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Vinashin cuts 49 investment projects
The Vietnam Shipbuilding Industry Group (Vinashin), a large economic group, which has been criticised for jumping into too many unfamiliar business fields, has released a decision to cancel 49 projects which have the estimated investment capital of VND6,500bil. Vinashin’s Chairman Pham Thanh Binh explains the decision.
Does Vinashin’s decision to cancel 49 projects mean that it has admitted a mistake in making investments in too many projects and business fields?
In fact, these are the projects aiming to develop supporting industries which serve the shipbuilding industry. We are striving to master the shipbuilding industry, from making hulls to every part of ships.
Vinashin now has over 30 shipbuilding yards, while we have signed contracts on building ships with foreign partners worth $12bil which will be implemented through 2012. We need to make investments in order to fulfill the contracts, and master the shipbuilding industry.
You have mentioned the investment projects in your main business field, shipbuilding. Are there any investment projects in other business fields in the said 49 projects you have cancelled?
In fact, Vinashin’s only outward investment field is insurance. However, making investment in insurance is not a risky investment. I have to say that economic groups, like any other companies, need to make investments in any field they think can bring profit.
We actually had the intention of making investments in real estate, finance and banking and aviation sectors. However, we have decided to cancel investments after considering the current situation.
Could you please tell us the actual figures about Vinashin’s investments in non-forte business fields?
4.7% of total investments, a very modest figure. Our total investments have reached VND50tril ($3.125bil). This is the figure we have reported to the government.
How many investment projects is Vinashin executing?
We planned for 70 big investment projects, including the 49, and other smaller projects. The 21 projects are the ones we must implement, because they serve the building of the contracted ships. We need to obtain the export turnover of $500mil for 2008, which will help create an impetus for us to gain $1bil next year.
The 21 projects are ones on shipbuilding, making steel for shipbuilding and producing ship engines, and establishing vocational schools.
How will the project cancellations affect the group’s implementation of its development plan?
Of course, we will have to overcome a lot of difficulties. This may cause the delay of ship deliveries to partners.
We are striving to get the growth rate of over 50% this year. Vinashin is aiming at 4th position among the world’s biggest shipbuilders, while it was ranked 11th five years ago.
Could you please give us more details about the steel project in Van Phong bay Vinashin once planned to undertake with the South Korean partner Posco?
We will not make capital contributions to the project. We may get involved in the project in the future, but we will not make a capital contribution.
We have been taking part in some projects with our brand names. We do not contribute capital, but the projects can operate under the technologies of Vinashin.
Not many economic groups and general corporations have decided to cut investments as per request of the Prime Minister. What is your comment about this?
I think other corporations are also trying to cut investments, but in some cases, they cannot stop projects. For example, power plant projects should not be stopped when Vietnam is lacking electricity. Projects under construction also should not be stopped as the upcoming rainy season will spoil the materials.
VNN
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