SHIPBUILDING INDUSTRY
Introduction The shipbuilding industry is one of the main priority sectors of the government of Vietnam. Most recently the government has made USD 750 million available for the sector in order to finance the development into a modern industry that can meet the future international quality demands. Vietnam has more than 60 shipbuilding and repairing yards owned by the Ministries of Defence, Fisheries and Transport. The Ministry of Transport owns the biggest number accounting for more than 70% of building capacity of the sector under the umbrella organisation Vietnam Shipbuilding Industry Corporation (VINASHIN). The local shipyards mainly produce steel vessels for cargo transport and offshore fishing. The bigger shipyards are currently building shipyards up to DWT 53.000 - and plan to develop further to enhance capacity up to DWT 100.000. Some 50 minor shipyards are currently able to build cargo ships of 6.500 DWT. Light tonnage oil tankers, dredges and passengers ships are also built in increasing numbers.
Maintenance and repair Several of these shipyards are capable of repairing up to 50,000 DWT vessels. Especially the Huyndai-Vinashin shipyard, a joint venture between Korea’s Huyndai Mipo Dockyard VINASHIN has the capacity to repair ships up to 100,000 DWT. The joint venture is now the largest ship repairing yard in the Southeast Asia. The Government has also decided to make shipbuilding a key export industry. As a result, the sector earned USD 251 million from local sales and USD 71 million from exports by 2003 and expects to increase the total amount to USD 5.11 billion by 2010.
Market size indicators Vietnam’s shipbuilding industry is growing rapidly, creating good opportunities for exporters of materials, maritime products and services. The tables below show the expected domestic demand:
Table 1: Forecast for additional vessels, 2001-2010 and 2020 Vessels | 2001-2010 | 2001-2010 | 2010-2020 | 2010-2020 | | | units | m.tonnage | units | m.tonnage | | Cargo ships | 229 | 1.65 | 284 | 2.1 | Container
ships | 28 | 0.47 | 58 | 1 | | Oil tankers | 37 | 1.11 | 43 | n.a. | | | | | | |
Table 2: Forecast for passenger shipping fleet to 2005-2010
Vessels | 2005 | 2010 | | Sea going | 59 | 79 | | River | 522 | 650 | | Total | 581 | 729 |
The Vietnam Shipbuilding Industry Development Programme has mapped out general objectives of the development programme which include 3 implementation phases as follows:
Period 2002 - 2005:
- Upgrading and renewing technology of the existing shipyards: Ha Long, Nam Trieu, Ben Kien, Bach Dang, Pha Rung, Saigon Shipyard in order to increase building and repairing capacity.
The shipyards in the future will be able to build large vessels, container ships and oil tankers of 12.000 DWT and to repair vessels of 20,000 DWT and especially 400,000 DWT at the Huyndai-Vinashin joint venture.
- Setting up a support industry zone in joint venture with foreign partners to produce steel plate and assemble diesel engines of 6000 CV and other marine equipment on board.
Period 2006 - 2010:
- Continue the upgrading of Nam Trieu Shipyard to raise the building and repairing capacity of container ships up to 50.000 DWT each.
- Setting up groups of shipbuilders in Dung Quat, Dong Nai and Ca Mau, in which shipyards in Dung Quat will build and repair oil tankers up to 100,000 DWT, in Dong Nai for new building of vessels and oil tankers of 30,000 DWT. Period 2010 - 2020:
- Gradually reallocate shipyards situated inside cities of Hai phong, Ho Chi Minh City and Da Nang to industrial zones outside the cities. Build a national ship model center for research purposes. Modernise design works and management control systems as well as introduction of an official website for Vietnam shipbuilding industry. Enter into cooperation with domestic and foreign universities to establish a training center for maritime officers and researchers in order to ensure a long term and sustainable human resources for the sector. Cooperate with foreign partners in training maritime workers to serve the modernisation process of the shipbuilding industry.
In the Northern provinces, ten shipbuilders are to be upgraded and 7 bases will be set serving shipbuilding industry in Quang Ninh, Haiphong and Hanoi. Shipyards in this region are to build container ships, building and repairing ships up to 50,000 DWT, producing welding rod, ship equipment. In the Central region, nine shipbuilding industries will be upgraded and a new one will be built in Dung Quat to build and repair tanker of 100,000 DWT, with investment capital of USD 152 million. In the South, four shipbuilders will be upgraded and four new ones will be built. Vietnam’s main export markets in the future will be Europe and Japan, which are seen as large shipping markets with ship-building strength.
Market evaluation
There is a good market for technology transfer. It is obvious that demand for materials and equipment for industrial shipbuilding will increase in the 10 coming years. So far imported equipment generally include marine diesel engines, electronic-hydraulic steering gear, cranes up to 120 ton, air compressors, crankshaft grinder, plasma cutting machine, welding machines and other equipment on board.
Technology transfer in the sector is also another common cooperation with foreign partners that local shipyards prefer as good option to improve themselves. At present, the local content in shipbuilding sector is just 30-35 per cent. This includes labour, secondary materials and some minor equipment while main equipment and engines are imported. Vinashin hopes to increase the local content ratio to 60 percent by 2010 by building a factory to assemble diesel engines of up to 20,000hp in Hai Phong and new plants to make equipment for ships and welding rods.
Source: Danish Embassy of Hanoi (2006)
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