CIENCO4 and its strategy to become a multi-industry, multi-sector corporation.
Having undergone more than 61 years of construction and development, CIENCO4 has become a multi-industry, multi-sector corporation and a strong and reputable contractor in the construction sector in Vietnam. Currently, CIENCO4 is a non-state-owned enterprise, listed on the Vietnam Stock Exchange (stock code C4G), with over 30,000 shareholders.
Hong Phuong1/12/2024
From a state-owned corporation, CIENCO4 pioneered privatization to adapt to the integration process, expanding job opportunities and business areas. Over more than 61 years of development, CIENCO4 has become a multi-industry, multi-sector group and a strong and reputable contractor in the construction sector in Vietnam. Currently, CIENCO4 is a non-state-owned enterprise, listed on the Vietnam Stock Exchange (stock code C4G), with over 30,000 shareholders.
Over 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 chapters in its history during the period of integration and development.
In the early 1960s, under conditions of a temporarily divided country, the Ministry of Transport was entrusted by the Party and State with arduous tasks: healing the wounds of war, constructing a series of vital transportation routes, and ensuring traffic flow for the Southern battlefield. On December 27, 1962, in Hanoi, the Government issued Decision No. 1477/QD-CP establishing the Construction Department, under the Ministry of Transport. This was the predecessor unit of today's CIENCO4 Group.
In its early days, the Department of Construction had a small staff of officials, engineers, and workers, but it made significant contributions to the construction of roads, railways, and waterways in many localities in the North, especially the vital transportation routes in the former Zone 4, from Thanh Hoa to Quang Binh. The Department of Construction was considered a direct reserve unit for Group 559, contributing manpower and resources to open the legendary Truong Son Trail.
In June 1965, the Construction Department was transferred from Hanoi to Nghe An, renamed Construction Department I, with the main task of constructing and ensuring key transportation routes from Thanh Hoa to Vinh Linh - Quang Tri, directly serving the resistance war against the US to save the country. Born amidst the brutal realities of war, bearing the heavy responsibilities entrusted by the Party and the State, during the years of the resistance war against the US to save the country, the Construction Department, and later Construction Department I, fulfilled its glorious mission, contributing to the final victory of the Vietnamese nation in liberating the South and unifying the country.
With the liberation of the South and the reunification of the country, a period of peace and national reconstruction began. Construction Department I was renamed Construction Joint Enterprise I, focusing its efforts on overcoming the consequences of war and restoring the economy. Many key projects that had been destroyed were restored, such as Nhat Le Port, Ben Thuy Port, Cam Bridge, Cua Lo Port, and especially the construction of bridges and the Thong Nhat railway. At the end of 1982, Construction Joint Enterprise I was renamed the Union of Construction Enterprises for Transportation Infrastructure No. 4.
Entering the period of reform, in 1991 the Ministry of Transport decided to separate the basic construction force within the Union to establish the Central Transport Construction Corporation. In December 1995, the Corporation was re-established and renamed the Transport Construction Corporation No. 4 (CIENCO4).
On August 22, 2007, the Ministry of Transport issued a decision to establish the parent company - Construction Corporation No. 4. From July 1, 2010, the parent company - the Corporation - was transformed into a Limited Liability Company with the Ministry of Transport as the sole owner. Implementing enterprise restructuring, from October 2012, the Corporation received four additional units from the Vietnam Road Administration, bringing the total number of members to 26 units, with over 7,500 cadres, workers, and employees, and offices in six provinces and cities nationwide. The annual growth rate is 10-15%. The value of production in 2000 reached VND 1,058 billion, increasing to VND 4,242 billion in 2010 and over VND 7,000 billion in 2012, a 6.5-fold increase compared to 2000.
Following the policy of the Government and the Ministry of Transport, CIENCO4 was the first unit in the transport sector to complete the equitization of its enterprise on June 2, 2014, with the new name Construction Corporation No. 4 - JSC.
Having undergone the equitization process since 2014, as the first enterprise to do so, the company faced numerous difficulties: organizational stability was lacking, employee sentiments and aspirations were fluctuating, and there wasn't enough time to define a clear strategy and find a unified voice. Furthermore, the market was in decline, and capital and the number of transportation projects decreased sharply, especially during the 2015-2020 period.
CIENCO4's revenue declined. With declining revenue, the challenge was to maximize savings to sustain production and business operations. Recognizing this, CIENCO4 Group decided to strengthen corporate governance. The system of member units was restructured. Some units were dissolved, while others were merged or privatized to streamline the organization. The parent company was also adjusted to reduce the number of departments and increase responsibilities, allowing one person to handle multiple tasks. As a result of these strategies, corporate management costs decreased by more than half compared to before.
In particular, CIENCO4 seized the opportunity and successfully continued to increase its capital, creating momentum to maintain financial stability, increase capital scale, and enhance the value of the enterprise: At the beginning of 2015, CIENCO4 increased its charter capital from VND 600 billion to VND 720 billion. On June 15, 2016, CIENCO4 successfully issued 28 million shares, raising its charter capital to VND 1,000 billion, becoming one of the enterprises with the largest charter capital in the transportation infrastructure construction sector.
On April 22, 2017, Construction Corporation No. 4 - JSC officially transformed into CIENCO4 Group. In March 2022, CIENCO4 Group completed the issuance of over 112 million shares to existing shareholders at a ratio of 1:1, increasing its charter capital to over VND 2,200 billion. In May 2023, CIENCO4 Group continued to complete the issuance of over 112 million shares to existing shareholders at a ratio of 2:1. Recently, CIENCO4 successfully issued over 20 million shares as dividend payments to shareholders, increasing its charter capital from VND 3,370 billion to VND 3,573 billion.
The corporation considers the application of advanced technology in the construction of transportation projects as a vital factor. CIENCO4 is currently a leading unit in the transportation industry in researching and applying the latest technologies such as: cable-stayed bridge construction technology, cantilever casting technology with large spans of 150m; conventional reinforced concrete arch bridge construction technology, prestressed reinforced concrete box girder technology using fixed or mobile formwork scaffolding; bored pile construction technology with diameters up to 2m and depths up to 100m, SPSP steel pipe piles...
In road and airport construction, CIENCO4 Group also masters advanced technologies such as: soil stabilization technology using methods like sand piles and drainage wicks; and cement concrete pavement construction technology using specialized paving machines, etc.
In tunnel construction, the NATM mountain tunnel construction technology and slope protection technology using soil anchors and sprayed concrete are employed.
Other modern technologies have also been researched and applied by CIENCO4's engineering team, such as: Jet Grouting technology for treating weak soil in the Trung Hoa interchange tunnel; Bottom-up technology for constructing deep foundation pits with a maximum excavation depth of up to 32m at the Ben Thanh - Suoi Tien Metroline project; technology for constructing the Yen Xa Wastewater Treatment Plant; Barrette diaphragm wall construction technology; Cua Lo deepwater port construction technology; large-diameter CDM pile construction technology, etc.
Many large and technically complex projects have been successfully implemented thanks to new equipment and technology, such as: the extradosed construction technology for hybrid cable-stayed girder bridges at An Dong Bridge (Ninh Thuan); the slipform technology - MSS, applied for the first time in Vietnam at Thanh Tri Bridge (Hanoi); the construction of nearly 100m high bridge piers at Pa Uon Bridge; the Phuoc Khanh cable-stayed bridge with a pier height of nearly 140m above water level, the tallest bridge pier in Vietnam to date; and the 3D space-frame reinforced concrete arch bridge technology with the largest span in Vietnam at Co Co Bridge, Da Nang city.
Over the years, while many CIENCO-affiliated businesses have faced difficulties and disappeared after privatization, CIENCO4 has continued to maintain its brand presence on many major national projects. CIENCO4 has been chosen by the Government and the Ministry of Transport to participate in the construction of two component projects of the North-South Expressway Eastern section (2021-2025): Bung - Van Ninh and 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 transport projects across the country, such as: Package XL-02 of the My Thuan - Can Tho expressway, valued at over 705 billion VND; Package 2-XL of the Phan Thiet - Dau Giay expressway, valued at over 1,910 billion VND; Package XL04 of the Nghi Son - Dien Chau section of the North-South East Expressway construction project, valued at over 1,139 billion VND, and always completed on schedule.
In the investment package for the Dien Chau - Bai Vot section of the North-South Expressway under the public-private partnership (PPP) model, valued at over VND 9,249 billion, CIENCO4 Group was one of the selected investors in the joint venture. Furthermore, it has made its mark on projects such as: the Cam Lo - La Son section of the North-South Expressway; the Mai Dich - Nam Thang Long section of Ring Road 3 (Hanoi); the Cua Hoi Bridge; the renovation of the traffic intersection cluster west of the Tran Thi Ly Bridge; the Ben Thanh - Suoi Tien metro line; and the Ben Luc - Long Thanh Expressway. Building its position in road and bridge construction, CIENCO4 is also increasingly asserting its reputation in constructing specialized projects requiring high technology and engineering, such as airport runway upgrades (Tan Son Nhat, Cam Ranh, Phu Quoc, Cat Bi, etc.). Most recently, it was the contractor for the mega-project of Long Thanh International Airport.
CIENCO4 has also made its mark on a series of major urban underpass projects, notably the Le Van Luong underpass (opened in October 2022), the underpass belonging to the project to renovate the traffic intersection cluster west of Tran Thi Ly Bridge (Da Nang, opened in March 2022); the Thanh Xuan underpass; and the Trung Hoa underpass (Hanoi, opened in 2016). Most recently, CIENCO4 was again selected as the contractor for the construction of the Kim Dong - Giai Phong intersection underpass (Hanoi) worth over 560 billion VND.
At the beginning of the 21st century, BOT and BOO investment models were still relatively new in Vietnam, especially in the field of infrastructure construction.
These forms offer the advantages of minimizing procedures during the investment process, shortening construction time, saving costs, and bringing the project into operation sooner. CIENCO4 has partnered with Thang Long Construction Corporation to invest in and construct the Yen Le Bridge under the BOT (Build-Operate-Transfer) method with a total value of 75 billion VND.
Also under the BOT model, in 2003, CIENCO4 continued to invest in the construction of the National Highway 1 bypass section around 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 sector to dare to and successfully implement the BOT investment model." CIENCO4's commitment to this new investment model is primarily about leveraging the capabilities of a large transport enterprise, realizing the government's and the Ministry of Transport's policy of mobilizing maximum private resources to "work shoulder to shoulder" with the State to accelerate the development of connecting infrastructure.
This is also an opportunity for CIENCO4 to further affirm its position and reputation, expanding its business in the direction of investment instead of just participating in projects as a construction contractor. Therefore, the jobs of thousands of workers are more secure and their salaries are higher.
Expanding its development cooperation trend, CIENCO4 has signed cooperation agreements with a number of reputable financial and construction investors such as: Vinacapital, Vietnam Development Investment Bank (BIDV), Sumitomo Mitsui Group (Japan), Hemaraj Group, JFE Group (Japan), WBI Organization (Japan), and leading South Korean construction contractors: Hanshin, Ilsung, Kyeryoung, etc. These partners will provide corporate financial advisory services, help find financing sources for projects, and directly support investment capital in projects where CIENCO4 is the investor, as well as participate in joint ventures and bidding for ODA-funded infrastructure projects in Vietnam.
Under any circumstances, CIENCO4 always values its human resources. Over the years, generations of the group's staff and workers have strived to compete, build production, and continuously learn to improve themselves. Even more remarkably, in the context of a smaller volume of transportation projects and declining revenue, despite the lack of growth, ensuring employment, retaining staff, and never reducing salaries or benefits for its workers, engineers, and laborers has been a great success for CIENCO4, and one of the few CIENCOs in the transportation sector to achieve this.
According to General Director Nguyen Tuan Huynh: For CIENCO4 to maintain its position in terms of potential and investment capacity, the main factor remains its people. Ideas are born from people, and those ideas are implemented. Thanks to this, through many ups and downs, the enterprise has remained strong, accelerating investment while ensuring full benefits, policies, and regulations for employees, and fulfilling its responsibilities in paying taxes and insurance to the State. The group's position and potential are not only demonstrated by possessing a team of skilled engineers and workers experienced in all types of transportation projects: airports, seaports, urban tunnels, highway tunnels, urban railways, expressways, etc., but also by its revenue value, available financial resources, modern construction technologies, and capital from "similar project contracts" to compete fairly with many other large contractors.
It can be said that, in all the projects undertaken, CIENCO4 has never missed a deadline or failed to meet the criteria for quality and aesthetics.
The group's development strategy for the period 2021-2025, with a vision to 2030, is to continue maintaining its number one position in the field of transportation infrastructure investment in the Vietnamese market, moving towards integration and approaching international standards in infrastructure investment. In addition to its traditional transportation infrastructure business, CIENCO4 is also venturing into real estate and financial business. These are the three pillars that the company will focus on developing in the coming period.
