CIENCO4 and the strategy to become a multi-industry, multi-field corporation
After more than 61 years of construction and development, CIENCO4 has become a multi-industry, multi-field corporation and a contractor with a strong and prestigious brand in the construction and installation sector in Vietnam. Up to now, CIENCO4 is an enterprise without State capital, has been listed on the Vietnam Stock Exchange (stock code C4G), with more than 30,000 shareholders.
Hong Phuong1/12/2024
From a State-owned Corporation, CIENCO4 has pioneered equitization to adapt to the integration process, expanding job opportunities and business fields. After more than 61 years of construction and development, CIENCO4 has become a multi-industry, multi-field corporation and a contractor with a strong and prestigious brand in the construction and installation sector in Vietnam. Up to now, CIENCO4 is an enterprise without State capital, has been listed on the Vietnam Stock Exchange (stock code C4G), with more than 30,000 shareholders.
After more than 61 years of construction and development (December 27, 1962 - December 27, 2024), inheriting the heroic tradition of the Construction Department during the war, CIENCO4 Group has been writing new pages of history in the period of integration and development.
In the early 60s of the last century, in the condition of the country being temporarily divided, the Transport sector was assigned by the Party and the State with heavy tasks: Healing post-war wounds, building a series of vital routes, ensuring traffic for the Southern battlefield. On December 27, 1962, in Hanoi, the Government issued Decision No. 1477/QD-CP to establish the Construction Department, under the Ministry of Transport. This is the predecessor of CIENCO4 Group today.
At the beginning of its establishment, the staff, engineers and workers were still small, but the Construction Department made an important contribution to the construction of roads, railways and waterways in many localities in the North, especially the main traffic routes in the old Zone 4, from Thanh Hoa to Quang Binh. The Construction Department was considered a direct reserve rear unit for Group 559, contributing human and financial resources to open the legendary Truong Son route.
In June 1965, the Construction Department was transferred from Hanoi to Nghe An, renamed Construction Department I with the main task of building and ensuring key traffic routes from Thanh Hoa to Vinh Linh - Quang Tri, directly serving the resistance war against the US to save the country. Born in the brutal war, having to shoulder the important responsibilities entrusted by the Party and State, during the years of resistance war against the US to save the country, the Construction Department and then Construction Department I completed their glorious mission, contributing with the entire Vietnamese people to the final victory of completely liberating the South and unifying the country.
The South was liberated, the country was unified, and entered a period of peace and national construction. The Construction Department I was renamed the Joint Construction Enterprise I, focusing on overcoming the consequences of war and restoring the economy. Many key projects that were destroyed were restored, such as Nhat Le Port, Ben Thuy Port, Cam Bridge, Cua Lo Port, especially the construction campaign of Thong Nhat bridges and railways. At the end of 1982, the Joint Construction Enterprise I was renamed the Union of Transport Construction Enterprises 4.
Entering the renovation period, in 1991 the Ministry of Transport decided to separate the basic construction force in the Union to establish the Central Transport Construction Corporation. In December 1995, the Corporation was re-established and renamed the Transport Construction Corporation 4 (CIENCO4).
On August 22, 2007, the Ministry of Transport decided to establish the Parent Company - Transport Construction Corporation 4. From July 1, 2010, the Parent Company - Corporation was transformed into a one-member limited liability company owned by the Ministry of Transport. Implementing corporate restructuring, from October 2012, the Corporation received 4 more units from the Vietnam Road Administration, increasing the total number of members to 26 units, with more than 7,500 officers, employees, and workers, headquartered in 6 provinces and cities nationwide. The annual growth rate is from 10-15%. The output value in 2000 reached 1,058 billion VND, then by 2010 it increased to 4,242 billion VND and in 2012 it reached over 7,000 billion VND, an increase of 6.5 times compared to 2000.
Implementing the policy of the Government and the Ministry of Transport, CIENCO4 is the first unit in the Transport industry to complete the equitization of the enterprise from June 2, 2014, with the new name of Traffic Construction Corporation 4 - JSC.
Having undergone the equitization process since 2014, as the first enterprise to be equitized, the enterprise faced many difficulties: the organization was not yet stable, the thoughts and aspirations of the employees were still fluctuating, there was not much time to define a clear strategy and find a unified voice. On the other hand, the market was in a downward trend, capital sources and the number of transportation projects decreased sharply, especially in the period 2015-2020.
CIENCO4's revenue declined. With the decrease in revenue, the problem was to save as much as possible to have resources to nurture production and business activities. Determining that motto, CIENCO4 Group determined to strengthen corporate governance. The system of member units was restructured. Some units had to be dissolved, some were merged and equitized to streamline the apparatus. The parent company was also adjusted in the direction of reducing the number of departments and offices, increasing responsibilities, one person could do many jobs. From the strategies at that time, corporate management costs were reduced by more than half compared to before.
In particular, CIENCO4 has taken advantage of the opportunity to continue to successfully increase capital, creating momentum to maintain financial stability, increase capital scale and enhance enterprise value: In early 2015, CIENCO4 increased its charter capital from 600 billion VND to 720 billion VND. On June 15, 2016, CIENCO4 continued to successfully issue 28 million shares, increasing its charter capital to 1,000 billion VND, becoming one of the enterprises with the largest charter capital in the field of basic traffic construction.
On April 22, 2017, the Transport Construction Corporation 4 - JSC officially transformed into CIENCO4 Group. In March 2022, CIENCO 4 Group completed the issuance of more than 112 million shares to existing shareholders at a ratio of 1:1, increasing its charter capital to more than VND 2,200 billion. In May 2023, CIENCO4 Group continued to complete the issuance of more than 112 million shares to existing shareholders at a ratio of 2:1. Recently, CIENCO4 successfully issued more than 20 million shares to pay dividends to shareholders, increasing its charter capital from VND 3,370 billion to VND 3,573 billion.
The Group considers the application of advanced technology in the construction of traffic works as a vital factor. CIENCO4 is also the leading unit in the Transport industry in researching and applying the latest technologies such as: Technology for building cable-stayed bridges, cantilever technology with a large span of 150m; Technology for constructing conventional reinforced concrete arch bridges, technology for prestressed reinforced concrete box girders using fixed or mobile formwork scaffolding; Technology for constructing bored piles with a diameter of up to 2m and a depth of up to 100m, SPSP steel pipe piles...
In road and airport construction, CIENCO4 Group also masters advanced technologies such as: Technology for treating weak soil by methods: Sand piles, wick drains; Technology for constructing cement concrete pavement with specialized paving machines, etc.
In tunnel construction, there is NATM mountain tunnel construction technology, slope protection construction technology using soil anchor method and shotcrete.
Other modern technologies are also researched and applied by CIENCO4's engineering team such as: Weak soil treatment technology using Jet Grouting in Trung Hoa intersection tunnel, deep foundation pit construction using Bottom-up technology with the largest excavation depth of up to 32m at the Ben Thanh Suoi Tien Metroline project; Yen Xa Wastewater Treatment Plant construction technology; Barrette diaphragm wall construction technology; Cua Lo deepwater port construction technology; Large diameter CDM pile construction technology,...
Many large, technically complex projects, thanks to new equipment and technology, have been effectively implemented, such as: extradosed technology for the construction of mixed cable girder bridges at An Dong Bridge (Ninh Thuan); Slip formwork technology - MSS applied for the first time in Vietnam at Thanh Tri Bridge (Hanoi); Construction of a nearly 100m high bridge pier at Pa Uon Bridge, Phuoc Khanh cable-stayed bridge with a pier height of nearly 140m above the water surface, the highest bridge pier in Vietnam to date; 3D reinforced concrete arch bridge technology with the largest span in Vietnam at Co Co Bridge, Da Nang City.
In recent years, many CIENCO enterprises have encountered difficulties and disappeared after equitization, CIENCO4 has continued to maintain its brand on many major projects in the country. CIENCO4 has been "chosen" by the Government and the Ministry of Transport to participate in the construction of 2 component projects of the North - South expressway construction investment project in the Eastern region in the period of 2021-2025: Bung - Van Ninh, Hau Giang - Ca Mau, with a total construction value of nearly 4,000 billion VND.
The CIENCO4 brand is also present in a series of key road traffic projects across the country such as: Package XL-02 My Thuan - Can Tho Expressway, with a value of more than 705 billion VND; Package No. 2-XL Phan Thiet - Dau Giay Expressway, with a value of more than 1,910 billion VND; Package XL04 of the Nghi Son - Dien Chau section construction investment component project of the project to build a number of road sections on the North - South Eastern Expressway, with a package value of more than 1,139 billion VND and always on schedule.
In the North-South Expressway investment package, Dien Chau - Bai Vot section under the form of public-private partnership (PPP) with a value of more than 9,249 billion VND, CIENCO4 Group is one of the selected investors in the joint venture. Along with that, the imprint in the projects: North-South Expressway section Cam Lo - La Son; Ring Road 3 section Mai Dich - Nam Thang Long (Hanoi); Cua Hoi Bridge; Renovation of the traffic junction cluster west of Tran Thi Ly bridge, Ben Thanh - Suoi Tien metro; Ben Luc - Long Thanh Expressway. Building its position in road and bridge construction, CIENCO4 is also increasingly affirming its reputation in the construction of special projects requiring high technology and techniques such as airport runway upgrade projects (Tan Son Nhat, Cam Ranh, Phu Quoc, Cat Bi, ...). And most recently, it is the contractor participating in the construction of the super project Long Thanh International Airport.
CIENCO4 has also had time to set foot on a series of large urban underpass projects, typically the Le Van Luong underpass (opened to traffic in October 2022), the underpass belonging to the project to renovate the traffic intersection cluster west of Tran Thi Ly bridge (Da Nang, opened to traffic in March 2022); Thanh Xuan underpass; Trung Hoa underpass (Hanoi, opened to traffic in 2016). Most recently, CIENCO4 continued to be the contractor selected to construct the underpass at the Kim Dong - Giai Phong intersection (Hanoi) worth more than 560 billion VND.
At the beginning of the 21st century, BOT and BOO investment forms are still quite new in Vietnam, especially in the field of infrastructure construction.
These forms have the advantage of minimizing procedures during the investment process, shortening construction time, saving costs and putting the project into operation soon. CIENCO4 has cooperated with Thang Long Construction Corporation to invest in the construction of Yen Lenh bridge under the BOT method (Build - Operate - Transfer) with a total value of 75 billion VND.
Also under the BOT form, in 2003, CIENCO4 continued to invest in building the National Highway 1 bypass section avoiding Vinh city, with a total investment value of nearly 400 billion VND.
“It can be said that CIENCO4 is the first construction unit in the transport industry that dares to do and has successfully implemented the BOT investment form”. CIENCO4's commitment to the new investment form is first of all to promote the capacity of a large transport enterprise, realize the policy of the Government and the Ministry of Transport, and mobilize maximum private resources to "work together" with the State to accelerate the development of connecting infrastructure.
This is also an opportunity for CIENCO4 to continue to affirm its position and reputation, expanding its business in the direction of investment instead of just entering the project as a construction contractor. The jobs of thousands of workers are therefore more secure, with higher salaries.
Expanding the trend of development cooperation, CIENCO4 has signed cooperation agreements with a series of famous financial and construction investors such as: Vinacapital, Bank for Investment and Development of Vietnam (BIDV), Sumitomo Mitsui Group of Japan, Hemaraj Group, JFE Group (Japan), WBI Organization (Japan), leading construction contractors of Korea: Hanshin, Ilsung, Kyeryoung,... These are partners who will provide corporate financial consulting services, help find financial sources for projects and directly support investment capital for projects invested by CIENCO4, as well as joint ventures and joint bidding for ODA capital projects in the field of transport infrastructure in Vietnam.
In any circumstances, CIENCO4 always values the value of human resources. Over the years, generations of cadres and employees of the group have always strived to compete, build production, and constantly learn to improve themselves. Even more special, in the context of low traffic project volume and reduced revenue, although there is no growth, ensuring jobs, retaining people and never reducing salaries and benefits for employees, engineers and workers with CIENCO4 has been a great success and is one of the few CIENCOs in the Transport industry to do so.
According to General Director Nguyen Tuan Huynh: In order for CIENCO4 to maintain its position in terms of potential and investment capacity, the key factor is still people. From people come ideas and implement those ideas. Thanks to that, through many ups and downs, the enterprise has still firmly overcome, promoted investment but still ensured full rights, policies and regimes for employees, fully met the responsibility of paying taxes and insurance to the State. The position and potential of the group is not only demonstrated through possessing a team of skilled engineers and workers, who have experience with all types of traffic works: Airports, seaports, urban tunnels, expressway tunnels, urban railways, expressways... but it is also the value of revenue, available financial resources, modern construction technologies, "similar project contract" capital to compete fairly with many other large contractors.
It can be said that, in the projects undertaken, CIENCO4 has not missed any deadlines and failed to ensure quality and aesthetic criteria.
The group's development strategy for the period 2021 - 2025, with a vision to 2030, is to continue to maintain its No. 1 position in the field of transport infrastructure investment in the Vietnamese market, moving towards integration and approaching the international level in the field of infrastructure investment. In addition to the traditional field of transport infrastructure, CIENCO4 also enters the field of real estate and financial business. This is the "three-legged stool" that the enterprise focuses on developing for the coming period.
