Seaport industry’s growth rate twice as much as global rate
The high number of imports of input materials and exports of finished products by foreign invested enterprises (FIEs) has led to an increased growth rate for the seafood industry.
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Fred Burke from Baker & McKenzie Law Firm in Vietnam said the country is a model for international trade as it started in 1990 with no transactions to become one of the world’s leading exporters in garments and footwear, rice, coffee, spices, wooden furniture, and electronics and software.
The global economic integration has brought business opportunities to all fields in the value chain, from production and business to distribution and trade. The seaport and transportation sector depends heavily on import/exports.
According to FPT Securities, Vietnam’s total volume of goods going through ports has been rising rapidly as exports have increased since 2007, when Vietnam joined WTO.
Vietnam export’s CAGR reached 17.5% per annum in 2000-2016. The GSO’s (General Statistics Office) report showed an increasingly high proportion of export value in GDP, from 50% in 2000 to 70.5% in 2007, and 89.8% in 2016.
The volume of container goods going through ports in Vietnam saw CAGR of 11.8% in 2010-2015, higher than the 5.1% level globally. This is attributed to FIEs’ high imports of input materials and exports of finished products.
According to GDC, FIE export turnover amounts to 60-70% of Vietnam’s total import/export turnover. In 2016, enterprises exported US$69 billion worth of products, while the import turnover was US$60.6 billion.
A report from the Vietnam Seaport Association showed that the volume of container goods going through the ports throughout the country in 2015 was 11,222 thousands of TEU, which meant an increase of 12.2% over the year before and CAGR of 17.3% in 2000-2015.
FPT Securities believes that the gap in the growth rates by the ports would be wider in the future. The ports in HCMC (Cat Lai, Sai Gon and Hiep Phuoc) will have few more opportunities for development, while the deep-water Cai Mep – Thi Vai complex will benefit thanks to the increase in ship size.
The ports in Da Nang will also benefit from FDI flow to Vietnam. However, after 2018, the service fee competition in the area will worsen once Tien Sa Port (second phase) becomes operational, thus increasing supply. Meanwhile, the deep-water Lien Chieu Port is scheduled to be put into operation by 2023.
The ports in Hai Phong City area are used expected to thrive thanks to the strategic position (it is near Northeast Asian countries) and improved infrastructure.
