The shipbuilding industry – an important industry to develop Vietnam’s marine economy – is having opportunities during the Covid-19 pandemic. So now it is necessary to rethink the advantages and difficulties, from which to take steps to revive the Vietnamese shipbuilding industry.
Opportunities for Vietnam’s shipbuilding industry during the pandemic
The complicated developments of the Covid-19 pandemic and the congestion of the Suez Canal made the shipping industry difficult, and the cost of transporting containers increased. So how does Vietnam’s shipping industry work during the pandemic?
Recent statistics from the Vietnam Maritime Administration show that in the first 6 months of 2021, despite the impact of the Covid-19 epidemic, the total volume of transport transported by Vietnam’s shipping fleet still reached nearly 82 million tons. , an increase of 12% over the same period last year. In particular, the volume of international shipping import and export goods of the Vietnamese fleet increased by 54% and transported on routes such as China, Japan, Korea, Southeast Asia and some European routes. Europe.
According to statistics of the United Nations Trade and Development Forum, Vietnam’s fleet ranks 4th in Southeast Asia (ASEAN) and 30th in the world. As of June 20, 2021, the total number of Vietnam’s shipping fleet is 1,576 ships, with a total tonnage of about 12 million DWT. In which, the number of bulk and general cargo ships has 737 ships, oil and chemical tankers have 186 ships; liquefied gas specialized ships have 19 ships; container fleet has 38 ships; passenger ship has 63 ships.
It is worth mentioning that while many industries and economic fields have been seriously affected by the Covid-19 pandemic, Vietnam’s shipbuilding industry has shown signs of prosperity.
Many Vietnamese shipbuilding enterprises have well grasped the opportunity and made drastic changes. Typically, the case of Dung Quat Shipbuilding Industry Company (DQS) was once in a difficult situation, and the production situation is very good. According to statistics from DQS, in the first 4 months of this year, the company received and repaired as many ships as twice the number of ships in 2018 and 2019 combined.
The Shipbuilding Industry Corporation (SBIC – formerly Vinashin) – said that SBIC’s shipyards across the country had a higher level of ship repair orders than before, both in terms of the number of ships repaired. and revenue value.
The reason why Vietnam’s shipbuilding orders have increased recently is attributed to the fact that many partners realize that the Vietnamese environment is safe and Vietnamese enterprises are capable and reputable.
Advantages and disadvantages of Vietnam’s shipbuilding industry
With a long coastline and an exclusive economic zone in the East Sea of more than 1 million square kilometers, Vietnam is a country with a favorable position to develop the shipbuilding industry.
Not only has favorable natural conditions, but the shipbuilding industry also always receives the attention and support of the Party and State. In the “Strategy for sustainable development of Vietnam’s marine economy to 2030 with a vision to 2045”, Vietnam identifies the marine economy as a driving force for the development of other economic sectors, thereby creating fundamental changes in the economy. copy and comprehensively structure the marine economy in the direction of industrialization and modernization.
Besides, the demand for shipping by sea is increasing, so the shipbuilding industry will have many market opportunities. In particular, the demand for transportation has increased in recent years, when Vietnam is promoting exports, when the opportunities for integration become more and more extensive, then Vietnam needs to identify itself in a different position, not being too dependent. to international shipping lines today. Vietnamese enterprises have almost no choice because of international shipping, 95% of the market share is for foreign shipping lines. such as China, Japan, Korea and Southeast Asia. Vietnam’s export activities to major markets such as the US, EU… depend almost entirely on foreign shipping lines.
Can’t be too dependent on international shipping lines like now, saving the shipbuilding industry will be the solution
An important task for the implementation of the Marine Strategy is to develop the shipbuilding and ship repair industry. The shipbuilding industry plays an important role in providing vehicles and technical equipment for freight – passenger transport by sea/river, defense industry, oil and gas industry and marine and marine industry. produce…
The shipbuilding industry has been identified by the Party and State as a key mechanical industry, a large industry with a key role and nature in the country’s industrial development structure.
Over the past 50 years of establishment and development, the shipbuilding industry in our country has become a key industry with a system of large and small shipyards from North to South, joint venture factories with other countries. outside.
In the process of growth and development, Vietnam’s shipbuilding industry has achieved a lot of achievements, has built specialized ships, ships with a large carrying capacity of up to 53 thousand tons and aims to build 110 thousand tons of ships, ships carrying capacity of up to 53,000 tons. 4900 cars, container ships,…
In recent years, Vietnam’s shipbuilding industry has made great progress and is gradually asserting itself in the international market.
However, Vietnam’s shipbuilding industry is facing many difficulties due to the impact of the worldwide shipbuilding mechanical industry crisis.
Moreover, due to the prolonged recession of the shipping market, unstable source of transport goods, and transportation contracts signed with customers usually within a short time of about 1-2 years, Vietnamese ship owners do not dare to invest. invest in building new ships while not yet signing a long-term transport contract with a stable source of goods.
Another difficulty is that it is difficult for Vietnamese shipping companies to “squeeze” to regain the transport market share when the ship’s age and small tonnage have to compete with modern ships of other countries in the world.
In fact, Vietnam’s fleet of ships is mostly used ships, bought by investment enterprises before 2008 to meet the needs of international freight at that time. Up to now, the fleet is over 15 years old, many ships with old technology are not suitable for transporting import and export goods, making it difficult to compete with the new generation fleet of foreign enterprises. Most of Vietnamese ship owners are small, mostly only involved in the transportation stage, but not many ship owners provide package logistics services, leading to low efficiency of exploitation.
Another shortcoming is that Vietnam’s fleet structure is not developed properly, small tonnage ships are in surplus, while there is a lack of large tonnage for international transport, and a lack of specialized ships such as liquefied petroleum gas. , chemical ships, bulk cement. The number of container ships in Vietnam only accounts for 3.7%. The world has developed container ships with a capacity of over 20,000Teus, but Vietnamese enterprises have only invested in ships with a capacity of 1,800Teus.
The market share of import and export freight transport of Vietnam’s fleet is decreasing. If in 2015 the Vietnamese fleet took up 10% of the market share of import and export goods, by 2020, the market share of import and export goods will have halved.
In addition, many shipbuilding enterprises are facing financial difficulties due to large investment debts at banks that have not been restructured; Bank loans for production are difficult. Over the past decade, shipbuilding enterprises are still struggling, “swimming” without support for financial solutions, human resources or supporting industries from the State.
What to do to revive our country’s shipbuilding industry?
Currently, the opportunity to repair ships comes more. Therefore, Vietnam’s shipbuilding industry also has the potential to develop stronger.
In order to revive the shipbuilding industry, Vietnamese shipbuilders need to calculate to minimize costs, ensure the progress and quality of contract implementation. It is necessary to continue the tradition of Vietnam’s shipbuilding industry, to reconnect with large customers with whom domestic shipbuilders have cooperated to build very large ships up to 53,000 – 56,000 tons such as: England, France , Spain, Korea, Japan, China…
Another issue that is extremely urgent to revive the shipbuilding industry is the need to add new ships to the Vietnamese fleet. Because most of Vietnam’s fleet of ships is old, and the quality of ships is low. The State should have policies to support large ship owners to develop a modern fleet, to compete with the fleets of other countries in the world.
In order to encourage ship owners to remove old ships from inefficient exploitation and invest in new ships, specialized ships suitable for transport needs, it is necessary to exempt or reduce taxes and fees (registration registration fee, VAT .. .) when building or buying new modern ships.
According to China’s experience, when this country has a support policy for ship owners to sell old ships to build new ships at domestic shipbuilders, they will receive money support that has helped this country restore the shipbuilding industry. ships after the 2008 financial crisis. With that mechanism, many businesses with “old ships” nearly 30 years old immediately liquidated their vehicles to build new ones. Shipyards thus have an additional source of goods to survive the difficult times.
In addition, the State should also encourage enterprises to invest in specialized ships to meet domestic transport needs such as liquefied petroleum gas, bulk cement, large tonnage crude oil ships, to replace foreign ships; supporting output for shipbuilding enterprises, contributing to the development of domestic waterway transport and competing with major carriers in the world.
Similarly, in Korea, in order to save the maritime industry, including the shipbuilding sector, the Government has a policy of valuing the loss-making fleet of transport enterprises with an appropriate limit, then “debit” the that valuation money to the enterprise to be paid in installments (in the name of the State buying back the fleet so that the enterprise has a reinvestment amount). When having this basic capital, the enterprise makes a profitable investment and then repays the loan from the State.
The world boomed in the trend of new generation ships starting in the years 2013-2014, since then, the shipbuilding industry of these countries has made huge profits. According to updated information, the shipbuilding momentum of China, Korea, and Japan by 2023 has almost completely closed.
In addition to new construction, ship repair also needs more attention. Vietnam currently has a few ship repair factories, but they are not properly invested, have no strategy, and cannot access large ships. Many Vietnamese ships have to be repaired abroad. In order to attract customers, the repair work must be reasonable and reputable. The repair not only repair the hull but also repair the whole other system.
On the other hand, it is necessary to develop supporting industries to support the shipbuilding industry. Because a ship can have up to many thousands of details. But the details to make up the ship can’t be made by the shipyard itself, but must be provided by an auxiliary industry. Meanwhile, our country’s supporting industry has a low localization rate, sources of materials such as iron and steel, machinery, main machines, auxiliary machinery systems, equipment, marine microgas… still mainly imported from abroad.
According to the Vietnam Association of Mechanical Enterprises, accessories for Vietnam’s shipbuilding industry currently account for only about 20-30%. In which, Vietnamese pure goods only account for about 10-15%, the rest are foreign accessories processed in Vietnam, or must be imported.
According to Mr. Dao Phan Long, Chairman of the Vietnam Association of Mechanical Enterprises, our country’s shipbuilding industry can focus on building new ocean-going ships, fishing boats, cruise ships, etc., on the basis of size selection and calculation. capacity of ships to serve the domestic market in the short term, 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 demand; focusing on ancillary products that Vietnam can implement in the near future such as new shell materials, development of ship technical design…
Ships is a large industry, diverse in types. Shipbuilding is closely related to many different industries, especially in the field of mechanical engineering, metallurgy with some main fields such as steel production, shipbuilding, manufacturing, equipment assembly, marine mechanical machinery, etc. , electricity, electronics, automation, new materials. Therefore, the development of these supporting industries will create a good opportunity for Vietnamese shipbuilding to compete in the international market.
When the shipbuilding business grows, it will also lead to a series of mechanical enterprises developing together. The profit margin of the shipbuilding industry as well as the mechanical industry is not high, but it has a large spillover effect on the economy, which can promote many industries to develop together.
However, shipbuilding is a long-term industry, so businesses want to survive and survive requires a lot of capital. But most shipbuilding enterprises are currently facing difficulties in capital. The cost of bank loans in Vietnam is usually higher than the world loan interest rate. The State needs to study a loan package with preferential interest rates for shipbuilders, guarantee the performance of contracts with foreign ship owners for products that are considered effective, and can also learn from other countries. China, Korea or Japan are countries with a breakthrough in shipbuilding industry.
A very important issue in the shipbuilding industry is human resources. Human resources must meet the construction schedule so as not to prolong the contract period because the longer the construction period, the more the business loses. In order to overcome the situation of delay, it is necessary to prepare good human resources, ready to adapt to the progress required by the goods owner. Human resources now must not only meet qualifications but also have to update their knowledge of new and modern shipbuilding technology.
Therefore, the State should soon have reasonable supporting mechanisms and policies to attract and train human resources; at the same time, there are solutions on taxes, loan conditions, interest rates on bank loans… to promote the development of shipbuilding industry.
