Vinashin says 15.7% of its $4.1bn orderbook axed
Aspiring shipbuilder Vietnam Shipbuilding Industry Group says 15.7% of its $4.1bn orderbook has been cancelled.
Vinashin broke into the international shipbuilding arena in late 2004 and rapidly built up a major orderbook. However, the state-owned shipyard group has been hit by the dual impact of production delays and financial difficulties for some of its customers.
Vinashin vice-director Doan Huu Dung told Lloyd’s List that the cancelled newbuildings were primarily bulk carriers but some contracts for container vessels had been cancelled also.
Mr Dung said some of its customers were facing financial difficulties, which meant they had cancelled part of their orders. For example, if an owner had ordered four vessels it would cancel two.
The other major reason behind cancellations was delays in delivery of six to eight months due to production problems at Vinashin’s yards.
One of the yards largest orders reported to worth $1bn for eight car carriers, contracted by Ray Car Carriers in May 2006, has been altered to four firm contracts and four options.
Mr Dung stressed that where a shipowner had cancelled newbuildings they had been fully refunded by the shipyard group.
Although 15.7% of orders by value have been cancelled, this does not mean all these ships will not be completed. Mr Dung said Vinashin had managed to resell some of the newbuildings that were already under construction when they were cancelled. Three handymax bulkers cancelled by an undisclosed owner had been resold, he said.
Mr Dung said the main reason for delivery delays was delays in production rather than owners renegotiating delivery dates. In particular, the yard has experienced issues at the design phase.
In some cases flaws in the design stage meant that work was done on vessels that then had to be redone, resulting in delays.
In an effort to improve the design process, Mr Dung said Vinashin was co-operating with organisations in South Korea and Finland and some design institutes. The shipbuilding group is also training designers in Poland.
On reports of indefinite delivery delays to Vinashin’s first aframax tankers, being built for Petrovietnam at Dung Huat shipyard, Mr Dung said work was continuing on the ships.
Vinashin is planning to launch the first vessel in February or March next year. One of the problems has been delays in construction of the yard at Dung Huat, which is being built at the same time as the newbuildings.
The state-owned shipbuilder has also faced issues with replacing equipment damaged in the production process. With 70%-80% equipment imported, Vinashin had faced delays of around three months for replacement equipment, he said.
Earlier this year the shipbuilder also had problems opening letters of credit to buy equipment from overseas.
The shipbuilding group has received $500m in funding from the government to ensure it can continue work on newbuilding contracts on hand.
Vinashin operates a network of 20 shipyards across Vietnam.
Vinashin broke into the international shipbuilding arena in late 2004 and rapidly built up a major orderbook. However, the state-owned shipyard group has been hit by the dual impact of production delays and financial difficulties for some of its customers.
Vinashin vice-director Doan Huu Dung told Lloyd’s List that the cancelled newbuildings were primarily bulk carriers but some contracts for container vessels had been cancelled also.
Mr Dung said some of its customers were facing financial difficulties, which meant they had cancelled part of their orders. For example, if an owner had ordered four vessels it would cancel two.
The other major reason behind cancellations was delays in delivery of six to eight months due to production problems at Vinashin’s yards.
One of the yards largest orders reported to worth $1bn for eight car carriers, contracted by Ray Car Carriers in May 2006, has been altered to four firm contracts and four options.
Mr Dung stressed that where a shipowner had cancelled newbuildings they had been fully refunded by the shipyard group.
Although 15.7% of orders by value have been cancelled, this does not mean all these ships will not be completed. Mr Dung said Vinashin had managed to resell some of the newbuildings that were already under construction when they were cancelled. Three handymax bulkers cancelled by an undisclosed owner had been resold, he said.
Mr Dung said the main reason for delivery delays was delays in production rather than owners renegotiating delivery dates. In particular, the yard has experienced issues at the design phase.
In some cases flaws in the design stage meant that work was done on vessels that then had to be redone, resulting in delays.
In an effort to improve the design process, Mr Dung said Vinashin was co-operating with organisations in South Korea and Finland and some design institutes. The shipbuilding group is also training designers in Poland.
On reports of indefinite delivery delays to Vinashin’s first aframax tankers, being built for Petrovietnam at Dung Huat shipyard, Mr Dung said work was continuing on the ships.
Vinashin is planning to launch the first vessel in February or March next year. One of the problems has been delays in construction of the yard at Dung Huat, which is being built at the same time as the newbuildings.
The state-owned shipbuilder has also faced issues with replacing equipment damaged in the production process. With 70%-80% equipment imported, Vinashin had faced delays of around three months for replacement equipment, he said.
Earlier this year the shipbuilder also had problems opening letters of credit to buy equipment from overseas.
The shipbuilding group has received $500m in funding from the government to ensure it can continue work on newbuilding contracts on hand.
Vinashin operates a network of 20 shipyards across Vietnam.