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The Vietnamese shipping 'tiger': 'a magnet for global firms'

Vietnam: Shipbuilding industry a magnet for global firms

At last week’s ninth annual international exhibition on shipbuilding, shipping, and offshore technology-Vietship 2018-nearly 100 companies from Vietnam, and those as far as the Netherlands, Finland, and Russia attended to seek machine-selling opportunities in the local market.

Finland’s Helkama has been supplying cable for maritime and shipping industries in Vietnam through its partner Van Der Leun Vietnam for years. The firm saw better business performance thanks to an increase in orders.

“Now we have four or five direct clients in Vietnam. We hope to expand our business here when favourable conditions come around. Vietnam has huge growth potential, as its industries are still in their early phases. It could be our second-largest market in Asia, especially when the shipping market recovers,” Kari Virtanen, general manager of Helkama, said.

Daikai Engineering Pte Ltd., the sales agent of Japan’s Daihatsu, is also hunting for more orders. Daikai provides the sale of diesel engines and marine equipment, as well as rendering after-sale services to customers in the Asia Pacific market such as Singapore, Malaysia, the Philippines, Australia, and India, and in the Middle East. In 2011, it established a representative office in Vietnam.

“Our key clients are Vietnamese state-owned shipping giant Vinalines and Shipbuilding Industry Corporation (SBIC) with its shipyards. We are expecting more sales following the return of the shipping market,” said Ta Quoc Thang, sales manager of Daikai.

“In comparison with other regional markets, our sales in Vietnam are much lower, as we have yet to receive orders from international shipyards in Vietnam, with the exception of the Republic of Korea-backed Pha Rung Shipyard. Vietnam also has no ship repair workshops that can accommodate large vessels,” Thang added.

Other famous equipment suppliers in the local shipping and shipbuilding industries are DP Consulting Co., Ltd, and Norway’s Saint-Gobain Vietnam Co., Ltd.

For over 15 years now, DP Consulting has been the exclusive distributor of many famous international suppliers of shipbuilding equipment, including MTU Friedrichshafen-a subsidiary of Rolls-Royce Power Systems-Sweden’s Volvo Penta, and the Netherlands’ Hitec Power Protection. Like Daikai and Helkama, its clients are Vietnamese shipyards and army-run shipbuilding firms.

In the same move, Saint-Gobain established its Vietnamese branch in 2009, supplying pipes, fittings, valves, and actuators to Damen Shipyards and others. It is also waiting for recovery of the shipping industry to start a greater business expansion in the country.

Although the shipping market still experiences some difficulties, many business opportunities for international suppliers remain.

At present, most machines, equipment, and spare parts for the shipbuilding industry are imported, while local demands are growing rapidly as local shipping and shipbuilding firms make ambitious plans for the future.

“We are planning to cooperate with international shipyards to help build ships for their clients. We will need a steady supply of spare parts in the future. International groups have tended to bring more products to Vietnam. They offer better sales services than domestic rivals. Thus, companies like us prefer international suppliers to domestic ones,” said Le Thi Thu Huong, head of Dai Duong Shipyard’s business department.

In related developments, Vinalines will be restructuring its fleet, focusing on long-term contracts and key substantial volume commodities such as coal, ore, steel, cement, and clinker. The firm plans to build more modern ships and vessels to meet market demands.
Source: VietnamNet Bridge

Shipping will make Viet Nam a ’tiger’

As Viet Nam’s maritime industry grows, it will have a profound impact on the economy, tourism and trading and ultimately boost economic growth.

This was stated at a press meeting in Ha Noi on Tuesday, themed Cementing Viet Nam’s maritime capabilities at Asia Pacific Maritime (APM) 2018.

APM 2018, which will be held in Singapore in March, will be a strategic platform for the region’s maritime and offshore community to meet and establish business relationships.

Viet Nam is currently one of the fastest growing economies in the world, having invested significantly in infrastructure in recent years to position itself as Asia’s next Tiger Economy.

In 2017, Viet Nam’s gross domestic product (GDP) grew at a record 6.81 per cent, while GDP growth in 2018 is expected to be 6.1 per cent.

As the most cost-effective mode of transportation, shipping plays an integral role in the national economy and moves 90 per cent of the nation’s import and export cargo.

“With long coastlines and geographical proximity to regional maritime hubs, analysts predict that Viet Nam has the potential to become one of the most important maritime countries in Asia by 2020.

“However, most Vietnamese shipowners are plagued with outdated maritime assets and limited access to capital, which greatly hinders development and growth,” said Le Quang Trung, deputy general director of Viet Nam National Shipping Lines.

He said the present time was ripe for Viet Nam’s maritime business to modernise and close the gap with its regional counterparts.

Last year, Viet Nam sea transport grew by six per cent, moving 130.9 million DWTs (dead-weight tonnes). In May, 2017, the Vietnamese fleet comprised 1,406 ships. The shipping industry, however, still faces many challenges in terms of technology, operational efficiencies, access to capital and ability to cater to new markets.

According to Nguyen Tat Hoan, deputy director on Operations and Field Development of PetroVietnam Domestic Exploration Production Operating Company (PVEP POC) and chairman of Sea Horse Yatch, Vietnamese ship owners desperately need to modernise their shipping fleet to cut costs and improve competitiveness.

Hoan said: “With a number of advantages, such as high durability, energy efficiency and low maintenance costs, composite is the ideal cost-conscious choice for Vietnamese ship owners.”

Pham Hai Bang, chief of the Shipping Department at the Viet Nam Registry Department, said in the past few years, Vietnamese shipping companies had put in untiring efforts in the maintenance and technical management of their shipping fleet.

“This has enabled Viet Nam’s fleet to qualify for the Tokyo White List since 2015, which greatly boosted the safety level as well as maritime labour and environmental credibility of Viet Nam’s shipping industry,” he said.

Xue Hua, managing director of Weichai Singapore Pte Ltd, said against the backdrop of the global economy, Viet Nam’s economy would continue to face uncertainties in the monetary policy of major advanced fields. However, with its predicted GDP growth, maritime-related business in Viet Nam is expected to account for a big part of the national economy by 2020.

Viet Nam’s shipping fleet will get a chance to improve its competitiveness at the 15th APM, Southeast Asia’s leading and most recognised shipbuilding and marine, workboat and offshore exhibition and conference, which will be held at Marina Bay Sands in Singapore from March 14-16.

The three-day exhibition and conference will play host to more than 1,500 international exhibiting companies from 60 countries and is expected to attract more than 15,000 trade visitors from Asia.

APM 2018 is expected to be a strategic platform for the region’s maritime and offshore community to meet and establish business relationships.
Source: VNS