The international online conference “Russia-Vietnam: prospects of international cooperation in the field of shipbuilding” took place on the 19th of May.
The event was held by the organizers of NEVA exhibition with the assistance from the Ministry of Industry and Trade of the Russian Federation, Autonomous Non-profit Organization “St. Petersburg Export Support Center” and Vietnamese Council for foreign trade promotion (Vietrade). The language partner is the translation company EGO Translating SB LLC.
Among the invited experts there were representatives of the Department of the shipbuilding industry and marine technology of the Ministry of Industry and Trade of the Russian Federation, the trade mission of the Russian Federation in Vietnam, the largest shipbuilding associations of Vietnam, research centers, as well as manufacturers of ships and equipment from the two countries. The conference participants learnt about the innovative developments of Russia and Vietnam and were able to exchange their experience with the colleagues.
Vietnam is one of the Russia’s core partners in the Asia-Pacific Region. At a time when the world trade saw the overall decrease due to the pandemic, the commodity turnover between Russia and Vietnam in 2020, on the contrary, grew by 15% to reach 5.67 billion dollars. The exports of ships, boats and floating structures increased by 48% (from 10 to 14.9 million dollars), the imports virtually stopped, falling from 18.6 million to 277 thousand dollars.
According to Ilya Pomylev, the head of the Division for the civil marine equipment, accounting and management of intellectual activity results of the Department of the shipbuilding industry and marine equipment of the Ministry of Industry and Trade of the Russian Federation, the non-resource-based exports and profound industrial cooperation, in particular, in the field of shipbuilding, are unconditional points of further growth in the bilateral trade.
The cost of the Russian shipbuilding market in 2020 grew by 67% and reached 230 billion roubles. More than 40% of the overall cost of the delivered vessels is accounted for by icebreakers and superships. In particular, the Baltic Shipyard, a member of the United Shipbuilding Corporation, completed the construction of the lead atomic icebreaker “Arktika” with a 60 MW capacity, and Admiralty Shipyards delivered the diesel-electric icebreaker “Viktor Chernomyrdin” with a 25 MW capacity to Rosmorport. “Zvezda” Shipbuilding Complex delivered the lead tanker Aframax “Vladimir Monomakh” of 114 deadweight thousand tons to Rosnefteflot.
Also, dry-cargo vessels, barges and special vessels of the service fleet are among the leaders in commercial shipbuilding as far as the number of delivered vessels is considered. According to Ilya Pomylev, the promising areas will be represented by supership building, fishing and icebreaking fleets up to 2030. As it may be seen from the long-term plan, the Ministry of Industry and Trade of the Russian Federation for the period up to 2035 plans the construction of more than 1,000 vessels of various types.
Currently, Vietnam buys mainly military vessels from Russia, but the Russian companies are ready to offer a range of commercial vessels for sea and river transportation. On the other hand, Russia has experience in ordering vessels from Vietnam. For example, the shipyard of Song Thu Corporation produced the dredging vessel “Severnaya Dvina” for Rosmorport in 2015.
Moreover, Russia and Vietnam are cooperating in marine infrastructure improvement and offshore deposit development. Since 1981 the Russian-Vietnamese joint venture Vietsovpetro has been operating; now it includes 16 divisions that are engaged in oil and gas prospecting, exploration and production. Now the joint venture's specialized fleet numbers several dozen vessels and is constantly upgraded, thus offering numerous opportunities for cooperation between Russian and Vietnamese shipyards.
The Ministry of Industry and Trade of the Russian Federation, for its part, is always open to dialogue and ready to assist in the development of trade relations between Russia and Vietnam, as Ilya Pomylev assured.
Duong Hoan Minh, the commercial counsellor of the Embassy of the Socialist Republic of Vietnam in the Russian Federation, noted that Vietnam is the Russia's largest trade partner in ASEAN and ranks fifth in APEC after China, the United States, Korea and Japan. “In the first quarter of 2021, the commodity turnover between Vietnam and Russia increased by 27% as compared to the same period in 2020, which is a result of the joint efforts by both countries, - Mr. Duong Hoan Minh said. - The positive trend will continue in the nearest future. In addition to close cooperation in the field of military shipbuilding, it is important to cooperate in the commercial segment, since every opportunity and prerequisite are available for that. We are ready to coordinate and support entrepreneurs of the two countries to expand partnership”.
In his turn, Vyacheslav Kharinov, the trade representative of the Russian Federation in Vietnam, confirmed that the bilateral cooperation is rising and listed a number of areas for strengthening the cooperation. First of all, these are the construction of cruise liners (before the pandemic Vietnam was visited by more than 16 million tourists annually, of which about 700 thousand were the Russians), supply of high-speed ships (agreements of the kind already existed earlier, but they have not been developed any further so far), including those connecting the mainland with the island territories (upgrading this fleet is especially urgent), as well as high-speed ships for patrolling.
Another promising area is associated with river vessels - both for cargo and passenger transportation. Andrian Sinebok, the Chairman of the Russian-Vietnamese Business Council, the Chairman of the Board of Directors of the Azov Sea Port, said that Vietnam has been implementing the Inland Waterway Development Program up to 2030. The volume of river traffic should reach 655 million tons of cargo and 200 million passengers by the time. The demand for modern vessels will grow accordingly. In the opinion of Andrian Sinebok, Russia should take advantage of the new opportunities.
Here not only shipbuilding, but also associated services are meant. For example, Nonius Engineering LLC is involved in dredging and other hydraulic engineering works and development of automation tools for underwater and surface construction. The company employs the most up-to-date technologies, including three-dimensional positioning systems with a user-friendly interface, which allow watching what is going on underwater during the works. Experts are ready to apply all the accumulated competencies in the implementation of projects in Vietnam.
One of the major infrastructure projects in the field of maritime transport between Russia and Vietnam may be a logistics corridor between the ports of Azov and Hai Phong, which is developed by the strategic investor Azov Sea Port LLC, including construction of the Vietnamese-Russian industrial park in Hai Phong and Quang Ninh province in northern Vietnam (DEEP C). The port terminal development strategy DEEP C Russia has been developed and adopted at present. The period of implementation is 2023 - 2024. After the dredging operations are completed, vessels of 30 - 50 thousand tons deadweight can be received.
Stanislav Ageenko, the representative of Deep C Industrial Zones, has told about advantages of the Russian industrial park. It is located a few kilometers away from the Lac Nguyen deep-water port, 110 kilometers away from Hanoi and a 3-hour drive to the Chinese border. 3.5 billion people live within a radius of 3,000 km. The park territory is suitable for opening shipbuilding and ship repair companies and launching the production of marine components. Tax preferences and customs privileges are offered for the residents.
Dmitry Stoyanov, the head of the Marine Equipment Localization Center of JSC TsNII Kurs, surveyed the shipbuilding-related largest investment projects, which are under way in Russia, and outlined the prospects for cooperation with Vietnamese colleagues. Currently, the construction of the “Zvezda” shipbuilding complex is nearing completion in the Far East, where about 20 vessels are already under construction, about 50 vessels have been contracted, and the prospect of ordering 120 superships can be seen in the near future. It is a major market for selling marine components and materials.
Dmitry Stoyanov invited the Vietnamese business to participate in localization in the Bolshoy Kamen special economic zone, which is located in close proximity to the “Zvezda” shipbuilding complex. Here all the necessary infrastructure, storage and production facilities in demand among Russian and foreign companies are being created. Now the Primorski Krai Development Corporation is compiling a list of special economic zone participants and a list of equipment for construction of superships at “Zvezda”.
Another Russian program where Vietnamese companies can take part is keel quotas, which are allocated to those who undertake to build a fishing vessel in Russia, consisting of Russian components and materials to at least 40%. About 50 large vessels have been contracted by now.
On the whole, Russia is gradually toughening its localization requirements. A law establishing the rules for shipbuilding localization is expected to be adopted in 2021. “The law describes 75 types of vessels, 10 process operations, 110 types of general ship equipment, 16 marine systems and 126 types of special equipment. A certain number of points, from 5 to 500, is assigned to each item, depending on its weight in the total cost of the vessel, - Dmitry Stoyanov explained. - The maximum amount of points is 7500. Before 2023 the localization level should reach about 40% (these are 2300 points), even growing in the future, because Russia is interested in building ships on its own territory”. Direct supplies of finished vessels from abroad will be decreasing. The Marine Equipment Localization Center of JSC TsNII Kurs is ready to render the extensive support for the Vietnamese companies to come in the Russian market. Localization formats can be different - from construction of our own factories to selection of technology partners among Russian companies.
The production and scientific potential of the Shipbuilding & Shiprepair Technology Center (SSTC) was presented by Denis Kuzmin, the First Deputy General Director of the Center. Over 800 vessels have been built under the SSTC projects already. Among other important activities of the Center there are development and production of new-generation marine valves, design of ships made of composite materials, and supply of the special-purpose equipment for factories, including the in-house one. SSTC opened a representative office in Hanoi several years ago, has already completed several large orders in Vietnam and is ready for new projects, including the development of new industry-related companies and upgrading the exiting ones.
The United Shipbuilding Corporation having the extensive experience in cooperation with international counterparties is also interested in participating in joint projects with the Vietnamese partners. Valentin Nakhodkin, the Director of the Marketing and Sales Department of USC JSC, assured that the design bureaus that are part of the state corporation are able to prepare projects of any complexity that will meet all the requirements of Vietnamese customers. “We offer the comprehensive cooperation starting from design and construction of vessels at our facilities and ending with technical support and their on-site commissioning. We are ready to initiate a work group for detailed working-out of the urgent issues”, - he emphasized.
Alexey Volkov, the Commercial Director of Global Marine Trade, presented a model for the distribution of the foreign marine equipment and components to the Russian market. The restrictions imposed by the sanctions forced Russia to reorient from European suppliers to South Korean and Chinese ones, where the quality and prices are quite satisfying. The Vietnamese manufacturers are of great interest, and the company is ready to help Vietnamese enterprises to certify their products on the Russian market.
While the companies of St. Petersburg are promoted on foreign markets by the “St. Petersburg Export Support Center”. Nadezhda Larionova, the Director General of the Center, has told about the measures aimed at supporting small and medium-sized businesses, newcomers and existing exporters who are willing to expand the geography of sales. According to her, regional companies show great interest in cooperation with Vietnam. A business mission to be attended by governmental authorities and business is planned in the autumn of 2021 to discuss the details of international cooperation.
Experts on the Vietnamese side told how they can be useful to the Russian customers and what areas of cooperation with Russia they see. Nguyen Tien Dat, the representative of the Vietnam Shipbuilding Corporation (Shipbuilding industry corporation SBIC), named the construction of the fishing fleet, as well as the transfer of Russian innovative shipbuilding technologies as promising niches.
Vu Tuy Quin, the Deputy Director of the International Cooperation Department of the Vietnam Trade Promotion Agency, noted that the cooperation with Russia plays an important role for Vietnam and it is very important to expand the cooperation not only in the military shipbuilding, but in the commercial as well. For this purpose she suggested active participation in industry-related exhibitions, conferences, including online ones, in order to get a deeper understanding of the promising products of both countries.
There are also great opportunities in the scientific and educational sphere. Professor Kirill Rozhdestvensky, the Director of the International Cooperation Department of the St. Petersburg State Maritime Technical University, emphasized the cooperation between the Russian and Vietnamese universities in training the personnel for the shipbuilding industry. Bachelor's and master's programs accredited by international organizations, as well as postgraduate vocational education, are available for Vietnamese students.
The conference participants exchanged experiences, found areas of shared interests and outlined ways for further cooperation in the field of shipbuilding.
The past event is included in the series of international marine online conferences conducted by NEVA International LLC, the organizer of the NEVA Exhibition and Conference, in cooperation with industry unions and associations and supported by the Ministry of Industry and Trade and the Ministry of Foreign Affairs of the Russian Federation, in November 2020 through May 2021.
Links for the conference video recordings and proceedings are given below:
Conference presentation materials