Vietnam - Ship industry hits choppy seas

Vietnam’s underdeveloped maritime industry and the Vinashin scandal are preventing the country from keeping foreign direct investment in the industry buoyant.

S.Y. Chan, Asia-Pacific regional manager of ship equipment manufacturer German-invested Van Der Velden Group, said he had come many times to hunt investment opportunities in Vietnam.

“But we haven’t made any investment decisions in the country as its maritime industry has developed very slowly without any investment priorities and the Vinashin scandal has also blighted our investment decisions here,” Chan told VIR at last week’s Asia Pacific Maritime Exhibition 2012 in Singapore.

Vinashin had a shameful history with total liabilities of VND86 trillion ($4.5 billion) uncovered in 2010, with its mismanagement making big headlines in foreign and local media, heating up National Assembly meetings.

He said costs for constructing a factory in Vietnam were two or three times higher than in China or South Korea, with high taxes in Vietnam. “Not only my company, but also many of our foreign partners all say that it is quite unprofitable to invest into Vietnam’s maritime industry now.

How can the government protect foreign maritime investors’ benefits if its investment policies are now in favour of state-run enterprises like Vinashin, EVN (Electricity of Vietnam) or PetroVietnam, not foreign private ones like us?” Chan said.

Chan was just among representatives from 30 foreign maritime firms at the exhibition who told VIR Vietnam’s maritime industry was the “least attractive” in South East Asia.

No Vietnamese-invested maritime company could be found at this event while several hundreds of companies from regional countries like Malaysia, Singapore, Brunei, Indonesia, the Philippines and Thailand could be seen at the event. The representatives noted that though Vietnam had 320 wharves, these wharves were substandard, while foreign firms could benefit almost nothing from the government’s investment policy in terms of taxes and sites.

Gabriel Pozzer Kuhleis, condition monitoring engineer from Germany-based Pruftechik Group - which currently has a representative office in Vietnam, said this group’s revenue from selling maritime equipment in Vietnam occupied only nearly 3 per cent of its total revenues from the South East Asian maritime market.

“We have yet to decide when we will directly implement investment projects. We will wait until the market becomes more attractive,” Kuhleis said.

Thanh Dat | vir.com.vn

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