VIET NAM SHIPBUILDING SECTOR COMES OF AGE
VIET NAM SHIPBUILDING SECTOR COMES OF AGE
Viet Nam shipbuilding sector comes of age
Vietnam’s shipbuilding industry is developing rapidly with facilities built for companies from Europe and South Korea, among others.
The industrial sector’s market size has shown an upward trend in recent years in line with the country’s new status as a global production hub for multinationals and a logistics development destination. Major container ports are present in the north, central region, and the south.
Korean-backed Hyundai Vietnam Shipbuilding Co. in the south-central coastal province of Khanh Hoa has just obtained an order to build two oil and chemical tankers for an African shipping company.
The shipbuilder revealed this on Wednesday via South Korea’s news agency Yonhap, but did not disclose the African firm’s name or details of the deal’s financial terms.
Hyundai Vietnam Shipyard in Khanh Hoa province, south-central Vietnam. Photo courtesy of the joint venture.
Hyundai Vietnam Shipbuilding was formed in 1996 as a joint venture between South Korea’s Hyundai Mipo Dockyard Co. and Vietnam’s state-run Shipbuilding Industry Corp. to represent South Korea’s first overseas shipyard, and started operations in 1999.
It used to engage in ship repairs and renovations but entered the building business in 2008 and has so far successfully delivered over 160 new vessels, Hyundai Vietnam Shipbuilding president Lee Jong Chan wrote on his company’s website. The $350-million shipyard now employs around 5,000 local workers.
Hyundai Mipo Dockyard is one of the affiliates of HD Korea Shipbuilding & Offshore Engineering Co., a sub-holding company of HD Hyundai.
Vietcombank’s Khanh Hoa province branch and Hyundai Vietnam Shipbuilding Co. signed a short-term credit contract for $110 million late this February, following a similar agreement for $50 million signed in 2022. The Vietnamese bank disbursed almost $58 million to the shipbuilder right after that.
The shipyard accounts for 40% of Khanh Hoa province’s annual export value, according to provincial data.
In the southern coastal province of Ba Ria-Vung Tau, an oil and gas hub in Vietnam, the Vard Vung Tau shipyard of Norwegian shipbuilder Vard is building four service operation vessels (SOVs) for North Star, a leading British infrastructure support company.
The shipyard is completing the first three and held a steel-cutting ceremony for the fourth on Monday.
An SOV is a means of transport that can serve as a hotel, warehouse, workshop, or temporary home.
North Star will use the four special vessels for operation on the Dogger Bank offshore wind farm in the UK’s North Sea. It placed an order for the SOVs with Vard in 2021. The first three are due to commence operations this year, with the final one to be delivered in 2024.
The Vard Vung Tau shipyard was established as a green-field yard in 2006, started manufacturing operations in 2008, and was officially launched in 2010. According to its website, this is a fully integrated facility capable of undertaking the entire process of shipbuilding from hull construction to final outfitting works.
Not far from Vard Vung Tau, the Piriou Vietnam shipyard of Piriou, a French leader in shipbuilding and ship repairs for medium-size vessels, is finishing the cargo sailing ship Grain de Sail II for French cargo company Grain de Sail. It will be the company’s second carbon-free cargo sailing vessel.
Gain de Sail started its carbon-free cargo transport service in November 2020 with a sailing vessel able to transport 26 pallets (50 tons) of cargo and manned by four crew members. Its second vessel, which nears completion at Piriou Vietnam in Ho Chi Minh City’s Nha Be District, will have a freight capacity of up to 240 pallets (350 tons) which will be loaded on two levels in separate holds.
The new ship will also have a separate tank to carry up to 18 cubic meters of bulk liquid as well as an area to accommodate another 5 cubic meters of liquids in barrels, according to the French firm.
In Quang Ninh province in the north, Ha Long Shipbuilding Company is handling a contract it signed with Damen Shipyards in December 2022 to build six wind power service ships for the Dutch company. The ships are called commissioning service operation vessels (CSOVs).
An artist’s impression of the Damen CSOV 8720 model used for offshore wind power services. Photo courtesy of Damen.
In the offshore wind power sector, the SOV functions as a mother ship for wind turbine technicians performing maintenance and service work at offshore wind farms, while the CSOV is designed to support commissioning works during the construction of offshore wind farms.
The Ha Long Shipbuilding deal marked the first time a Vietnamese firm has secured a contract to build CSOVs for export.
The Vietnamese shipbuilder, part of Vietnam’s state-run Shipbuilding Industry Corp., had earlier cooperated with Damen to build ships for Vietnam Fisheries Resources Surveillance, tugs, platform supply vessels for oil-gas drills, crane barges, and multipurpose amphibious ship-landing crafts. In 2022, the firm launched the construction of 28 ships and delivered 17 new vessels and repaired 34 others.
Opportunities waving
The Vietnamese shipbuilding sector’s compound annual growth rate (CARG) between 2023 and 2032 is forecast at 6%, global research firm Research and Markets said in its “Vietnam Shipbuilding Industry Research Report 2023-2032”. The firm released the study on June 1.
“Vietnam’s shipbuilding industry also exports ships to international markets, including merchant ships, offshore support vessels and fishing vessels. Major export destinations include Europe, Asia, and the Middle East,” the report said.
In terms of international trade activities, ship components, machinery and raw materials are imported to support its shipbuilding activities. Major import sources include South Korea, Japan, China and countries in the European region, among others, said Research and Markets.
Due to the growth in global trade, offshore energy project development, and increasing demand for specialized vessels, the study forecasts a positive outlook for the Vietnamese shipbuilding industry from 2023 to 2027, with a growing Vietnamese shipbuilding market full of opportunities for growth.
The adoption of advanced technology, emphasis on environmental protection, and training of skilled labour will be critical to remain competitive, according to the study.
