Maritime industry in Vietnam
With its long coastline, strategic location and skilled low-cost labour force, Vietnam is an interesting location for the Dutch maritime companies producing for third markets and equipment suppliers. Several major Dutch companies are already active in Vietnam’s main centres for shipbuilding: Hai Phong, Da Nang and Ho Chi Minh City. Vietnam also has an extensive port infrastructure with over 120 ports, of which 37 ports can accommodate ocean cargo vessels. With an average annual export growth of 12% the port infrastructure is in continuous development to facilitate this trend.
With a coastline of 3260 km (excluding islands) on the Gulf of Tonkin, the South Chinese Sea and the Gulf of Thailand, the natural resources in Vietnam provide a good basis for marine activity. Vietnam is the world’s fourth largest shipbuilding country and the industry is one of the main priority sectors of the government of Vietnam.
According to the Law on Investment Article 16.1c, ship-building is one of the sectors that can be eligible for so called ‘investment incentives’. From that article can be derived that ship-building is one of the priority sectors for the Vietnamese government. However, that doesn't necessarily mean that the Vietnamese government is granting tax cuts for all Dutch companies in shipbuilding in Vietnam. It shows intention of growing. The country has 20 major domestic shipyards owned by the Ministries of Transport, Defence and Agriculture. Furthermore there are 8 foreign shipyards active in Vietnam that have established joint-venture operations with a Vietnamese shipyard. Among the foreign shipyards is Damen, which has established a joint-venture with SBIC’s Song Cam shipyard. Despite the grave impact of the economic downturn on the shipbuilding industry in Vietnam, it remains a promising sector, in particular with regard to shipbuilding technology and equipment.
Currently there is a presence of 9 major shipbuilding factories, divided into three major clusters. In the south there are two factories with the capabilities to make ships sized 25 – 50,000 DWT. In the central part of Vietnam there are four factories, able to build ships sized 50 – 30,000 DWT. In the north there are three major shipyards, among which Dutch-owned company Damen Song Cam, able to build ships sized 30 – 70,000 DWT. Those shipyards have repaired a total of 152 Vietnamese ships in 2015, and are projected to raise that number to 173 ships per year.
The overall sector is promising, in particular with regard to shipbuilding technology and equipment. Imported equipment mainly includes marine diesel engines, electronic-hydraulic steering gear, cranes up to 120 ton, air compressors, crankshaft grinders, plasma cutting machines, welding machines and other on-board equipment. Technology transfer in the sector is also a common co-operation with foreign partners that local shipyards prefer.
There has been increased interest from foreign port operators seeking to manage new ports that are being developed both in the north and south of Vietnam. This matches the interest of the Vietnamese government in promoting increased foreign participation in seaport development. According to the new Master Plan on Development of Vietnam’s Seaport System through 2020 with orientations toward 2030, the Vietnamese government also encourages and creates favourable conditions for enterprises of all economic sectors to invest in seaport development. The form of Public-Private Partnership (PPP) is also welcome to develop new large ports and wharf areas. In order to prepare Vietnam to facilitate their growing import and export flows a logistical framework, based on a well-organised port infrastructure, is required. Opportunities to support Vietnam in these developments are present and in demand.
Dutch-Vietnamese cooperation in the maritime sector
Port of Rotterdam (PoR) has been in active partnership with Ho Chi Minh City to support their vision of a growing port city in the ‘Ho Chi Minh City Towards the Sea’ programme. Consultancy services by PoR have also been provided to Hai Phong to support their port development ambitions. STC has been active in developing training and technical support for port pilot capacity at Vietnamese maritime education institutions.
Possible additional areas that may be interesting for Dutch companies include but are not limited to: port investment and management, port-related construction work and port facilities and equipment.
In the Vietnamese shipbuilding sector there is a relatively large presence of Dutch companies. Many of those work in collaboration with Damen Song Cam, which officially opened a shipyard in Hai Phong in 2014. In the years before, there already was a strong partnership between Damen and Vietnamese shipyards by means of contracts. Other Dutch Companies active in shipbuilding in Vietnam are amongst others: Alewijnse Marine Technology, El-Tec, Winel, Gebhard, van der Leun, Hyva and Praxis.