Vietnam to Become World's Fourth Largest Shipbuilder by 2010

 

Vietnam has more than dockyards under the administration of the Ministry of National Defence, the Ministry of Fisheries and the Ministry of Transport. The Ministry of Transport is running a majority of shipyards in the country, which account for more than 70 per cent of national shipbuilding capacities. Major products are cargo freighters and offshore fishing boats. At the moment, Vietnam is building dockyards capable of building ships with loads of 100,000 DWT.

 

Currently, the locally sourced parts ratio only accounts for 30-35 of the ship value. Most Vietnamese contributions are labour, auxiliary materials and other accessories while equipment and machinery are imported. However, according to the Ministry of Industry, the ratio of locally manufactured parts will make up for at least 60 per cent by 2010.

 

Regarding export, the Ministry of Trade’s figures showed that the Vietnamese shipbuilding industry earned US$200 million from ship export in 2005. The ministry estimated that the ship export value of the country will reach US$1.7 billion a year by 2010. Small ships will be exported to regional nations like Laos and Cambodia. In spite of facing severe competition from rivals in Japan, Singapore, South Korea and China, according to experts, Vietnam is still capable of vying for high-valued contracts.

 

With an advantage of a 3,250-km coastline, many deepwater ports, a low-cost but well-trained labour force, Vietnam can raise the capacity of building ships with a combined load of 3 million tonnes with a 60 per cent localisation rate a year by 2010 and can occupy 10 per cent of the world market soon.

 

In the near future, the Vietnamese shipbuilding industry is striving to fulfil the preset targets ratified by the Prime Minister of making cargo ships of 80,000 DWT, crude oil tankers of 100,000-300,000 tonnes and container vessels of 3,000 TEU, and repairing ships of 400,000 DWT.

 

First, according to the Ministry of Industry, the shipbuilding industry needs at least US$1.5 billion for the modernisation of its operations and importation of advanced technologies. The investment capital will be mobilised in various sources, including US$700 million from joint ventures, US$150 million from foreign loans and the local source for the remainder. A large majority of investment capital for the shipbuilding industry is through Vinashin.

 

A soft loan valued at US$ 99.8 million has been negotiated with Chinese authorities for the construction of the Dung Quat Shipyard, which is scheduled for production in 2008.

 

Second, the shipbuilding industry has set a goal to raise the locally made component ratio in its products to 60-70 per cent by 2020. Vinashin will build two dockyard complexes in Ho Chi Minh City and Can Tho City to manufacture diesel engines, gearbox chains, boilers and onboard equipment. In the north, 10 shipyards will be upgraded and seven wharfs will be constructed to serve the shipbuilding industry in Quang Ninh, Haiphong and Hanoi.

In central region, nine dockyards will be upgraded and one, costing US$152 million, will be built in Dung Quat Economic Zone to repair and build oil tankers of 100,000 DWT. In southern region, four existing shipyards will be upgraded and four others will be built.

 

Thirdly, potential markets will generate orders worth multibillion US dollars. Europe and Japan are considered potential markets for Vietnam. To date, Vietnamese shipbuilders have exported their ships to the United Kingdom and Germany. Vietnam also cooperated with South Korea to build the Southeast Asia-largest Hyundai-Vinashin shipyard capable of fixing ships with loads of 100,000 DWT.