Page 54: of Maritime Reporter Magazine (December 2015)

COUNTRY REPORT: VIETNAM

Photo: VINASHIN

Maritime Capabilities get a Natural Boost

By Joseph R. Fonseca eaning against the western nomic growth with the country’s mari- building sector consists of naval ship- centrated on bulker-building, the cen- mountain range, the long, ex- time cluster attracting considerable for- yards, shipyards of oil and gas company tral cluster specializes in both tankers tenuated country of Vietnam eign investments from all over the world. PetroVietnam, as well as private ship- and bulk, and the southern cluster in the

Lis blessed with three thousand Vietnam’s shipbuilding industry fea- building and marine equipment compa- Vung Tau area is an offshore shipbuild- km of Eastern shoreline that covers the tures among the top ? ve countries in nies which are mainly operating under ing cluster with a strong presence of entire Indo-Chinese coast. With such an terms of order book after China, South foreign ownership or co-ownership. In international companies, such as Rolls- auspicious topography it is natural to Korea, Japan and the Philippines. The all, about 150 shipyards are in operation Royce, STX, and Ezra Holdings. Vung ? nd most Vietnamese living relatively country’s government has declared the of which some 30 undertake exports. The Tau also plays a signi? cant role in Viet- near the open sea. sector one of its priorities and is invest- shipbuilding industry is said to provide nam’s offshore oil industry. It is the only

Vietnam has experienced rapid eco- ing in increasing its output capacity as over 100,000 jobs directly and about up petroleum base of Vietnam where crude nomic growth during the last two de- well as the technology level of the sector. to one million indirectly. oil and natural gas exploitation activities cades. It has transformed itself from a Within Vietnam, the VINASHIN ship- The main strengths for Vietnam’s dominate the city’s economy and con- closed, state-controlled economy into a building group is dominant with a mar- shipbuilding industry are based on the tributes principal income to Vietnam’s mixed economy with an increasingly dy- ket share of 70-80% and strong govern- country’s vast labor force available at budget and export volume namic and competitive private sector and ment backing. However, the focus is on low wage levels and the government’s As the majority of the large shipyards export-driven industries. The maritime producing smaller tonnage vessels in- commitment to developing the sector. in Vietnam are managed by Vinashin, cluster, particularly the shipbuilding in- clude tankers, bulkers and multipurpose Industry weaknesses relate to poor man- operating in a parent-subsidiary model, dustry and maritime transport industries, vessels. In the past ? ve years with the in- agement skills, extending to yard man- foreign companies usually enter the have been a central part of the economic creasing number of foreign buyers being agement, supply management, ? nancial Vietnamese market by setting joint ven- growth and receives preferential treat- entertained the ship size being ordered management and market strategy. Each tures resulting in creation of new entities ment in the Vietnamese government’s has continued to grow. Foreign invest- of these areas may be affected by insti- or by acquiring shares in local shipyards.

development strategy. ments play an important role. Although tutional factors, especially the strong po- Vietnam National Shipping Lines

Vietnam has also emerged as an im- production is relatively inef? cient, wage litical interference in the sector. (Vinalines) has a central position in the portant oil and gas producer which has costs are low so that the country can re- The Vietnamese shipbuilding cluster sector, currently owning some 30% of stimulated development in the offshore main competitive. However, ? nancial is divided into three sub-clusters – the the Vietnamese ? eet). Vinalines is also segment. Foreign direct investments stability is a concern. northern, central and southern clusters. owned, regulated and ? nancially sup- have contributed signi? cantly to the eco- Besides Vinashin, the Vietnamese ship- The northern cluster, Hai Phong, is con- ported by the state, covering some 70 54 Maritime Reporter & Engineering News • DECEMBER 2015

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