S Korea shipbuilders bank on Vietnam as nations plan to double two-way trade

Major South Korean shipbuilders Hanwha Ocean and HD Hyundai are eyeing fresh energy from Vietnam as the two countries seek to double bilateral trade by 2030 to $150 billion.

Hanwha Ocean signed a memorandum of understanding (MoU) with the Vietnamese Ministry of Industry and Trade (MoIT) on July 22 to train Vietnamese shipbuilders for the former to employ.

Four weeks before that, Hanwha Group vice chairman Kim Dong-kwan and HD Hyundai president Chung Ki-sun joined a 205-strong business mission accompanying South Korean President Yoon Suk Yeol on his state visit to Vietnam from June 22-24 to boost economic and trade ties.

On July 21 in Seoul, South Korea's Ministry of Trade, Industry and Energy held an inaugural meeting with trade officials from the Vietnamese Embassy to discuss details of the establishment of the "Korea Plus in Vietnam" task force under the Seoul government and the "Vietnam Plus in Korea" team under the Vietnamese government.

The two task forces will be in charge of exchanging information on trade and industry developments, supporting exporters, and exploring business opportunities, according to the South Korean ministry.

For Hanwha Ocean, the major South Korean shipbuilder expects its partnership with MoIT to enable it to establish a firm plan to hire skilled Vietnamese workers.

Vietnamese multi-business company Green Peace Holdings, known as GP Holdings, is also involved in the comprehensive cooperation as the domestic corporate partner to facilitate related works.

GP Holdings serves as a tier-one supplier for South Korean tech giant Samsung in Vietnam. It is also an established supplier of Vietnamese workers for overseas markets, including South Korea and Japan.

The MoIT said it would work with 31 colleges and universities across the country to train students in majors related to shipbuilding, including engine technology, chemical technology, mechanics, materials, and paints.

A week before the South Korean President’s Vietnam visit, HD Hyundai said Hyundai Vietnam Shipbuilding Co. in the south-central coastal province of Khanh Hoa had obtained an order to build two oil and chemical tankers for an African shipping company. The African firm’s name and details of the deal’s financial terms were not disclosed.

While accompanying the South Korean President in Vietnam, HD Hyundai president Chung Ki-sun inspected the facility, South Korea's first overseas shipyard.

"HD Hyundai was able to achieve excellent results in Vietnam thanks to the hard work of its executives and employees despite unfavorable circumstances," the Korea Times quoted him as saying at the time. "I will continue to work harder for Hyundai Vietnam Shipbuilding to write a model success story representing the Korean shipbuilding industry."

This $350-million shipyard now employs around 5,000 local workers, according to its website. Hyundai Vietnam Shipbuilding president Lee Jong Chan writes on his company’s website that the factory, which entered the building business in 2008, has so far successfully delivered over 160 new vessels.

Hyundai Vietnam Shipbuilding has plans to develop its labor force in Vietnam. In July 2022, its representatives met with leaders of Danang University of Technology to discuss training Vietnamese shipbuilding students.

Hyundai Vietnam Shipbuilding was formed in 1996 as a joint venture between South Korea’s Hyundai Mipo Dockyard Co. and Vietnam's state-run Shipbuilding Industry Corp. to represent South Korea's first overseas shipyard, and started operations in 1999. Hyundai Mipo Dockyard is part of HD Hyundai.

World-leading shipbuilder Hyundai Heavy Industries Holdings announced this February its new name of HD Hyundai, with HD standing for Human Dynamics.

Hyundai Vietnam Shipbuilding accounts for 40% of Khanh Hoa province’s annual export value, according to provincial data.

Data compiled by South Korea’s Ministry of Justice earlier this year showed that Vietnamese nationals accounted for 55.1% of 1,595 foreigners in the country who received E-7 visas between January 2022 and January 2023 for specific activities related to shipbuilding, the Korea Times said.

The Vietnamese shipbuilding sector’s compound annual growth rate (CARG) between 2023 and 2032 is forecast at 6%, global research firm Research and Markets said in its “Vietnam Shipbuilding Industry Research Report 2023-2032” released on June 1.

“Vietnam’s shipbuilding industry also exports ships to international markets, including merchant ships, offshore support vessels, and fishing vessels. Major export destinations include Europe, Asia, and the Middle East,” the report said.