Facts Of Vietnam’s Shipbuilding & Maritime Industry

With its long coastline, strategic location and skilled low-cost labour force, Vietnam is an interesting location for maritime companies producing for third world markets and holds big opportunities for equipment suppliers. Several major international 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.

Shipbuilding

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 one of the world’s 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. 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.

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.