Vinaconex's Outstanding Progress

The freezing real estate market, bad quality buildings, inadequate mechanisms on land and capital were big problems facing the construction field in 2005. The projects waiting for investment and the site grant for execution have created difficulties for many construction companies. This is the main reason giving a dark picture for the construction industry which had a high growth rate and big contribution to the economy in 2005. In such a context, Vinaconex has endured the same difficulties. The leaders of the construction industry have required their “eminent son” to put more efforts into regaining prestige as the impetus for the fulfilment of 2005’s plan. Similarly, the public will require more from a strong construction trademark. The burden has been laid on the leadership of Vinaconex and the staff of more than 36,600 employees.

With a total turnover of VND4,600 billion in 2005, up by 21 percent and VND195 billion contributed to the state budget, increased by 16 percent over 2004, Vinaconex has reached the end of a generally difficult situation for the construction industry. The most remarkable feature in 2005 was that Vinaconex successfully fulfilled its role of general contractor of many national level construction projects, notably the hydraulic power works at Cua Dat (in Thanh Hoa) with total investment of over VND4,700 billion (exceeding 2005’s plan by 1.5 times), Buon Kuop (Dac Lak) of more than VND5,000 billion, Buon Tua Srah (Dac Nong) of more than VND3,000 billion (the river will be filled in January of 2006) contributing to meet the power demand required by the economy.

2005 is still called the “investment year” of the corporation. According to Mr. Nguyen Van Tuan, General Director of Vinaconex, investment is one of its main tasks. There are few businesses which invest their entire turnover in new works. Thanks to its active investment policy, the corporation has made significant changes in its business structure and position as well as competitiveness on the market. Vinaconex is making strong footholds on the journey to becoming a large economic group.

In 2005, Vinaconex implemented the investment of nearly VND2,300 billion including major projects which were started like the Cam Pha Cement Plant (Quang Ninh) of VND4,700 billion having an annual capacity of 2.3 million tonnes, Yen Binh Cement (Yen Bai province) with the investment of VND1,160 billion and the capacity of one million tonnes a year. It has started the second phase of Lang – Hoa Lac Highway developed under the expansion and development objective of Ha Noi City and the National Conference Centre. In addition, it has executed the construction of the Da River Water Plant of 600 cubic metres per day with the total investment of VND1,400 billion. Mr. Tuan said that, the capital source of about VND12,616 billion has been mainly mobilised from foreign and domestic credit organisations as well as investors. This is the result of effective investment. When projects are feasible promising high profits, the capital will be optionally provided by investors.

 

To create the spectacular breakthroughs in business, the role of enterprise rearrangement should be mentioned. By the end of 2005, Vinaconex had already fulfilled the plan of equitising all enterprises in the corporation. The equitised companies have been well developed. For the equitisation of Vinaconex under the pilot decision of the Government and the construction industry, the corporation has finished the equitisation plan for submission to the Ministry of Construction. The corporation’s shares are expected to be sold by the beginning of 2006. Mr. Tuan revealed that, by the end of the first quarter of 2006, the shares of Vinaconex will be listed on the stock market.

 

Vinaconex is urgently finishing the preparation for economic integration. With satisfactory results in 2005, it is certain that the investment projects of Vinaconex will meet favourable conditions in the future.