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Vietnam Prime Minister demands solutions for shipping firms

Vietnam’s Prime Minister Nguyen Xuan Phuc has asked ministries and government agencies to support marine shipping firms, reported Vietnamese media.

The Prime Minister instructed the Ministry of Transport to collaborate with the Ministry of Industry and Trade, the State Capital Management Committee and other government agencies to work with shipping companies – especially those with high shipping volumes – to improve their performance in accordance and use funding to develop their fleets.

Companies must also hasten their equitisation and strengthen their association with both domestic and foreign partners to raise their productivity and efficiency. Vietnamese shipping firms, most of which are state-owned, have been performing poorly in recent years due to ineffective corporate governance and rising competition on international markets.

The Vietnam National Shipping Lines Corporation (Vinalines), one of the biggest shipping companies in the country, reported a 9% year-on-year decline in its second quarter revenue, which stood at $239m. At the end of the quarter, the company posted a loss of 325% from the previous year. Vinalines attributed the loss to the fact that the company earned less from its dividend pay-outs and also failed to sell its assets and ships.

Read more: Vinalines buys back 75% stake in Quy Nhon port

In late May, Vinalines received back 30.3 million shares as the biggest shareholder at the Quy Nhơn Port JSC after the equitisation of the port operator was determined to be illegal. The company also had to return VND415bn to the buyer of the deal from 2013-15.

Vinalines now has stakes in 20 companies and associates in 27 other firms.