Struggling Vinalines to open container shipping centre next week

HÀ NỘI — The Vietnam National Shipping Lines (Vinalines) will open a logistics centre for container shipping on December 17 as part of moves to restructure the State-owned firm, according to Deputy Director General Đỗ Thị Ngọc Trang.

The Hà Nội-based centre will provide logistical support for 10 container ships owned by Vinalines. It is expected to help the corporation develop a professional system of container transportation, utilising existing resources from its two subsidiaries – the Vinalines Container Shipping Company (Vinalines Container) and Biển Đông Shipping Company.

By founding the centre, Vinalines expects to cut administrative costs by half, equivalent to VNĐ18.7 billion (US$780,000), by reducing the number of personnel needed and lease payments.

The Government and the Ministry of Transport have adopted long-term and short-term strategies for sea-based economy development and the centre will help translate the strategies into practice, Trang said.

The centre also hopes to lure more domestic and foreign customers and partners in port and logistics industries for Vinalines, boosting its performance, she added.

Vinalines, founded in 1995, is a fully State-owned enterprise. It was transformed into a holding company in 2006 and a State-owned one member limited company in 2010. The corporation has made various restructuring steps to improve its business results after several years of sharply falling profits.

The company’s revenue exceeded VNĐ3.1 trillion in 2017, only half of 2016’s number. Its pre-tax profit was just VNĐ306 billion, equivalent to 12.2 per cent of 2016’s result.

With more than 30 subsidiary and affiliate companies, Vinalines’ total consolidated revenue was VNĐ15.8 trillion in 2017, down by 12.3 per cent year-on-year, while its pre-tax profit surged 189 per cent over 2016 to reach VNĐ682 billion.

In 2018, the company’s leaders have set lower business targets due to continued fleet streamlining and decreasing of financial income.

Vinalines is projected to earn consolidated revenue of VNĐ13.64 trillion in 2018, down 13.7 per cent from 2017, and a pre-tax profit of VNĐ668 billion, down 3 per cent. – VNS