Opinions from a well-informed circle say South Korean and Japanese “big guys” would jump into the Vietnamese shipbuilding industry. Does it mean the shipbuilding industry will be saved?
The news that Samsung Heavy Industries, belonging to Samsung Group and 16 other South Korean enterprises in supporting industries have had a meeting with Vietnamese partners appeared on all local newspapers in late October 2013.
Cheolhwa Jung, CEO of Samsung Heavy Industries, said the businessmen came to Vietnam to lay a foundation for a new strong investment wave in 2014. Meanwhile, a member of the group of businessmen said setting up a shipyard in Vietnam under the mode of joint venture or 100 percent foreign owned enterprise is a Samsung’s business plan for short term.
The shipbuilding industry has been named as one of the six priority industries in the Vietnam’s industrialization strategy set up within the framework of the Vietnam – Japan cooperation program by 2020.
This means that Vietnam has shown its strong determination to continue developing the shipbuilding industry, despite the failure of Vinashin, the “eldest brother” in the industry.
Vinashin, now short for Shipbuilding Industry Corporation (SBIC), has undergone a restructuring process and got ready for the new opportunities.
However, analysts believe it is still too early to say if the presence of South Korean and Japanese investors would help revive and develop the industry. The joint venture of Hyundai – Vinashin has not succeeded as expected. Meanwhile, there is not adequate information to comment about the cooperation with Japan. Especially, everything would still heavily depend on the macro activities.
Phan Vinh Tri, a former middle class manager at Vinashin, who devoted his whole life to the shipbuilding industry, noted that it is a very difficult task to draw up an action plan to develop the industry.
Tri believes that the number of the experts who have deep understanding about the modern shipbuilding industry and competitive industrial economy remains very modest.
The shipbuilding industry development master plan by 2020 with the vision until 2030–which has been submitted to the Prime Minister for consideration, and proves to be unconvincing to Tri and some other experts.
Also according to Tri, the measure of “strengthening the administrative procedure reform” mentioned in the strategy is not a “breakthrough.”
“Japan would still have to wait and argue with Vietnam before it makes investment, especially about the “heritage” of Vinashin,” Tri commented.
Regarding the investment mode of joint venture or 100 percent foreign owned enterprises that South Korean think of, Tri said the foreign investors would still have to consider their plans thoroughly to find out if making investment is a wise move in the context of the unrecovered economy, abundance of ships and oversupply.
The Vietnamese side would prefer to establish joint ventures or sell old Vinashin’s shipyards. In order to do that, it will have to assess the value of the assets, while it will be really a complicated procedure, unless Vietnam accepts to sell the assets at low prices.
In principle, South Korean and Japanese investors only come to Vietnam if they can see the opportunities to make money. Therefore, it is the good news that they would make investment in Vietnam, but it is too early to be optimistic about this.