Vietnam National Shipping Lines (Vinalines) will launch an initial public offering (IPO) in the second quarter of 2018, said Acting President and CEO of Vietnam National Shipping Lines Nguyễn Cảnh Tĩnh.
Tĩnh said the State would hold 65 per cent of the charter capital in the parent company, while other investors would be allowed to purchase 35 per cent.
Parent company Vinalines will own 65 per cent or more of charter capital at joint stock companies including Hải Phòng, Sài Gòn and Đà Nẵng ports and will continue its holdings at its subsidiaries, where it will operate logistics services and divest capital in shipping businesses.
Recessions for the world shipping market often last five or six years and then begin recovering. After reaching its peak in 2008, the charter freight of dry bulk ships with tonnage from 40,000 tonnes to over 100,000 tonnes dropped by 90 per cent. However, within three years from January 2015 to April 2017, half of the world's 20 largest shipping firms have (or will) "disappear" due to acquisitions, mergers or bankruptcies.
“The shipping crisis has never been so prolonged. Leading brokerage companies in the field of sea shipping and maritime experts across the world agree that the shipping market will recover in the next few years,” said Tĩnh.
Vinalines has synchronously adopted many solutions including comprehensive financial restructuring, especially the purchase of debt from banks based on the principle of the market; converting debt into capital contributions and paying debt by investment in projects that Vinalines plans to divest; thoroughly handling non-effective assets; reducing costs and divestment, even breaking a number of companies; focusing on developing markets and alliances between shipping firms to raise competitiveness; and improving the quality of production and trade management.
Over the past four years, focusing on comprehensive restructuring from 2013 to 2017, Vinalines has balanced its operations and profitability in 2016 and 2017.
Alliances and new package service
Recent two-year results of Vinalines show that even though seaports and maritime services have seen strong growth and are profitable, it is only enough for shipping operations. Parallel with the restructuring of the fleet, comprehensive financial restructuring and cost reduction, research to seek new business directions for shipping enterprises has become an urgent survival task.
“Vinalines has paid much attention to linking member shipping companies to increase resources, improve competitiveness and open new shipping routes in past years,” said Tĩnh.
Tĩnh offered a container shipping route to Hong Kong as an example of a successful alliance. The route was opened recently thanks to a partnership between two Vinalines members: Vinalines Container Shipping Company (Vinalines Container) and Biển Đông Shipping Company Ltd. Accordingly, the container ships of these two companies will carry some 1,800 TEUs (twenty-foot equivalent units) per 14-day round trip (HCM City-Hải Phòng-Hong Kong-Hải Phòng-HCM City) through Tân Vũ and Tân Thuận ports in Việt Nam and HIT Port in Hong Kong.
This is a new service in the model of an "alliance of shipping firms in the world" to maintain the regular schedule of ships at ports, said Tĩnh.
Following this alliance model, members of Vinalines, including Vinalines Shipping Company, Vietnam Shipping Company (Vosco), Vinaship and Đông Đô Marine JSC, signed a framework agreement on fertiliser transportation with giant Malaysian corporations such as Petronas Chemicals Marketing Ltd and Hemat Marine Sdn Bhd.
Under the agreement, the Vinalines shipping vessel fleet will transport fertiliser from Malaysia to Thailand and the Philippines, with an estimated transportation volume of 1-2 million tonnes per year.
In June 2017, Vinalines Container opened a new waterway service on barges on the route between Hải Phòng and Việt Trì, with a weekly capacity of 2-3 barges departing from Hải Linh Port to Hải Phòng. In the Cửu Long Mekong Delta, the company has also used two-way shipping barges from ports in the Cái Cui, Hoàng Diệu and Trà Nóc areas, transiting at ports in HCM City, such as Tân Thuận, Cát Lái, VICT, Bến Nghé and Dầu thực vật, before moving to the central and northern provinces and vice versa.
“The reopening of this waterway route is part of a logistics package, including port-shipping-maritime services, that Vinalines is implementing to increase its added value and contribute to significantly reducing the pressure on the road system under the direction of the Ministry of Transport,” said Tĩnh.
Development scale to 2030
Vinalines has currently contributed capital in 14 seaport enterprises that manage a total length of more than 13km of wharves, which accounts for some 30 per cent of the total length of wharves in the country, and is capable of receiving over 70 million tonnes of goods per year, some 20 per cent of the national port system’s capacity.
In terms of sea transport, by 2020, Vinalines expects to carry about 1.85 million tonnes. The average age of the ship fleet, including 17 per cent of container ships, 26 per cent of oil tankers and 57 per cent of bulk cargo, will be between 10 and 12 years.
Regarding logistics, this service is one of three key areas of development for Vinalines, aiming to complete and put into use the logistics infrastructure including seaports and goods distribution centres, logistics centres and shallow ports from the northern region to southern region, with total warehouse space of about 5 million square metres across the country.