Vietnam is in the top 7 shipbuilding powers in the world

Shipbuilding industry is a special industry. A report from Market Reports World indicates that activity in this area is on a booming trend.

The global shipbuilding industry is valued at an estimated $167 billion in 2022 and is expected to experience a compound annual growth rate (CAGR) of 5.45% between here and 2028, estimated to be worth $229 billion by the end of the forecast period.

Recently, Insider Monkey (USA) has made a list of Top 15 shipbuilding powers in the world , based on data from the United Nations Conference on Trade and Development (UNCTAD), which lists the percentage of ships built (compared to the global) in 2021 of countries.

Notably, Vietnam is in 7th place, with the percentage of ships built in 2021 at 0.61%. Ranked in the upper positions are Germany (0.63%), Italy (0.82%), Philippines (1.06%), Japan (17.6%), South Korea (32.4%), and China (44.2%).

Song Thu Corporation held the launching ceremony of the new construction MUC 1908 ship for Damen Group (Netherlands). Photo: Ship Industry Magazine

According to Insider Monkey , Vietnam has quite a strong shipbuilding potential with more than 100 ports and nearly two dozen shipyards.

However, according to domestic statistics, these numbers are much larger. In April 2022, the Ministry of Transport issued Decision No. 552, which added 10 new ports to the list of ports belonging to Vietnam’s seaports, bringing the total number of ports nationwide to 296.

Meanwhile, according to the Vietnam Maritime Administration, across the country, there are 97 shipyards with tonnage of 1,000 DWT or more and there are 68 factories for building and repairing ships. The total design capacity of the new factory is up to 2.6 million DWT/year.

Annual shipbuilding output increased 10 times

According to the Vietnam Shipbuilding Industry Research Report 2023-2032 on "Research and Markets" - the world’s largest market research database platform, Vietnam’s shipbuilding industry is developing rapidly,

In general, the market share of Vietnam’s shipbuilding industry has been on an increasing trend in recent years, with the support of an economy with a sustainable growth rate, along with a growing chain of manufacturing and supporting industries.

From July 5-7, Vietnam Shipbuilding and Marine Machinery Equipment Exhibition (VIMOX 2023) was held for the first time in Hanoi, with the participation of more than 100 marine units from many countries around the world.

Visitors to VIMOX 2023 exhibition. Photo: Tran Quoc Viet/VNA

At the exhibition, experts and participants especially appreciated the position of Vietnam’s maritime industry, as well as the great potential of the shipbuilding industry.

According to Mr. Kenny Yong, General Director of Fireworks Trade Media Corporation, VIMOX 2023 can be considered an important turning point for the global shipbuilding industry in general and Vietnam in particular.

The large participation of marine units from all over the world is a testament to the development potential of Vietnam’s shipbuilding industry.

Dr. Hoang Hung, Vice President and General Secretary of the Shipbuilding Industry Science and Technology Association said : "Vietnam’s annual shipbuilding output has increased tenfold compared to the 1990s" .

The competitive force cannot be underestimated

Commenting on the position of Vietnam’s shipbuilding industry, Mr. Kenny Yong said that, with strategic geographical advantages, long coastline, and skilled workforce, Vietnam’s shipbuilding industry has emerged as "a competitive force that cannot be underestimated" .

General Director of Fireworks Trade Media Group emphasized, Vietnam has an important maritime geographical position - where many maritime routes pass, and at the same time is an attractive destination for many countries.

"The potential for Vietnam’s shipbuilding market is huge. Therefore, cooperation in the field of shipbuilding and shipbuilding technology is extremely important," said Mr. Yong.

According to the report on Vietnam’s shipbuilding industry of the OECD, shipbuilding is one of the major industries in the economic development strategy of Vietnam.

The capacity of shipyards in Vietnam really had a big change when Hyundai Vietnam [joint venture between Hyundai Mipo Shipyard (Korea) and Shipbuilding Industry Corporation (SBIC - Vietnam)] moved into the new shipbuilding field.

After 15 years, the cumulative total number of orders received by Hyundai has increased to 199 orders and the company is aiming to win the 200th ship. Currently, Hyundai Vietnam Shipbuilding Company has become the largest shipyard in Southeast Asia.

Troop transport (landing/logistics) Roro 5612-YN 541048 newly built by Vietnam for Venezuela. Photo: Government newspaper

In 2020, dozens of high-class Vietnamese patrol boats have exported to Africa. That is not to mention the previous orders to build amphibious ships and patrol boats for Venezuelan partners. These developments highlight the global ambition of Vietnam’s shipbuilding industry.

In Southeast Asia, according to Research and Markets, the shipbuilding industry of the Philippines and Vietnam is considered the most developed, while the shipbuilding capacity of Indonesia, Malaysia, Thailand, Cambodia and Myanmar is relatively weak, due to the relatively small tonnage of ships built in these countries.

In the ranking of Insider Monkey, it can be seen that the Philippines is the only Southeast Asian country that is in the top 5 shipbuilding powers in the world, occupying 4th place in the ranking.

Regarding this aspect, the "Report on Shipbuilding Industry in Emerging Asian Markets" by marine engineering services company Inserve (based in London, UK) said that shipyards in the Philippines have thrived through joint ventures with foreign enterprises such as Tsuneishi, Keppel and FBM.

These joint ventures facilitated the transfer of technology, while at the same time providing better monitoring, management and higher standards.

Without technology transfer from countries/regions that already have a sustainable shipbuilding industry such as Korea, Japan, and European countries, and without strong investment in equipment and automation technology, the results of the Philippines may not be the same.

Meanwhile, evaluating Vietnam, Inserve said that Vietnam’s shipbuilding industry is expected to rise to the 5th, even 4th position in the global ranking , just behind the 3 "big guys" namely Japan, Korea and China.

According to Inserve, Vietnam has a separate development direction compared to emerging countries in the region. The participation of joint venture companies and the investment and attention policies of the State have promoted Vietnam’s shipbuilding industry to develop more and more.