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The May 2024 issue of Sputnik news agency (Russia) said that Vietnam’s shipbuilding industry is once again rising, after spending many years overcoming the severe impacts of the global economic crisis of 2008-2012.
In the latest list of “Top 15 shipbuilding powers in the world” – ranked by Insider Monkey (USA) in April 2023 based on data from the United Nations Conference on Trade and Development (UNCTAD), Vietnam is ranked 7th globally.
According to the Russian newspaper, one of the most notable recent events for the Vietnamese shipbuilding industry was the launching of the $35 million bulk carrier Truong Minh Dream 01 on May 11. With a full load of 65,000 DWT, Truong Minh Dream 01 belongs to the project of the “largest ever” cargo ship built by Vietnam.
The Truong Minh Dream 01 ship has an overall length of 199.99m, a width of 32.36m, and a total capacity of 35,823GT. All stages of shipbuilding were carried out by the team of engineers and workers of Nam Trieu Shipbuilding Company in collaboration with domestic contractors.
Another outstanding achievement of the Vietnamese shipbuilding industry was recorded on March 9 this year, when the Thang Long super-speed ship – manufactured by the 189 Shipyard (Z189) – began operating on the sea route from Vung Tau to Con Dao.
According to Sputnik, this ship has “the capacity of three Boeings” , becoming the largest single-hull high-speed ship in Vietnam to date.
In addition to commercial vessels, Vietnam has clearly demonstrated its advanced shipbuilding capabilities by completing and exporting dozens of high-end patrol boats to Africa in 2020.
Mr. Taras Ivanov – Head of Sputnik’s Permanent Representative Office in Hanoi added:
Vietnamese shipbuilding companies such as Damen Song Cam Factory have successfully manufactured and exported a series of modern ships for the naval forces of many countries such as the rescue ships MV Besant and MV Stoker, the multi-purpose training ship MV Sycamore (Australia), and the Spa 5009 class patrol ship (Venezuela).
With the trend of innovation in ship operations and the increasing demand of offshore industries around the world, the Vietnamese shipbuilding industry is facing the opportunity to access more orders.
During the discussion session on the afternoon of May 29 on the socio-economic situation and state budget at the National Assembly Hall, Deputy Head of the Hai Phong City National Assembly Delegation La Thanh Tan said that Vietnam is holding competitive advantages in the region and internationally with a skilled shipbuilding workforce and low labor costs.
Mr. Tan cited research data saying that the potential of Vietnam’s shipbuilding industry can create an estimated value of up to 200 billion USD/year.
A formidable competitor to
Chinese shipyards
According to statistics from the Vietnam Maritime Administration, there are currently 97 shipyards nationwide with a tonnage of 1,000 DWT or more and 68 shipbuilding and ship repair factories. The total design capacity of the new factories is up to 2.6 million DWT/year.
The “Vietnam Shipbuilding Industry Report” by the Organization for Economic Cooperation and Development (OECD) said that the capacity of shipyards in Vietnam has made a big change when Hyundai Vietnam switched to the field of new shipbuilding. This is a joint venture between Hyundai Mipo Shipyard (Korea) and Shipbuilding Industry Corporation (SBIC – Vietnam).
Most recently, on May 23, at the headquarters of Vietcombank Khanh Hoa branch (Nha Trang city), a signing ceremony of a short-term credit financing contract of 3,800 billion VND took place between Vietcombank Khanh Hoa and HD Hyundai Vietnam Shipbuilding Company Limited.
Mr. Le Huu Hoang – Standing Vice Chairman of Khanh Hoa Provincial People’s Committee said that this is a typical example that needs to be replicated in the banking system to contribute to the development of the industry in a harmonious direction in both breadth and depth, in which priority is given to in-depth development, gradually participating in the global supply chain, expanding the production scale of industries with strengths such as shipbuilding.
Commenting on this event, Imarine – the largest information site on the shipbuilding industry in China – said that the cooperation between Vietcombank and HD Hyundai Vietnam will create “synergy” , bringing benefits to both sides, while promoting HD Hyundai Mipo to expand local business activities in Vietnam.
“While HD Hyundai Vietnam can quickly and safely mobilize capital to operate locally, Vietcombank’s branch in Khanh Hoa will also take the lead in attracting foreign investors through HD Hyundai Vietnam,” Imarine said.
According to Eworldship – the top maritime information site in China, with the same parent company of famous magazines such as “International Ship”, “China Shipyard Manual”…, thanks to its rapid growth rate, Hyundai Vietnam factory has become the largest shipyard in Southeast Asia, and is a core enterprise in the Vietnamese shipbuilding industry.
“By the end of 2023, Hyundai Vietnam’s cumulative orders have reached over 204 orders,” Eworldship said.
Notably, according to Eworldship, Hyundai Vietnam mainly builds medium-sized crude oil tankers and low-value-added bulk carriers, which are also the mainstay of Chinese shipyards. However, Hyundai Vietnam produces lower-cost ships, thereby offering more competitive prices in the market.
General assessment of Vietnam’s shipbuilding industry, “Report on investment prospects and investment environment in Vietnam’s shipbuilding market 2020-2024” published by New Sijie Industrial Research Center (China) stated that Vietnam is holding 3 major advantages.
First is the policy advantage . Since 2010, to solve the difficult problem of developing the domestic shipbuilding industry, the Vietnamese government has carried out reforms and established the Shipbuilding Industry Corporation (SBIC).
In addition, the Vietnamese government has developed a series of development plans and incentive measures to take advantage of policy advantages to attract foreign-invested enterprises to the shipbuilding industry.
The second advantage is the environment. The shipbuilding industry is inherently demanding on natural conditions and requires some specific coastal resources, such as a long coastline.
According to New Sijie, Vietnam has a coastline of up to 3,260km and many high-quality deep-water ports. In addition, Vietnam has a tropical and subtropical climate, with year-round ice-free ports, creating very favorable conditions for the shipbuilding industry.
Finally, Vietnam has a demographic advantage. The shipbuilding industry requires a large number of manual laborers. With a population of about 96 million and a relatively young population structure, Vietnam has an abundant and cheap labor force, New Sijie said.
According to this center, the shipbuilding industry is one of the pillars for Vietnam’s economic development, which can contribute to promoting employment, developing export trade and ensuring coastal defense and security.
“Although there are still many difficulties, with the above advantages, combined with the policies of the Vietnamese government, the Vietnamese shipbuilding industry still has a lot of potential for development,” New Sijie concluded.
Nhat Minh (Life and Law))
