mai hien

Maersk drops Chennai, India's east coast port eyes transshipment rescue
Monday, 19 November 2018 02:02

NOW that Maersk Line has dropped Chennai because of poor productivity, the biggest port on the east coast of India is hoping transshipment will cushion the abandonment by the world's biggest shipping line.

Chennai is slowly but steadily establishing a footprint in transshipment handling, with that volume increasing to 44 TEU in October, from 14 TEU in September, after breaking in to that market with four TEU in July, according to new port data gathered by IHS Media.

Lending substance to Chennai's hope, is Delhi's liberalised cabotage policy that allows foreign-flag ocean carriers to transport laden cargo/empty containers between Indian ports, enacted May 21.

Add to that, the port's tariff discount programme for vessels handling transshipment cargo, which started July 1.

Yet realisation is some way off. Chennai's October volume declined seven per cent to 140,500 TEU, from 150,444 TEU in September.

However, thanks to intermodal train service improvements - including a shuttle operation between Chennai and Tondiarpet - October rail volume remained relatively flat month to month at 9,180 TEU, statistics show.

Maersk shifted its weekly, intra-Asia Chennai Express Service (CHX) from Chennai to Ennore, 15 miles to the north, a change that began with the Maersk Leonidio call on October 20.

Many loss-making projects get deeper in the red
Thursday, 15 November 2018 09:26

Of the 12 loss-making projects under the jurisdiction of the Ministry of Industry and Trade, only two have reported profits and most other projects had their debts restructured after incurring more bad debts, according to a report submitted by the ministry to the National Assembly.

Among the six operational plants, two plants are making profits, with DAP No. 1-Haiphong fertilizer plant recording a profit of VND147.7 billion in the January-August period and Viet Trung steel plant earning a profit of VND527.24 billion.

The four remaining plants have seen losses being reduced compared with the same period last year. In particular, Ha Bac fertilizer plant has incurred losses of VND203 billion; DAP No. 2-Lao Cai fertilizer plant, VND110.78 billion; Ninh Binh fertilizer plant, VND701.85 billion; and the Dung Quat shipbuilding project, VND61.61 billion.


However, among the three projects with suspended operations, the Dinh Vu polyester plant has resumed three production lines. Meanwhile, the Quang Ngai and Binh Phuoc ethanol projects are ready for operation once market conditions become favorable.

As for the three projects under construction, while the Phuong Nam pulp mill is working to put its assets and inventories up for auction, the Phu Tho ethanol plant is facing difficulties as PVOil as its main shareholder (holding a 39.76% stake) and external shareholders (holding 60.24%) do not inject more capital, preventing the project from proceeding.

Besides this, the Thai Nguyen iron and steel plant has yet to settle engineering, procurement and construction contract disputes with the Chinese main contractor and subcontractors.

As required by central authorities, the handling of these State-invested projects shall follow market principles, and they would not receive any more capital from the State.

Most projects and businesses of this kind have had their payment times, periodic payments and interest rates adjusted.

Banks’ risk provisions, set aside for credit supplies to these businesses as of June 30, amounted to VND5.536 trillion, up VND427 billion against January 31, as many loans turned bad debts.

Seventeen commercial banks and one financial company had supplied credit to the 12 projects, at a combined VND20.943 trillion as of the middle of the year, a VND96 billion increase from last January. Of this total, medium-term loans made up VND17.211 trillion (82%) and short-term loans, VND 3.732 trillion (18%).

Vietnam Development Bank (VDB) alone has funded seven of the 12 projects. The bank has so far recovered 30.9% of the principal debt in dong and 34.9% of debt in U.S. dollars and accumulated interest.

Principal outstanding loans at VDB for these enterprises were recorded at VND10.118,846 trillion and US$1.69 million.

The DAP No. 1 fertilizer plant is the only one to have paid off both principal and interest sums to VDB.

As the State will not provide further capital for these projects, given their main shareholders are State groups and corporations, investors are having difficulty in mobilizing capital, particularly for the fertilizer production projects of Vietnam National Chemical Group.

Need for logistics space at all-time high: JLL
Wednesday, 14 November 2018 02:32

The reliance and need for logistics space was at an all-time high, driven by advancements in the e-commerce sector, according to real estate and investment management services firm Jones Lang Lasalle (JLL).

JLL said that logistics were a crucial component of the Vietnamese e-commerce market to succeed and reach its full potential, adding that many foreign logistics providers and e-commerce operators were making efforts to offer e-logistics and meet the rapidly growing demand.

With considerable growth in smartphone penetration in major cities, the e-commerce market would growth significantly as the mobile shopping trend kept increasing every year, resulting in more pressure on the logistics industry and increasing demand for logistics space, according to Stephen Wyatt, country head of JLL Vietnam.

“There is no doubt that major e-commerce players will improve their offerings and further develop and expand their logistics and supply chain network in global. This, along with the projected growth in the e-commerce sector, will ultimately mean an increasing volume of physical goods circulating – and industrial space is at the forefront in capturing the positive spillovers from this expansion,” he said.

Viet Nam’s e-commerce market was forecast to grow at 32 per cent per year from 2018-22, according to market research firm Euromonitor. It was also anticipated that around 30 per cent of Viet Nam’s population would shop online by 2020.

Airbnb of logistics?

The growth of e-commerce meant that an enormous amount of goods in the warehouse must be circulated and transported in the shortest possible time.

According to JLL, the relentless rise of same-day delivery had merchants on the hunt for warehouse space close to their urban customer base.

"Because customers today demand such fast delivery when they order online, companies need more smaller locations rather than fewer larger locations," said Rich Thompson, who leads the global Supply Chain & Logistics Solutions team at JLL. "At the moment, this isn’t really the way things work."

"The Airbnb model for industrial warehousing space allows companies to be nimble enough to respond to seasonal changes and compete in the age of e-commerce," Thompson said.

"The on-demand warehousing market for industrial warehousing is relatively new and most companies are just beginning to understand how it works," Thompson says.

According to Wyatt, with the strong demand from the e-commerce sector, there was a rising requirement for smaller/flexible warehouse facilities for the fastest "last mile" delivery.

“We believe the flexible approach to warehousing could be very successful in the Vietnamese market,” he said, adding that a flexible warehouse space solution could be the answer to a number of existing problems in the industrial sector.

“Industrial space in the country has high occupancy rates and rents, if a flexible approach enter the market, I’m sure there will be strong demand from many businesses,” he said.

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