Because over the past two decades, the thin and weak fleet is considered the reason not only for Vietnamese shipping lines to miss out on huge profits from the international freight market but also for Vietnamese import-export enterprises to suffer because of the manipulation of foreign shipping lines. However, Mr. Kenny Yong’s statement is completely grounded. Since the Covid-19 pandemic, Vietnam’s shipbuilding industry has made great strides and is gradually asserting itself in the international market…
Photo by La Nghia Hieu
On the afternoon of August 3, Ha Long Shipbuilding Company held a launching ceremony for a 45,000 DWT cargo ship, design code VB45-01, named Truong Minh Dream 05. The cargo ship has a tonnage of 45,000 DWT, an overall length of 185 m, a width of 31 m, and a side height of 16 m. This is a double-bottom, single-side bulk carrier, driven by a diesel engine, with a single propeller in accordance with the updated regulations approved by Lloyd’s Register (UK). Truong Minh Dream 05 is considered a proud achievement in the shipbuilding capacity of Ha Long Shipbuilding Company, because the 45,000 DWT ship is a ship with a modern design and the most superiority in terms of resistance and emission quality. The ship’s fuel consumption efficiency is about 30% more economical than the current equivalent ship line. The unladen weight of the ship has been reduced to an optimal level. The ship is equipped with the most modern equipment, satisfying the strict requirements of port authorities in the US, Europe, Australia, etc.
Before focusing on Truong Minh Dream 05, Ha Long Shipbuilding Company had built many new products with good progress and quality for Dong Bac Company, typically the 21,000 – 23,000 DWT cargo ship product line. This was an important premise for Dong Bac Company to continue choosing Ha Long Shipbuilding Company to construct and build a series of new 45,000 DWT cargo ships. Next, Ha Long Shipbuilding Company was trusted to continue constructing 45,000 DWT ship No. 2, with better quality requirements and even shorter construction time.
In the period of 2022 – 2023, Ha Long Shipbuilding Company signed a contract with Damen Group (Netherlands) to build 8 new CSOV wind power service vessels. Last July, this company continued to sign a contract with Damen Group to build 6 new CSOV wind power service vessels, bringing the total number of CSOV vessels signed with Damen Group to 14. The first wind power service vessel is expected to be launched on August 28 and delivered in March 2025. With a delivery schedule of one vessel every 3 months, the last vessel is expected to be delivered in May 2028.
Previously, in May, a 65,000-ton bulk carrier – the largest ship ever built by a Vietnamese enterprise – was also launched and handed over to a customer in Hai Phong. The ship, which is nearly 200 meters long, more than 32 meters wide and more than 19 meters high, has been classified by the Japanese Register to operate in all international waters and meet all the operating requirements of seaports around the world. The cargo ship, worth more than 35 million USD, is the product of two years of tireless efforts by more than 500 officers, engineers and workers at the Nam Trieu Shipyard. The event is considered an important milestone marking the strong comeback of the Vietnamese shipbuilding industry after more than a decade of “struggling” with the restructuring process and handling the huge debts left by the Vinashin Group.
Mr. Pham Binh Minh, General Director of Vietnam Shipbuilding Engineering Joint Stock Company (VISEC), proudly commented: “A new generation of cargo ships is designed and built in Vietnam”. According to Mr. Minh, the total number of Vietnam’s sea fleet currently has more than 1,600 cargo ships, with a total tonnage of about 12 – 13 million DWT. However, 95% of the market share of Vietnam’s export cargo shipping is still reserved for foreign shipping lines, Vietnam is only responsible for 5%. In fact, most of the ships in Vietnam are over 15 years old, and old technology is not suitable for transporting goods. Another problem is that the structure of Vietnam’s fleet is not developing properly, small tonnage ships are in surplus, while there is a lack of large tonnage types for international transport.
However, from 2020 to now, while many economic sectors have been severely affected by the Covid-19 pandemic, Vietnam’s shipbuilding industry has flourished during and after the pandemic. Many Vietnamese shipbuilding enterprises have seized the opportunity and transformed strongly, have made remarkable developments and are gradually asserting themselves in the international market. Vietnam’s shipbuilding industry has built specialized ships, ships with large capacities of up to 50,000 – 60,000 tons and is aiming to build ships of 110,000 tons.
“A series of large shipbuilding projects in Vietnam have had our design consulting participation, such as: 17,500-ton general cargo ship for export built at Bach Dang Shipyard; 100,000-ton oil tanker built at Dung Quat Shipyard… All of these products have been completed by VISEC with the best quality, satisfying all strict requirements of ship owners and domestic and foreign inspection agencies,” Mr. Minh affirmed.
In 2023, Insider Monkey (USA) released a list of the top 15 shipbuilding powers in the world, based on data from the United Nations Conference on Trade and Development (UNCTAD), listing the percentage of ships built in 2021 by countries. Notably, Vietnam is in 5th place, with the percentage of ships built in 2021 being 0.61%. According to the Maritime Administration, Vietnam currently has 97 shipyards with a tonnage of 1,000 DWT or more and 68 new shipbuilding and ship repair factories. The total design capacity of new shipyards is up to 2.6 million DWT/year.
The above contribution rate reflects the shipbuilding capacity that Vietnam has been asserting more and more strongly in recent years. In 2020, our country built and exported dozens of high-end patrol ships to Africa, after building landing ships and patrol ships for its Venezuelan partner. These development achievements highlight the ambition of the Vietnamese shipbuilding industry to reach the global level. Notably, Vietnam has successfully manufactured a high-speed ship with a capacity equal to 3 Boeing 787s. This is the Thang Long super high-speed ship – the largest single-hull high-speed ship in Vietnam to date, currently operating on the sea route from Vung Tau to Con Dao.
Not only state-owned enterprises, but also “amateur” private enterprises have also contributed to making a special mark for the strong comeback period of the Vietnamese shipping industry. In the last month of 2023, Hoa Phat Shipping Joint Stock Company (under Hoa Phat Group) held a ceremony to depart the first shipment of the HPS-01 ship, marking the official operation of the first SB ship invested and built by the group. The ship has the design code SB 245-01/02 with 3 cargo holds used to transport Hoa Phat’s bulk cargo, especially hot-rolled steel products. The group also produces “Made in Vietnam” containers and last July signed a contract to supply 2,000 20DC container shells to Hapag-Lloyd, the largest container shipping company in Germany, in the Top 5 container shipping companies in the world.
Looking back at the development of the shipbuilding industry over the past two decades, Dr. Hoang Hung, Vice President and General Secretary of the Vietnam Shipbuilding Industry Science and Technology Association, said: Since 2005, Vietnam has signed a contract to build 15 ships for a British corporation, then we also built liquefied gas transport ships, container ships and some other ships for Korea and Japan. That was the peak period of the shipbuilding industry. However, in the period of 2008 – 2012, the global economic crisis, the demand for domestic and international maritime transport decreased, shipbuilding companies faced difficulties, culminating in the incident at Vinashin, which caused the Vietnamese shipbuilding industry to slow down and face many difficulties. This led to a significant decrease in orders for the Vietnamese shipbuilding industry, even in some periods there were no orders, leading to many shipyards having to change production and business or go bankrupt.
The most difficult period of recession has gradually passed. The shipbuilding industry is recovering, and shipbuilding facilities are developing in all localities from North to South. Currently, the country has nearly 120 large and small shipbuilding facilities, with annual output increasing 10 times compared to the previous decade, instead of previously being concentrated in economically developed provinces and cities such as Hai Phong, Quang Ninh, Da Nang and Ho Chi Minh City.
“The design and supply facilities for materials and equipment serving the industry have also grown in number, undertaking the design of products with specialized features and high scientific and technological content, supplying equipment and materials with diverse types, fully meeting the needs of shipbuilding and repair facilities. The Vietnamese shipbuilding industry, with nearly 70% of materials and equipment being imported, is a huge space for domestic suppliers of materials and equipment, while promoting the development of Vietnam’s supporting industry,” said Dr. Hoang Hung.
According to the Vietnam Mechanical Industry Association, accessories serving Vietnam’s shipbuilding industry currently account for only about 20 – 30%. Of which, purely Vietnamese products account for only about 10 – 15%, the rest are foreign accessories processed in Vietnam, or must be imported.
Mr. Dao Phan Long, Chairman of the Vietnam Mechanical Engineering Association, pointed out: our country’s shipbuilding industry can focus on building new ocean-going ships, fishing boats, cruise ships… based on selecting the size and features of each type of ship to initially serve the domestic market, and gradually restore and develop the international market. The State also needs to quickly plan a number of locations for ship repair and services to meet international and domestic needs; focus on auxiliary products that Vietnam can produce in the near future such as new material hulls, development in ship technical design…
“Shipbuilding is a large industry, diverse in types. Shipbuilding is closely related to many different industries, especially the mechanical and metallurgical fields, some key fields such as shipbuilding steel production, manufacturing, assembling equipment, hydraulic mechanical machinery, electricity, electronics, automation, new materials. Therefore, developing these supporting industries will create good opportunities for Vietnamese shipbuilding to compete in the international market. When shipbuilding enterprises develop, it will also pull a series of mechanical enterprises to develop together. The characteristics of the shipbuilding industry as well as the mechanical industry have low profit margins, but have a large spillover effect on the economy, which can promote the development of many industries,” Mr. Dao Phan Long emphasized.
The leader of the Vietnam Mechanical Engineering Enterprise Association also pointed out that: Shipbuilding is a long-term industry, so enterprises that want to survive and stand firm require a lot of capital. However, most shipbuilding enterprises are currently facing difficulties in capital, while the cost of bank loan interest rates in Vietnam is often higher than the interest rates in the world. Therefore, the State needs to study loan packages with preferential interest rates for shipbuilding units, guaranteeing the performance of contracts with foreign ship owners for products that are considered effective. We can also learn policies from China, Korea or Japan, which are countries with breakthrough shipbuilding industries.
In addition, a very important issue in the shipbuilding industry is human resources. There was a difficult period that forced skilled workers, engineers, and scientists of the shipbuilding industry to switch to other jobs, and until now they have not recovered. Human resources now not only have to meet the requirements but also have to update their knowledge of new and modern shipbuilding technology.
In fact, Vietnam Maritime University – the “cradle” of shipbuilding training – has been facing difficulties in recruiting students for traditional, strong majors that made the school famous in the past for about ten years. Although shipbuilding companies come to the school every year to “place orders”, award scholarships to encourage students, and need to recruit hundreds of engineers each year, very few people still study there.
According to a representative of Vietnam Maritime University, recruiting students for the shipbuilding industry has become easier in the past 1-2 years, but the number of students applying and the entrance scores have not improved much.
“The shipbuilding industry in the past faced many difficulties. Parents and students prioritized studying economics and technology, and did not like traditional engineering majors. The income of shipbuilding engineers was not really attractive and lacked competitiveness compared to other majors. The State did not have a policy to support students in key majors serving the country’s marine economic development strategy,” the school representative pointed out and proposed that the State should soon have reasonable support mechanisms and policies to attract and train human resources, promoting the development of the shipbuilding industry.
According to: https://thanhnien.vn/nganh-dong-tau-viet-nam-tai-xuat-ra-bien-lon-18524081022260387.htm
