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Expansion in Vietnam… and a move into the wider ASEAN market

Expansion in Vietnam… and a move into the wider ASEAN market

26 March2018

Speaking after the symbolic ground-breaking described in an earlier report, CPC Chairman Tai Chein remarked that the day was something of a historic moment for the company: its involvement in establishing the Maxihub joint-venture not only echoed President Tsai’s promotion of the New Southbound Policy, but also marked one of its first success stories wholly centered on Taiwanese firms. The principal shareholders are Taiwan-domiciled companies and the construction part of the undertaking is managed by CTCI, Taiwan’s leading firm of consulting engineers for both domestic and overseas projects. Deploying skills at this level could well make a significant contribution to Vietnam’s future economic development and spur the cultivation of the country’s industrial talent. CPC will aim at creating more such success cases through collaboration with both domestic and foreign entities.

Chairman Tai went on to describe how the Maxihub Company has been set up to build and operate a lubricant oil blending plant together with a solvent and chemicals storage complex in Vietnam and thence from that base to explore the Southeast Asian market for those products. It combines the production technology behind CPC’s ‘Guo-guang’ brand of lubricants with the logistical, managerial and business development experience and know-how of the other joint-venture shareholders in the regional solvents and chemicals market.

This project is the second investment case for CPC under the New Southbound Policy (and also in Vietnam), the first being Daihai Petroleum Corporation – an LPG import and marketing joint-venture, located in the port city of Haiphong in northern Vietnam - along with TASCO Group, Chin Lead Company and HPI Company’s local branch. On behalf of CPC, Chairman Tai expressed the hope that the construction phase of the project would be completed on schedule and to the right level of quality. He also gave voice to the wish that all of the guests present could gather again towards the end of next year to witness Maxihub in smooth operational mode.

Next to speak were senior executives from the other shareholders. Chairman Sun of Unishine Chemical Corp. recalled how, at the beginning of the process of setting up the Maxihub Company, members of the shareholders’ working group had spared no effort in searching for a suitable site. In closing, he wished the Maxihub Company the best of success in terms of greatperformance. For his part, Mr Wu Hsu-Hsing, President of Excel Chemical Corporation, said that as well as the Daihai Petroleum Corporation and the Maxihub Company joint-ventures undertaken with CPC he looked forward to further opportunities for cooperation in the future.

With speeches by all the JV shareholders’ representatives duly delivered, there remained only the staging of a group photo of all the VIPs present before the ground-breaking ceremony was successfully brought to conclusion.

This project has its origins in plans and policies initiated by former CPC Chairman Chu Shao-Hua that were aimed at wider internationalization of the company’s business presence. Among those was one calling for a strategy of expansion in South-east Asia; and this resulted in CPC actively increasing the number of its sites in that region. In March 2009 he instructed CPC’s Lubricants Division and Joint Venture Business Division to collaborate on setting up a tank farm storage complex in Vietnam, and it was that which launched the project and with it the opportunity for cooperation between the present joint-venture shareholders.

It was not until early 2015 that the Maxihub Company actually came into being, when its shareholders signed a joint-venture agreement. In the interim 5-year period, members of the shareholders working group flew to Vietnam no less than six times to find a suitable site, design the joint-venture’s structure and apply for an investment license. That signing marked the formal start of the project’s pre-operational phase and triggered the selection and appointment of the requisite qualified professional managers. So it took nine years’ solid effort for the project to finally blossom.

Setting up the Maxihub Company took several years, the efforts of executives and their colleagues at all levels and perseverance by its joint-stock shareholders. The most important thing now is to ensure that it runs smoothly. To that end, the shareholders must fully coordinate their activities, communicate with each other effectively and provide proper support to its employees in Vietnam. Done well, all this will help the Maxihub Company achieve operational sustainability.