Vietnam Shipbuilding Industry Needs Special Policies

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(Image Courtesy: Vietnam Investment Review)

New investment projects committed by Singaporean investors and orders from South Korea have signalled a revival of the shipbuilding industry in 2018. However, it will be a difficult task to obtain a growth rate of 6-8 percent by 2020.

Vietnam’s shipbuilding industry received good news in early January 2018: four investors from Singapore decided to pour USD 50 million into a shipyard belonging to Triyards, a joint venture in Dong Xuyen Industrial Zone (IZ) in Vung Tau City.

In 2017, Pha Rung Shipyard Company launched the first ocean liner named YN YEOSU. This is one of four vessels ordered by a South Korean partner. This is the first big order Pha Rung has received after six years of deadlock because of the shipping industry crisis.

Also in 2017, the Shipbuilding Industry Corporation (SBIC) won contracts on building 6500 ton oil and chemical vessels from South Korean ship owners. SBIC and South Korean partners are negotiating the building of 10,000 ton and larger vessels, which would bring Vietnam new opportunities for export.

Commenting about the good news, Ngo Tung Lam, deputy CEO of SBIC, said the international shipping market showed signs of recovery in 2017. However, Lam said that despite the recovery, the industry will not gain the brilliant achievements as seen in the past.

Major Challenges

2018 will be the time for new conventions, with stricter requirements, to take effect. These include new regulations of the International Maritime Organization (IMO) or the Monitoring, Reporting and Verification of Carbon Dioxide Emissions (EU MRV).

Lam said that stricter requirements would increase competition among shipping firms. Maritime shipping firms will have to upgrade their fleets to satisfy the requirements. This will give golden opportunities to Vietnam’s shipbuilding industry.

Tran Dinh Thien, head of the Vietnam Economics Institute, said Vietnam needs to have a master plan on developing a sea-borne economy, in which shipbuilding and shipping industries must hold an important role.

“To facilitate the development of the shipbuilding industry, Vietnam needs to create specific policies that will support specific beneficiaries, especially well-designed shipbuilding development programs with a long term vision,” he commented.

According to Thien, it is necessary to outline a long-term development strategy with the 30-50 year vision for the nation’s shipbuilding industry. SBIC should be the nucleus of the national shipbuilding industry program, he said.

Lam from SBIC said that once the shipbuilding industry develops, Vietnam’s mechanical engineering industry will also prosper.

(Source: VietNamNet Bridge)

Sea News, March 5