Dutch shipbuilders drop anchor in Song Cam port
Dutch shipbuilders drop anchor in Song Cam port
Damen, a Netherlands-based global leader in shipbuilding, has not yet completed its acquisition of a 70 per cent stake in Song Cam Shipbuilding JSC – the most profitable shipyard in Vietnam – as the stake sale is still under government consideration.
Vietnam’s Shipbuilding Industry Corporation (SBIC), which owned Song Cam, has proposed that the government allow it to separate the Song Cam shipyards into two zones before selling a 70 per cent stake in one of the zones to Damen.
In a document recently sent to the prime minister, SBIC suggested that the first zone include Ben Kien shipyard, which is located in An Hai district in the northern port city of Haiphong. The company will then sell a 70 per cent stake in this zone to Damen. Meanwhile, the second zone, which includes a small shipyard yet to be relocated, will be excluded from the deal.
Vu Anh Minh, head of the Enterprise Management Department under the Ministry of Transport (MoT), told VIR that “The ministry supports SBIC’s proposal, as the separation is expected to facilitate Damen’s future operations as well as those of Song Cam. Ben Kien is already equipped with good infrastructure for shipbuilding.”
“It is the best way to keep Damen from exiting the Vietnamese market and encourage it to expand operations in the country,” he said. “Since over 90 per cent of Song Cam’s orders come from Damen, the shipyard would face many difficulties if Damen left.”
In late October 2015, after months of consideration, the Vietnamese government gave the green light to the Dutch firm to buy a 70 per cent stake in Song Cam.
Song Cam, which has a chartered capital of VND619.69 billion ($28.43 million), with SBIC making up 90.08 per cent, and Bach Dang shipyard holding 7.54 per cent, was the first SBIC shipyard to be equitised in 2008.”
“It’s time to further reduce the state’s holdings to attract more investment in the industry,” Minh explained.
Currently, the Song Cam shipyard is the most valuable unit among SBIC’s eight subsidiaries. Song Cam has not incurred any losses over the past five years, bringing in most of the SBIC’s foreign investment thanks to its contracts with Damen. In early 2014, the Damen-Song Cam shipyard was expanded with an investment of $60 million, of which 70 per cent came from Damen.
Aside from its interest in Song Cam, the Dutch shipbuilding group earlier proposed acquiring a 49 per cent stake in another SBIC affiliate – the Ha Long Shipbuilding Company – once it is equitised. However, the equitisation has not yet been completed, as no financial settlement for the Vietnamese firm has been reached.
Damen is an international company that owns 35 shipyards and other partner yards around the world. It manufactures 150 vessels annually. The group has been a major partner of SBIC for years, negotiating all orders for the Song Cam-Ben Kien shipyard, and has pledged to ensure orders for the Ha Long shipbuilding plant through to the end of this year.
