Shipbuilding industry on threshold of New Era

From Bach Dang’s “perspective”

“In 2024, we carried out a contract to build a 22,000 DWT cargo ship. Although this was not a new product, with outdated and old equipment and 150 remaining staff and workers, we still completed the processing and manufacturing of nearly 5,000 tonnes of steel for the ship, which can truly be considered a miracle.

Previously, a KCS (product quality control) department had more than 20 people, now there are only 2 people left, each doing 3 different jobs, working day and night, trying every way to maintain the company’s operations.

In September 2024, when the 17,500 DWT Truong An Ship built by Bach Dang was handed over to a domestic shipowner, on the first trip carrying rice to the Philippines, we made a big profit, we were so happy that we cried”, Engineer Nguyen Ba Son, Deputy General Director of the Company Bach Dang Shipbuilding Company recalled with emotion.

After the Vinashin incident, Bach Dang Shipbuilding Company was perhaps the most heavily affected unit, with only 3-5 people left in each department; the technical department, the “heart” of the unit, was also almost completely gone. Engineers like Son, who had worked for more than 20 years, were still considered “young engineers” of the company.

In 2023, when building two 13,000 DWT cargo ships, some newly recruited workers had never directly participated in launching a ship. Before launching, for many days in a row, the technical staff had to sit together on the slipway until past midnight to discuss the launching plan, come up with hypothetical situations and find solutions.

In its heyday, Bach Dang was considered the “big brother”, a symbol of the Vietnamese shipbuilding industry, with a massive scale: more than 3,000 workers and a series of large shipbuilding contracts.

However, the advantages of the past have become disadvantages today: located in the inner city, between the intersection of Cam, Ha Ly and Tam Bac rivers, the urbanisation process in Hai Phong is taking place too quickly, the river mouth is heavily silted, each year the company has to spend tens of billions of dong dredging the hydroelectric area. Both the front and back of the company are blocked by Binh and Hoang Van Thu bridges, the clearance height is 25m, limiting the entry and exit of ships with a capacity of more than 3,000 tonnes, the company’s slipway equipment, piers, large cranes, etc. cannot fully utilise their design functions.

Engineer Nguyen Ba Son said that if in the past, Bach Dang could undertake to build ships with a capacity of up to 45,000 DWT, now it can only build ships of 22,000 DWT or less, with the condition that some equipment on the deck must be installed after the ship is launched and moves across the bridge. That situation forced the company to choose special ships such as oil-chemical tankers and liquefied gas carriers, which, although small in capacity, have high technical features and bring great value.

Recently, Bach Dang Shipbuilding Company was the first unit in Viet Nam to successfully build an independent liquefied gas (LNG) tank on a liquefied gas ship with a capacity of 4,500 m3 for export to Italy.

Workers of Song Cam Shipbuilding Company construct a tug-push ship for the ship owner Damen (the Netherlands).

This is a very high-tech product with complex construction. The company’s officers and engineers have researched and coordinated with the ship owner to invest in equipment to carry out the construction. Liquefied gas tanks are made of high-grade steel, welded using new technology, ensuring that the steel plates are joined together to form a block and withstand high pressure, with the liquefied gas kept at a temperature of minus 100 degrees Celsius.

Liquefied gas carriers take twice as long to build as regular cargo ships. The first one took a long time for the Vietnamese registry to study, approve, and classify the ship. Up to now, the ship has been completed and is expected to be handed over at the end of May.

“Bach Dang is building a new 9,300 m3 oil-chemical tanker, expected to be launched in early June and delivered in October. In addition, the company is also building two 6,600 DWT cargo ships, aiming to deliver them by the end of this year. At the Vietship Exhibition in early March, the company signed a contract to build a new series of three 13,000 DWT oil tankers, thereby maintaining enough jobs for workers until 2027,” said engineer Nguyen Ba Son.

Standard for SBIC’s sustainable development

Dr Pham Hoai Chung, Chairman of SBIC’s Board of Members, said that Viet Nam has nearly 90 shipbuilding enterprises and more than 400 inland waterway vehicle manufacturing facilities, with a total new building capacity of about 3.5 million DWT.

The Vietnamese shipbuilding industry possesses a system of new shipbuilding factories spread across the country, with diverse production capacity, but there are still many limitations, especially in terms of technology, production capacity and competitiveness.

In the Marine Economic Development Strategy, the shipbuilding industry is assessed to have the widest influence, but in reality, it is necessary to have the "hand" of regulation from the State through specific mechanisms and policies to promote breakthrough development of this industry.

“In 2013, the Government approved the SBIC restructuring roadmap, retaining eight core units and currently, these units are still able to build strong, highly competitive products. In 2023, Viet Nam ranked 7th among the leading countries in shipbuilding capacity, surpassing Finland, a “big” global shipbuilding country,” Dr Pham Hoai Chung assessed.

Viet Nam has a fairly abundant labour force in the shipbuilding industry, with lower labour costs than many countries in the region, creating a competitive advantage in product prices.

The Government has many policies to support the development of the shipbuilding industry, including promoting links with international partners, encouraging investment in infrastructure, and supporting technology modernisation.

Maritime experts calculate that with the development of global trade, the average growth rate of the world's shipbuilding industry is about 4%/year and will reach about 195 billion USD by 2030. The Vietnamese shipbuilding industry faces many new opportunities from the macro environment and the shifting trends of the world shipbuilding market.

According to Deputy Minister of Construction Nguyen Xuan Sang, recently, implementing the policy of the Politburo, the leaders of the Ministry of Construction have worked with all major shipyards of SBIC, thoroughly implementing the spirit of “bankruptcy is not erasure”, with the highest goal of cutting old debts and businesses still maintaining production, ensuring social stability. This is the “journey” for the Vietnamese shipbuilding industry.

The world shipbuilding market is assessed to have passed the stagnant period and is rapidly recovering. To seize this “golden opportunity”, relevant units and authorities are urgently promoting and completing bankruptcy procedures to revive the production capacity of factories and minimise waste. “The proposed bankruptcy plan and roadmap for SBIC is to divide the factory’s assets into two packages, including the production line and other assets, and conduct an auction first for the production line package. When an investor is found and the production line is taken over, bankruptcy proceedings will be announced, the new shipyard will be “reborn” immediately, and the other asset packages will be auctioned.

“We hope and always make information clear for many units and organisations to participate. In principle, all economic sectors are not restricted, except for foreign enterprises that will study and control the appropriate capital contribution ratio. We consider this a plan with many advantages, does not interrupt production, and does not greatly affect economic contracts being implemented with foreign partners,” said Deputy Minister Nguyen Xuan Sang.

According to economic experts, the potential of Viet Nam’s shipbuilding market is very large. To enhance the competitiveness of the shipbuilding industry in the context of international economic integration, first of all, Viet Nam needs to make good use of the shifting trend of the world's shipbuilding industry, along with the country’s existing potential. The strategy for sustainable development of Viet Nam’s marine economy to 2030, with a vision to 2045, has set out a policy for the reasonable development of the shipbuilding and repair industry.

Over the past time, the shipbuilding industry has affirmed its mission and importance in the cause of developing the country’s economy, ensuring national security and defence as well as participating deeply in the international cooperation process. This is a heavy industry of fundamental nature, requiring large infrastructure investment and needs to be preserved and developed for a maritime country like Viet Nam.

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