Vietnam’s rapidly growing trade and production have pushed the cargo volume through the country’s seaports to rise by 20-30 percent per annum, making port projects appealing to foreign investors.

Cargo transported through Vietnam’s seaports rose 30 times over the past two decades

A number of Japanese firms led by Nakagaki Yoshihiko, vice president of the International Friendship Exchange Council of Japan (FEC), have recently met with Deputy Transport Minister Nguyen Van Cong to seek investment opportunities in Vietnamese port projects, especially those in the central region.

At the meeting, the firms said that they are interested in Vietnam’s planning and strategy to develop ports.

According to Cong, the central region has favorable locations for port investment and development. At present, ports are mostly located in the north and the south, while the majority of ports in the central region remains small in scale.

The Vietnamese government is planning to expand and develop ports in the central city of Danang, which is the regional economic hub and has great advantages in port development, Cong said.

Besides Japanese firms, investors from the Netherlands are also showing their interest in Vietnam’s port projects. Wanter Jacobs, regional business manager of Boskalis Inter A.V, has recently said that his group wants to join the construction of the Lien Chieu Port in Danang City.

Accordingly, Boskalis will collaborate with T&T Group to deploy this project, particularly in conducting the feasibility study, design, and build general infrastructure system in component A, Jacobs said.

Vietnam has 44 seaports with a total capacity of 470-500 million tons per year. The major ports in the country include Hai Phong, Danang, Qui Nhon, and Ho Chi Minh City. Future ports under development include My Thuy International Seaport, Lien Chieu Seaport, and Lach Huyen International Gateway Port.

Many foreign firms have so far invested in the country’s ports, including Golden Gate Construction Co., Ltd, Clearbrook Global Advisors, EMP Infra, PineStreet Infra, Boskalis, Infra Asia Investment and Molnykit (a JV between Mitsui O.S.K Lines, Nippon Yusen Kabushiki Kaisha and Itochu Corporation).

Huge potentials

High growth in Vietnam’s production and trade, especially of foreign direct investment (FDI) enterprises, has led to a sharp surge in freight traffic through the country’s ports over the past two decades.

Vietnam’s external trade increased from US$69 billion in 2005 to US$424 billion in 2017, which helped the country’s freight traffic volume in maritime transport increase sharply.

Statistics from the Vietnam Maritime Administration showed that over the past 20 years, the total amount of goods transported through the country’s seaports rose 30 times, from 3.4 million tons (532,000 TEUs) in 1995 to 165.7 million tons (14.3 million TEUs) in 2017.

The first half of this year saw an amount of 8.7 million TEUs (20-foot equivalent units) of freight containers, up 28 percent against the same period last year, and fulfilling 57 percent of the target set for 2018.

Cargo transport through Vietnam’s ports is forecast to continuously surge sharply next time thanks to the increase of FDI inflow in the country.

Ho Chi Minh City Securities Company forecast that FDI’s compounded annual growth rate (CAGR) will increase at 14 percent in the next three years, adding that the US-China trade conflict will be positive for Vietnam as more FDI firms will shift their production bases from China to the country.

According to the Transport Development and Strategy Institute, Vietnam’s seaports are expected to handle more than 200 million tons of cargo by 2020, equivalent to 19.5 million tons TEUs (20-foot equivalent units) of freight containers.

The amount would increase to 406-467 million tons (35.3 to 40.6 million TEU) by 2030.

Hanoitimes