Shipbuilder Vinashin struggles to regain footing as revenues plunge

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Hoa Sen, a ship that caused huge losses to Vinashin

Vietnam's state shipbuilding group Vinashin, which almost collapsed under huge debts in 2010, continued to struggle this year as revenues in the first nine months fell sharply, equal to only 15.8 percent of its full-year target.

The group's revenues had reached only VND1.48 trillion (US$72 million) by the end September, down 71 percent from the same period last year, news website VnExpress reported Friday, citing a report from the Ministry of Transport.

According the ministry, Vinashin is working on several contracts to build container ships, after delivering eight vessels earlier this year.

But overall the group continued face many difficulties.

The ministry said other companies in the transport industry, including Hanoi-based automaker Vinamotor, have also seen revenues and profits fall this year due to low demand and increased competition.

Vinashin is in the middle of a large scale restructuring that started in late 2010, after it accumulated debts totaling VND86 trillion ($4.4 billion), raising concerns about state-owned enterprises in Vietnam.

The company has been ordered to focus on shipbuilding and repair and divest from all non-core business activities.

The government said in a report sent to legislators this week that the gains from state-owned companies were not large enough considering the resources given to them.

"Some groups and corporations made losses and did not use state capital and land effectively," it said, naming Vinashin and state shipper Vinalines as two examples of "wasteful" companies.

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