[Exclusive] HD Hyundai to Develop Vietnamese Shipyard as 'China's Competitor' in Merchant Ships.. Expected to Succeed with Added U.S. Regulations on China

【Hanoi(Vietnam)=Kim Jun-seok Reporter】HD Hyundai Mipo Dockyard is reportedly working on transforming its shipyard in central and southern Vietnam into a production base for general merchant ships to develop it as a competitor to Chinese shipbuilding. This shipyard is currently focused on building bulk carriers and tankers but plans to transition into a construction base centered on general commercial ships, where China holds a dominant market share, as a strategy to cope with the upcoming 'order drought' after the supercycle. 
On the 29th, according to local sources in Vietnam and the shipbuilding industry, HD Hyundai Mipo Dockyard recently concluded relevant negotiations, including extending the land lease with the authorities of Khanh Hoa Province, where the Vietnamese shipyard is located. HD Hyundai Mipo Dockyard is expected to improve its structure by focusing on general merchant ships instead of the currently under-construction bulk carriers and tankers in Khanh Hoa Province.
HD Hyundai Mipo Dockyard's recent move is significant as it is being pursued at a time when the U.S.-China hegemony competition is intensifying, and the maritime hegemony competition is spreading, providing an opportunity to surpass Chinese shipbuilding, which is pushing for a volume offensive with merchant ships. Earlier, the U.S. government, based on the results of the 'Section 301' investigation into Chinese shipbuilding and shipping industries last February, imposed sanctions by charging port fees on ships built by Chinese shipyards and owned by Chinese shipping companies, tightening the noose on Chinese shipbuilding.
Since the 2000s, Chinese shipbuilding has accelerated its 'shipbuilding rise' with the government and companies working as one. As a result, the carrying capacity of merchant ships owned by China is already the world's largest, four times that of Korea. 
According to the Korea Institute for Industrial Economics & Trade, last year, the comprehensive competitiveness of Chinese shipbuilding was 90.6, while Korea's was 88.9. Although Korea maintained an edge in research and development (R&D) and design, China was found to be ahead in production, demand, and service. By ship type, China has surpassed Korea in container ships, tankers, and bulk carriers. 
In particular, in general merchant ships, which do not require high technology, Chinese companies are inducing bleeding competition with low-cost volume offensives, leaving competitors behind. As a result, Sumitomo Heavy Industries, a symbolic company in the Japanese shipbuilding industry, withdrew from the new merchant ship sector last year, leaving only K-shipbuilding. Currently, the global shipbuilding market share is 70.6% for China, 16.7% for Korea, and 4.9% for Japan.
Currently, HD Hyundai Vietnam Shipbuilding (HVS), a subsidiary of HD Hyundai Mipo Dockyard in Vietnam, started as a repair and modification corporation in 1996 and entered the new shipbuilding business in the late 2000s, having received orders for over 200 ships to date. It plans to increase its production capacity from the previous 12-13 ships per year to 23 ships by 2030 through expanding production facilities and improving processes. To this end, it recently invested an additional $100 million (about 140.2 billion won) earlier this month. Furthermore, if the restructuring around general merchant ships continues, HD Hyundai Mipo Dockyard's merchant shipbuilding capacity will significantly increase.
An industry official said, "For HD Hyundai Mipo Dockyard, the Vietnamese shipyard, which has a rich pool of manpower, is ideal for building general merchant ships instead of domestic shipyards, where it is difficult to secure production manpower," adding, "HD Hyundai Mipo Dockyard is expected to receive full support as it is trusted by local authorities and the industry to the extent that it is called 'Samsung of Khanh Hoa Province.'"
Meanwhile, recently, some global shipping companies, which had considered placing orders for container ships with Chinese shipbuilders, are sensing a change in atmosphere as they are pushing for orders with Korean companies instead, following the intensification of U.S. checks on China.rejune1112@fnnews.com Kim Jun-seok Reporter