Orders from South Korean and Dutch partners, alongside demand for offshore engineering service vessels, are creating new opportunities for Vietnam’s shipbuilding industry. Sustaining this growth will require investment in technology, workforce development and production capacity, supported by policies that enable shipyards to meet increasingly demanding international standards.
Vietnamese shipyards are undertaking a growing range of specialised vessel construction projects, including oil and chemical tankers, dredgers and offshore service vessels.
Pha Rung Shipyard is building a series of 13,000-deadweight-tonne (DWT) oil and chemical tankers for a South Korean shipowner. According to General Director Vu Huu Chien, the project forms part of a programme covering 10 vessels that began in the third quarter of 2023. The shipyard has also signed contracts and memoranda of understanding for a further 10 oil and chemical tankers of 6,500 DWT for a South Korean partner, providing a pipeline of work extending to 2030.
These Handysize vessels are designed to transport oil and chemicals and must meet stringent technical requirements, particularly for environmental protection and leak prevention. Labour costs for each 13,000 DWT vessel are estimated at approximately $7 million, against a total vessel value of around $28 million.
Nam Trieu Shipyard is engaged in several vessel construction projects, including two 65,000-tonne cargo ships. The yard has also completed a 2,300-cubic-metre dredger for Dutch partner IHC and built a 9,300-cubic-metre oil tanker for a domestic customer. These projects require specialised engineering and compliance with demanding construction standards.
Ha Long Shipbuilding Company is focusing on construction of commissioning and service operation vessels (CSOVs) and other offshore engineering support vessels. General Director Tran Van Manh said the company intends to prioritise export-oriented vessel segments, particularly those requiring advanced technical capabilities.
Demand from international customers is providing greater visibility for shipyard workloads. Orders from South Korean customers are scheduled through 2035, while projects for Chinese customers extend through 2030. Shipowners from Europe and other markets are also exploring Vietnam’s capabilities in building smaller vessels and specialised service ships.
International partnerships are contributing to improvements in production processes and technical expertise. During construction of CSOVs for Damen, Ha Long Shipbuilding Company received assistance with safety management, inspection procedures, problem-solving and production management.
Higher-value orders and industrial development
Export-oriented vessel construction can generate substantially greater value than some domestic projects. According to Ha Long Shipbuilding Company, labour costs for certain domestic orders are approximately VND20,000 per kilogram of steel, while export vessels can command $3 per kilogram or more, equivalent to around VND80,000–90,000 per kilogram.
These higher-value projects offer opportunities for Vietnamese shipyards to improve their technical capabilities, modernise production facilities and strengthen their position in international supply chains. However, higher contract values also bring more demanding requirements for technical specifications, quality assurance, safety, delivery schedules and workforce skills. Profitability therefore depends not only on unit prices but also on productivity, cost control and efficient production management.
For shipyards, a stable pipeline of export orders can support employment, machinery investment, factory upgrades and improvements in employee benefits. Pha Rung has projected average annual revenue growth of 14% over the 2021–2025 period, while Nam Trieu and Ha Long have reported workloads extending through 2028 and 2030, respectively.
International projects can also facilitate the adoption of modern technologies and management practices. Experience gained from complex vessel construction may help shipyards improve quality standards, expand their product range and establish relationships with additional international customers.
Ha Long Shipbuilding Company’s experience illustrates the potential benefits of building a strong export track record. Following construction of the 110-metre yacht Emerald Azzurra for Scenic Tour Group, the company received enquiries from prospective customers in Singapore and other markets.
Vietnam’s shipbuilding capacity provides a foundation for further development. According to Nguyen Tien Dat, Deputy General Director of the Shipbuilding Industry Corporation (SBIC), the corporation’s eight key shipbuilding enterprises can construct approximately 1.23 million tonnes of new vessels annually and repair around 654,000 tonnes per year. These enterprises employ nearly 10,000 workers. SBIC and joint ventures, including Hyundai Vietnam and Damen–Song Cam, account for approximately 65% of the country’s shipbuilding capacity.
Investment and policy support
Expanding into more technically demanding vessel segments will require sustained investment in production equipment, digital systems, workforce training and environmentally efficient technologies. However, limited access to capital, ageing machinery and fragmented investment continue to constrain some shipyards’ ability to modernise.
At Pha Rung, management has identified limitations in equipment installed 10–20 years ago. The shipyard is evaluating investments in laser-cutting technology, welding robots and automation systems to improve productivity and meet modern production requirements.
Nguyen Tien Dat has also noted that some facilities can only upgrade individual production stages, such as introducing management software or purchasing equipment separately, rather than investing in fully integrated production lines.
Bui Thien Thu, Permanent Vice President of the Vietnam Association of Ports, Waterways and Continental Shelf, has proposed including shipbuilding and maritime supporting industries among sectors eligible for special investment incentives.
He has also advocated medium- and long-term financing programmes of approximately 10–15 years with stable preferential interest rates. Such financing could support new vessel construction, production facility upgrades and the transition towards greener vessel technologies.
Another proposed measure involves reforming collateral requirements for shipbuilding finance. Under this approach, vessels constructed using borrowed capital, or under long-term shipbuilding or leasing contracts, could be accepted as collateral rather than requiring businesses to rely primarily on land and real estate assets.
Additional proposals include corporate income tax incentives for projects that expand domestic shipbuilding capacity and develop supporting industries.
Access to suitable financing and investment incentives could help Vietnamese shipyards modernise their facilities, improve productivity and meet increasingly demanding international requirements. Combined with technical cooperation and workforce development, these measures could strengthen the industry’s ability to secure specialised export contracts and participate more extensively in the global shipbuilding supply chain.
