VietNamNet Bridge – The Prime Minister on Wednesday approved an action plan to develop the shipbuilding industry into a key industry under the implementation of Viet Nam's Sea Strategy by 2020.

A welder at Ha Long Shipbuilding Company in northeastern Quang Ninh Province works on a ship. The action plan newly approved by the PM focuses on restructuring shipbuilding factories nationwide and developing a shipbuilding support industry.

The shipbuilding industry plays a very important role in the development of the marine economy, which was identified as a major driver in the Sea Strategy of Viet Nam, a country with a 3,260km-long coastline and 1 million sqm of exclusive economic zones.

The country's shipbuilding industry suffered the impact of the 2008 global financial crisis, which led to a comprehensive restructuring of the country's leading shipbuilder, Vinashin.

The action plan pointed out that shipbuilding factories are scattered throughout the country, with few factories meeting international standards.

The development of a support industry for shipbuilding is slow and has failed to meet the demand for localisation.

The industry also faced a shortage of high-quality human resources and capital for research and development.

To tackle these problems, the plan focuses on restructuring shipbuilding factories nationwide, developing a shipbuilding support industry, maritime transport market and ship repair service, as well as human resources, and building capacity for research and development (R&D).

Accordingly, three shipbuilding clusters will be established together with the foundation of an R&D centre in the north.

In addition, tax and credit incentives will be given, together with simplification of tax and customs procedures.

The Ministry of Finance will review the tax incentives for imported materials and spare parts, and propose a list of beneficiaries in line with the tariff reduction road map for the ASEAN Free Trade Area (AFTA) and the World Trade Organisation (WTO).

The plan targets the shipbuilding industry output's value growth at 5 to 10 per cent by 2020. About 70 to 80 per cent of the production capacity will meet the domestic demand for socio-economic development and national security.

Viet Nam currently has 120 shipyards that build different types of ships, with the lowest capacity being of 1,000 DWT, which provides an important technical basis for the expansion of the entire industry.

VNS/VNN