implementation?

In 2005, Vinashin should change its marketing, financial activities, its organisation and management as the liberalisation of the regional market is just one year away.

Therefore, we should promote the corporation’s capacity building and production expansion four fold against 2000, the beginning year of the 2001-2005 five year plan. We should create favourable conditions with an adequate material and technical base for integration. In addition, we should promote investment, modernising some major sections in manufacturing, in particular in building large-sized ships.

At the same time, we should promote co-operation with foreign partners to receive new technologies for building 100,000 DWT oil tankers, assembling and manufacturing engines and producing steels for specific purposes. Vinashin will invest in developing software for researching, designing and piloting ship models. We will co-operate with agencies, localities and the army to take advantage of their capacity of manufacturing accessories for ships. This is the best way to successfully achieve the localisation proportion of 60 per cent in the corporation’s products.

Nam Trieu’s success in manufacturing welding rods, which meet the international standard, and other specific products of Vinashin member enterprises are the results of the corporation’s suitable investment policies. We have invested in improving our skills in the repair and building of ships under priority policies in the Decision 117/2000/QD-TTg dated October 10, 2000 of the prime minister and the Decree 106/2004/ND-CP dated April 1, 2004, of the Government on State credit for development.

These are encouragements and priorities given by the State to the corporation and each member enterprise.              

In recent years, the corporation's products have been of high quality, meeting the international standard for export, which have helped strengthen the national fleet. These are concrete results of the implementation of tasks assigned by the Government to the Vietnam shipbuilding industry.

• Reported by Le Hien