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|Gemadept Corporation has built a fruitful partnership with South Korea’s CJ Logistics|
Gemadept Corporation, the country’s largest port and logistics owner and operator, recently announced its plans for 2018 and subsequent years. The corporation, which is listed on the Ho Chi Minh Stock Exchange, stressed that it has an equal partnership with South Korea’s CJ Logistics, which bought 49 and 51 per cent each in two subsidiaries – Gemadept Shipping and Gemadept Logistics Holdings, respectively – last October. Total value of the transaction is less than 15 per cent of the corporation’s total asset.
CEO Do Van Minh emphasised that in the CJ-Gemadept joint venture, Gemadept would still call the shots regarding management and operations. “All decisions in this new entity have to be agreed upon by us and our South Korean partner. This is the most important part of the agreement. Thanks to Gemadept’s deep understanding of the local market and close relationship with foreign partners, both parties mutually agreed that Gemadept will keep controlling daily operation. To customers and partners, all contacts for business will remain unchanged” said Minh.
Following the agreement, Gemadept and CJ Logistics have set ambitious goals for their joint business. Specifically, CJ Gemadept is expected to double its profit within the next three years, strengthen its number-one position in Indochina and become a leading player in Southeast Asia. According to Minh, the JV will benefit from CJ’s global network and Gemadept’s extensive supply chain in Vietnam.
“We want to go international fast in logistics sector. Thus, we decided to co-operate with a strategic foreign partner. CJ Logistics shares the same vision as us and has a well-established network in all continents, making them the ideal partner,” said Minh.
Another notification is that port operation and other Gemadept’s logistics affiliates remain 100 per cent under Gemadept’s ownership and management.
In the next few years, Gemadept has set out a list of ambitious goals for its expansion in both Vietnam and overseas. Areas of focus include development of the Nam Dinh Vu port in the northern province of Haiphong for full phases. The first phase covering 20 hectares was completed this January, with an investment capital of $75 million for a berth length of 440 metres and the capacity of 600,000 TEUs. On Februay 4th, 2018, Nam Dinh Vu Port received the first vessel call. The second phase for the port will start in this June. In the south, Binh Duong port will also be further expanded this year.
Another landmark project of Gemadept remains the massive Gemalink deep-sea container terminal in the Cai Mep–Thi Vai port area in the southern province of Ba Ria Vung Tau. The first phase of this terminal, covering 33ha, requires $325 million in capital, 25 per cent of which is funded by French carrier CMA CGM S.A.
Phase one of the project is expected to kick off by end of 2019 with the capacity of 1.5 million TEUs, and when completed, Gemalink will be the only deep sea container port in Cai Mep–Thi Vai to accommodate vessels of up to 200,000 DWT.
Further ahead, Gemadept will continue expanding its ports, logistics, warehouse, transportation, and air cargo services to create full-packaged 3PL logistics and port system. “We want to build, and relentlessly expand, our integrated logistics and port system all across Vietnam to maintain our top position in these sectors,” said CEO Do Van Minh.
For business performance target, profit from core businesses of Gemadept, the first year after the co-operation with CJ is planned to achieve good growth compared to the same period. The target is to double EBT towards 2020.
Founded in 1990, Gemadept was one of the first firms to be equitised and listed on the public market. The firm has released its financial results for the entire year 2017 (before audit) with VND3.9 trillion ($177.27 million) in revenue and VND650 billion ($29.54 million) in pre-tax profit, outperforming its planned target.
Billionaire Warren Buffet was quoted as saying, ‘If you want to go fast, go alone. If you want to go far, go together.’ We do believe that with the recent cooperation between Gemadept and CJ in the logistics sector as well as Gemadept’s own goal for port development, the corporation will continue to have strong and sustainable movement in the coming time.