Doing Business

Vietnam’s marine economy: An Overview (Part Two)

Trường Lăng

June 3, 2022

Doing Business

Vietnam’s marine economy: An Overview (Part Two)

Trường Lăng

June 3, 2022

Marine economy: Potential trending sectors for the development

Offshore Wind Power

Offshore wind energy, also known as offshore wind power, is an industry with a lot of potential for creating a clean energy source in the context of the global fight against climate change. According to the World Bank (WB), offshore wind power has the potential to provide 12% of Vietnam’s electricity by 2035. If the above-mentioned power output can be developed to gradually replace coal power, it can help Vietnam reduce emissions by more than 200 million tons of CO2.

Mr. Mark Hutchinson, Chairman of the Global Wind Energy Council’s (GWEC) South East Asia Task Force, confirmed that Vietnam can fully develop the offshore wind power market by 2030, with a capacity of 5-10GW, generating a total added value of more than $60 billion USD for the economy.

“In addition, power plants that use fossil fuels typically have a lifespan of 25-30 years. By 2050, nearly all fossil fuel power plants in Vietnam must be replaced. So why don’t we replace it with renewable energy?”, asked Mr. Hutchinson.

According to the recently released National State of Sea and Island Environment Report for the period 2016-2020, Vietnam has a total technical potential for offshore wind power of around 160GW, with some localities having particularly high wind power potential, such as Quang Ninh with 11GW, Ha Tinh with 4.4GW, Ninh Thuan with 25GW, Binh Thuan with 42GW, and Tra Vinh with 20GW. The report also states that Vietnam’s coastal waters, particularly those in the south (where the depth is 30-60 meters), have a lot of potential for developing offshore wind power.

With all the potential, the offshore wind market in Vietnam has begun to receive attention and investment. The Ministry of Industry and Trade has received offers for offshore wind power projects with a capacity of up to 129,000MW. The Ministry is finalizing the draft National Power Development Planning Scheme for the years 2021-2030, with a vision to 2045 (Electricity Planning VIII), which calls for the development of 5,000MW of offshore wind by 2030 and 40,000MW by 2045.

Maritime Industry

Vietnam benefits from a long coastline that borders the Gulf of Thailand, the South China Sea, and the Gulf of Tonkin. The country has the second-highest number of international ports in ASEAN after the Philippines. With its geographical position as a country in the Indo-Pacific region, Vietnam also has favorable conditions to cooperate with countries with maritime advantages such as Japan, India, Korea, and China.

Having one of the highest liner shipping connectivity indexes in Asia, Vietnam has become internationally recognized as a regional maritime trade hub. Given its location advantage and potential for shipbuilding, the Vietnamese maritime industry has been relatively attractive for foreign investments.

The maritime industry’s development potential is quite large because the demand for sea transportation grows strongly in tandem with the economy’s growth and demand, as well as the development of e-commerce. Moreover, with an average annual export growth rate of 12%, there will definitely be a greater demand for investment in the maritime industry.

According to the master plan on the development of Vietnam’s seaport system to 2020, with a vision to 2030, the Government of Vietnam is promoting the participation of foreign investors in the development of seaports, and encouraging businesses to invest in the maritime industry. This, along with the geographic characteristics of Vietnam, has created the perfect conditions for investments to take place and bear fruit for the owners.

Seafood Processing

The growth of processed seafood output in Vietnam will reach over 6 percent a year by 2030 under a national seafood processing development strategy for 2021-2030 that has been approved by the Prime Minister.

The strategy aims to transform Vietnam into a seafood processing center, allowing it to join the world’s top five seafood processing countries by 2030. It also strives to build a modern, efficient, and sustainable seafood processing industry that meets the needs of consumer markets while improving competitiveness and integrating deeply into the global value chain.

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Sea food processing in Vietnam sea coast (Source: Nhan Dan Newspaper)

Under the strategy, value-added processed products will account for over 40 percent of total export value of seafood. At least 70 percent of seafood processing establishments will have production technology from medium to advanced levels.

However, Vietnamese seafood processing enterprises are now confronted with increasingly stringent technical barriers in terms of food safety and hygiene, traceability, and factors influencing sustainable development. Furthermore, domestic seafood processing focuses primarily on food processing, while the potential for development in medicine, pharmaceuticals, and a variety of other fields has not been fully realized. 

The incorporation of new technologies and modern processing techniques into the manufacturing process to increase product value and diversify products from various raw material sources is not a reversible trend. This process not only helps to reduce production costs and environmental costs, but it also improves production efficiency, increases competitiveness for seafood products, and increases profits for enterprises from raw materials of low value. From there, the aquaculture industry in Vietnam can be further developed while the country further enhances the reputation of the country’s seafood industry in the international arena.

The world’s seafood consumption trends are changing both in terms of origin, product categories and characteristics. Convenience, assurance of health, sustainability, and traceability are key trends shaping consumer preferences worldwide. This requires Vietnam’s aquaculture and seafood processing industry and foreign investors to have flexibility in finding markets and diversifying products, as well as effective marketing strategies for sustainable development.

Conclusion

The blue economy, along with innovation and technology, is and will continue to be the world’s development trend in the future, particularly for maritime nations like Vietnam. Now is the golden opportunity for business owners to start investing in various sectors of Vietnam’s emerging marine economy. 

If you are unaccustomed to Vietnam’s complex laws and regulation, let Viettonkin be at your service. With a team of highly trained and experienced experts, Viettonkin is proud to be among the best consulting firms in Vietnam that can answer your every need. Don’t let your lack of knowledge and experience stop you from establishing a successful business in the marine economy of Vietnam. Call us now for more!

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