Wind in shipping firms’ sails

illustration photo

According to the London-based Business Monitor International’s (BMI) Vietnam Freight Transport Report for 2011’s third quarter, Japanese interest in Vietnam’s ports and shipping industry was surging.

“The Japanese government, investors, contractors, and shipping lines are all looking to get involved in the Vietnamese ports and shipping sector,” the report said.

BMI cited Japan’s Kobe Steel as saying it would build its own $244-$365 million port in Vietnam to secure iron nugget supplies.

Mitsui OSK Lines (MOL) would deploy Europe-bound container vessels for the first time that will have a handling capacity of 6,500, 20-foot equivalent units (TEUs). The vessels would call at a port near Ho Chi Minh City in southern Vietnam. MOL will operate 10 such vessels through Vietnam on a weekly basis.

Furthermore, Nippon Yusen Kabushiki Kaisha (NYK) was to launch freight services between South East Asian countries in association with state-run Vietnam National Shipping Lines.

Kawasaki Kisen Kaisha (K-Line) along with a Vietnamese logistics firm would establish a joint venture in Hanoi to operate an international freight forwarding business by sea and air. The venture was also considering establishing a branch in Ho Chi Minh City.

Meanwhile, Japan International Cooperation Agency was funding the bulk of the 140 billion yen ($1.7 billion) to Lach Huyen new port project in northern Hai Phong city.

“BMI believes that this project highlights the importance of foreign investment in Vietnam’s port infrastructure, due to its implications for the country’s growth,” said the report.

According to the French embassy’s Ubifrance Trade Office, the recent exploration of investment and cooperation opportunities by seven French shipbuilding industry firms was followed by promising results.

The firms worked with the Ministry of Transport, Vinashin and its member companies, as well as many local shipping firms. “The meetings have led to possible contracts and cooperation in technology transfer,” said the Ubifrance Trade Officea source.

The French firms, including Moteurs Baudouin, Masson Marine, Marinelec, Barillec, Leroy Somer, Groupe Budd and Le Bronze Industriel, wanted to introduce to Vietnamese officials and firms their advanced technologies, equipment, services, ship designing technologies and industrial production processes. Most of them are based in Singapore and need Vietnam to extend their business in South East Asia.

In early April, this year local media cited global power systems firm Rolls-Royce as trumpeting that it was to develop the largest ship lift in Asia, in Haiphong. This project, expected to be completed in 2012, would comprise a platform 179 metres long, 35m wide with a maximum net lifting capacity in excess of 23,000 tonnes. An extension would raise the platform’s length to 225m and the maximum net lifting capacity to more than 28,000 tonnes.

Vietnam’s port infrastructure remains poor by international standards. The World Economic Forum’s 2010 Global Competitiveness Report gave it a score of 3.56, putting it just ahead of the regional underperformer, the Philippines, which scores 2.92, and well behind regional leaders Singapore and Hong Kong.

“Increasing international interest in Vietnam’s port sector on the back of growing intra-Asia trade should help to close the gaps in infrastructure investment. Vietnam is becoming increasingly important, not just to growing Intra-Asian trade, but also on the global stage.

“An increasing number of shipping companies are choosing Vietnam as their port of call as they ply the East-West trade route,” the BMI report said.