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Binh Dinh shipbuilding losing ground
During the ‘golden age’, the Hoai Nhon Seafood Joint-Stock Co received 15-20 contracts every year to build vessels of over 90HP.
However the age lasted all of five years, from 1998 to 2002. In the last three years it has had just 7-8 orders.
The company’s predicament is common to many shipbuilders in the central coastal province of Binh Dinh.
Truong Van Lam, deputy manager of the company, says they used to get customers coming from provinces of Kien Giang, Ba Ria–Vung Tau, Thanh Hoa and Quang Binh, but now the few they do have are all local residents.
Binh Dinh’s traditional vocation of building high-capacity ships for off-shore fishing dates back to the 1890s, when fishing became the local residents’ main source of income. In the late nineties, the vocation enjoyed a resurgence as the Government redeveloped off-shore fishing and gave soft loans to local fishermen to rebuild their lives after the massive damage inflicted by storm Linda at the end of 1997.
This provided the shipbuilders a golden opportunity to expand their business.
The number of shipbuilding plants as well as orders from inside and outside the province increased dramatically.
In its golden age, the province had more than 40 shipbuilding plants along the De Gi, Tam Quan, and Qui Nhon beaches, building about 500 high-capacity fishing vessels each year, and providing 2,500 labourers with stable jobs.
The Ngoc Chau Ltd Co in Phu Cat District’s Cat Minh Commune, one of the popular shipbuilders, had 80 workers, and built 20–30 ships a year from 1998–2002.
However, in 2003, the Government stopped developing the off-shore fishing projects and giving financial support to build new vessels. In addition, the banks would not lend local shipbuilders any more money before they settled outstanding debts.
Since then, the shipbuilding industry in the province has been in decline. In the last three years, the province has had just 15 shipbuilders employing about 1,000 workers.
To make things more difficult, orders for building high-capacity vessels have also dropped. All the plants combined are able to attract just 60–70 contracts a year now.
The Ngoc Chau Co has built only one ship of 90 HP since the beginning of this year. It has reduced the number of employees by 30. In the first nine months of 2008, the Hoai Nhon Co received five orders from local fishermen and hired 50 labourers to complete them.
Yet another factor that is pushing the shipbuilding trade into oblivion is the increase in production costs.
Shipbuilders say that raw materials are so rare that they have to import timber at high prices, pushing current prices to levels more than twice as high in 2000.
Many local shipbuilding plants have had to close or start new businesses, says Lam.
His plant now focuses on repairing and painting ships, he adds.
Nguyen Ngoc Chau, director of the Ngoc Chau Ltd Co, says his plant now repairs ships and focuses on expanding its forestry product processing firm rather than shipbuilding.
VNN
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