Professor Carl Thayer believes that Vietnam has the potential to enter the top 5 powerful shipbuilding nations in the world while also having an advantage over both Russia and France.

As an honorary professor at the University of New South Wales (Australia), he outlines three main reasons that have helped Vietnam achieve a higher ranking than France and Russia in Insider Monkey’s list.

While the domestic shipbuilding industry’s position is being strengthened, the demand for recruiting shipyard workers from Vietnam in South Korea is increasing. Vietnam is also regarded as a country with the most skilled and experienced shipyard workers in the ASEAN region.

Vietnam’s Surprising Ranking

Recently, as reported by Sputnik, the financial website Insider Monkey (USA) published a list of the top 15 powerful shipbuilding nations in the world.

The ranking is based on data from the United Nations Conference on Trade and Development (UNCTAD), which lists the percentage of ships built (compared to the global total) in 2021 by each country.

Vietnam’s unexpected placement at 7th position stands out, with a percentage of ships built in 2021 at 0.61%, surpassing other strong players in the global shipbuilding industry such as Russia (0.22%, ranked 12th), France (0.29%, ranked 10th), Finland (0.36%, ranked 8th), Taiwan (0.30%, ranked 9th), India (0.12%, ranked 15th), Norway (0.24%, ranked 11th), and Turkey (0.22%, ranked 13th).

Insider Monkey notes about Vietnam: “The shipbuilding rate in 2021 accounted for 0.61% of the global total. This Asian country owns over a hundred ports and nearly twenty shipyards.”

Above Vietnam in the ranking are Germany (0.63%), Italy (0.82%), the Philippines (1.06%), Japan (17.6%), South Korea (32.4%), and at the top is China (44.2%)

Why did Vietnam’s ranking surpass both Russia and France?

As reported by Sputnik, at the beginning of July, the Vietnam International Maritime and Shipbuilding Exhibition (VIMOX 2023) was organized for the first time in Vietnam.

Within the framework of this event, experts and delegates from various countries, especially, highly praised the position of Vietnam’s maritime industry as well as the significant potential of the shipbuilding sector.

Kenny Yong, the CEO of Fireworks Trade Media Group, commented that Vietnam’s shipbuilding industry has emerged as a competitive force that cannot be underestimated.

“With its extensive coastline, skilled workforce, and strategic geography, Vietnam possesses unique advantages that the maritime industry presents. Vietnam is also an appealing destination for many nations, and the potential for the shipbuilding market is substantial,”

Professor Hoang Hung, Deputy Chairman and General Secretary of the Vietnam Shipbuilding Science and Technology Association, stated that Vietnam’s shipbuilding industry is expanding, with shipyards developing across regions from North to South. Vietnam has approximately 120 shipyards of various sizes, with annual production increasing tenfold compared to the 1990s.

Regarding the ranking results released by Insider Monkey in April, Professor Carl Thayer from the University of New South Wales (Australia) expressed to Enterprises and Business that he was impressed by Vietnam’s shipbuilding industry’s achieved position.

According to the market analysis report on the Russian shipbuilding industry by expert Mariya Nesnova from the Saint-Petersburg State Marine Technical University (Russia), Russia’s position as a ship exporting nation has not fully utilized its potential. This is due to the overwhelming number of ships supplied by shipyards in Asia. Additionally, there are challenges related to technology, as Russia experiences delays in shipbuilding and high cost calculations.

As for France, Global Security believes that although it is one of the world’s leading shipbuilding nations, France is facing certain difficulties in maintaining competitiveness. Notably, the largest shipyards in the world are now predominantly concentrated in Asia, rather than Europe, as was the case before.

There are significant reasons for Vietnam’s success in this regard.

Firstly, the Vietnamese government is focusing on and prioritizing the development of the maritime economy.

Secondly, Vietnam’s shipbuilding industry has benefited from capital transfer, management experience, and technology transfer from leading shipbuilding companies in South Korea, Japan, the Netherlands, and France.

According to Mr. Thayer, the Vietnam Shipbuilding Industry Corporation (SBIC) has established joint ventures and received investments from numerous world-leading shipbuilding companies, including HD Hyundai Korea Shipbuilding & Offshore Engineering (South Korea) and its subsidiary Hyundai Mipo Dockyard; Damen Group (Netherlands); as well as Vard (Norway) and Piriou (France), both of which have factories in Vung Tau and Long An provinces in Vietnam.

Vietnamese joint ventures with foreign companies have successfully produced ships that meet both domestic quality requirements and international standards.

“The variety of ships produced by Vietnam is very diverse, including cargo ships, oil and chemical tankers, offshore support vessels, wind power service vessels, and fishing vessels for export to Asia, Europe, the Middle East, and Africa,” emphasized the expert.

Thirdly, Vietnam possesses natural advantages, such as a coastline of over 3,200 km that interfaces with bustling and second-largest maritime transport routes in the world. The current number of seaports and shipyards in Vietnam is also a significant advantage.

Moreover, Vietnam has specialized universities and colleges offering maritime training and providing maritime certifications, which contributes to a skilled workforce with a competitive salary structure.

Vietnam is approaching the top 5 powerful shipbuilding nations in the world.

On the ranking table, currently, the Philippines is the only Southeast Asian nation within the top 5 powerful shipbuilding countries in the world, holding the 4th position.

However, Professor Thayer emphasizes, “The gap between Vietnam and the Philippines will continue to narrow. Vietnam is also predicted to rise to the 5th or even 4th position on the global ranking.”

This perspective aligns with the views of many experts and international representatives at VIMOX 2023, who believe that Vietnam’s shipbuilding industry has immense developmental potential, capable of reaching the 5th or even 4th position worldwide.

In an earlier interview with Sputnik, Dr. Le Xuan Hoa expressed confidence that Vietnam could certainly climb higher on the ranking, with the technology transfer from countries in the region and Europe – nations with established and sustainable shipbuilding industries, such as South Korea, Japan, Germany, and Italy, alongside increased investment in equipment and automation technology.

In fact, Professor Thayer also notes that the success of the Philippine shipbuilding industry has been greatly supported by foreign investments and technology transfers. The Philippines has a long tradition of shipbuilding and repair, particularly in Subic Bay, during the time when the U.S. military was stationed there. After the U.S. Navy withdrew in 1992, Subic Bay was transformed into commercial infrastructure.

“During the time when the rankings were being assessed, the Philippines built nearly twice as many ships as Vietnam, and this difference could entirely change in the future,” Professor Thayer remarked.

Regarding Vietnam, according to Mr. Thayer, the Hyundai Vietnam shipbuilding company – a joint venture between Hyundai Mipo Shipyard (South Korea) and SBIC Vietnam – has become the largest shipyard in Southeast Asia.

Previously, as reported by Newsis, after 15 years of transitioning to the shipbuilding industry, the accumulated total of orders received by Hyundai Vietnam Shipbuilding Company (HVS) has increased to 199 orders, and the company is aiming to secure its 200th ship contract. This year, Hyundai Vietnam plans to deliver a total of 13 ships, with a revenue target of $543.8 million.

To achieve a higher ranking in the future, Mr. Carl Thayer recommends that Vietnam attract more foreign direct investment into the shipbuilding sector while also deepening and expanding domestic industrial facilities to produce raw materials, as most shipbuilding equipment and machinery in Vietnam are currently imported.

“If the shipbuilding speed of Hyundai in particular, and the shipbuilding industry of Vietnam in general, can continue to be maintained as it is now, then the gap with the Philippines will gradually narrow,” Mr. Thayer believes.

South Korea needs a supply of shipbuilding workers from Vietnam.

After the establishment of Hyundai Vietnam Shipbuilding Company in 1996, Vietnam became the 5th largest shipbuilding order receiving country in the world. Alongside this achievement, Vietnam is also recognized for having the most skilled and experienced shipbuilding workforce among Southeast Asian nations.

On July 23rd, two South Korean shipbuilding companies, Hanwha Ocean and HD Hyundai, are in need of Vietnamese labor amidst a prolonged shortage of workforce in the industry, according to TTXVN news.

In line with this, Hanwha Ocean has signed a Memorandum of Understanding (MOU) with the Vietnamese Ministry of Industry and Trade in Hanoi on July 22nd to enhance comprehensive cooperation in training and employment arrangements for Vietnamese shipbuilding workers.

“The latest memorandum aims to meet our labor needs through capacity enhancement programs conducted by vocational training institutions under the Vietnamese Ministry of Industry and Trade. We hope that this collaboration will allow us to establish a stable plan to hire skilled foreign labor,” shared a representative official from Hanwha Ocean.

HD Hyundai’s Chairman, Chung Ki-sun, also inspected the shipyard of Hyundai Vietnam Shipbuilding in Khanh Hoa in June during his visit to Vietnam as a member of the business delegation accompanying the President of South Korea.

Statistical data shows that Korean shipbuilding companies prioritize the recruitment of Vietnamese labor. The Korean Ministry of Justice compiled data at the beginning of 2023, stating that Vietnamese citizens accounted for 55.1% of the 1,595 foreign nationals granted E-7 visas between January 2022 and January 2023 for specific activities related to the shipbuilding industry in Korea.

Source: sputniknews.vn