Infrastructure: Vietnam Inaugurates Japan-funded Int’l Port Complex

Vietnam’s Ministry of Transport and the Japanese International Cooperation Agency (JICA) jointly inaugurated Thi Vai-Cai Mep international port complex in Ba Ria-Vung Tau province’s Tan Thanh district.

The project, with total cost of VND13 trillion ($619 million), the majority of which comes from the JICA, was started in Oct 2008 by the Ministry of Transport’s Project Management Unit 85 (PMU85).

The first of the six bidding packages is building Cai Mep container port capable of receiving 100,000DWT ships and the second one is building Thi Vai port capable of receiving 50,000DWT ships.

Approved in 2004, the project was completed with the participation of some Japan contractors including Toa-Toyo, Penta-Rinkai, Penta-Toyo, IHI-MES and two domestic contractors including Cienco6-Truong Son and Maritime Safety Corp. In addition, Japanese JPC-Nippon Koei was the major supervisor of the project.

The project aims to form a system of consistent deep water seaports, infrastructure facilities and modern logistics services to meet the increasing demand for transportation in the southern region.

The complex will support direct maritime routes from Vietnam to other countries and cut travel time and cost, helping speed up the relocation of ports to HCM City’s suburban areas and ease traffic pressure in the city.

According to the Vietnam Port Association (VPA), Vietnam has 30 ports with 166 harbors and 350 wharfs. The logistics industry has attracted a number of foreign investors.

Toan Viet Limited Company

Vietnam: Vietnam opens its largest and deepest seaport

The Ministry of Transport today opened the Cai Mep Thi Vai International Port in the southern province of Ba Ria Vung Tau, the country's deepest and biggest seaport, which designed to meet the increasing demand of container shipping in the South.

The VND13 trillion (US$619 million) project, funded by ODA loan of JICA and counterpart budget of Vietnam government, will also open direct shipping channels with other domestic and international ports worldwide, cutting the intermediate and transit shipping costs

"The project will also help increase the social economic development of Ba Ria Vung Tau in particular and the southern region in general while save other ports in the South from overload burdens." said Deputy Prime Minister Hoang Trung Hai.

Hai said the port, which marks 40th years of relationship between Vietnam and Japan, will also play as a shipping hub connecting countries in the Mekong region.

He told the port's management board to fully ultilise the ports and operate the ports with safety.

According to transport Vice Minister Nguyen Van Cong, with direct channels and access roads, the ports will play an important role in attracting foreign directo investment (FDI) to the region as well as international maritime forwarders from the USA, Denmark, Singapore, Japan and Hong Kong".

Cong said the project built an international gateway which is capable of Vietnamese exports directly to Europe and North America ports without the need to stop at international transit terminals in the region.

"This shall enhance the the competitiveness of Vietnam exports while consolidating the postion of Vietnam in the world maritime transport" Cong added.

The project, managed by Ministry of Transport's Project Management Unit 85 (PMU85), consists of seven contract packages including four civil work packages, two equipment procurement packages and one supervision consulting service package.

Meanwhile, three most important packages of the project are Cai Mep Container Port, Thi Vai general goods port, bridges and roads connecting from National Highway 51 to the two ports.

The container port package includes two perths with total length of 600m which could accommodate 130,000 DWT vessels, and other facilities which could provide navigational capacity of 700,000 TEUs per year.

Meanwhile, the general cargo port have two perths with the m which total length of 600 cound serve 50,000 tonnes vessels and other port facilities that have loading and unloading capacity of 1.6-2 million tonnes per year.

The bridges and roads package includes 8.5 km road section and four lanes which could allow vehicles to run at the maximum speed of 80 km per hour.

Approved by the government in 2004, the project was completed with the participation of a number of Japan contractors include Toa-Toyo, Penta-Rinkai, Penta-Toyo, IHI-MES and two domestic contractors include Cienco6-Truong Son and Maritime Safety Corporation.

In addition, Japanese JPC-Nippon Koei was the major supervisor of the project.

According to the Vietnam Port Association (VPA), Viet Nam has 30 ports with 166 harbors and 350 wharfs.

Of these, only some that were rendered operational after 2006 are equipped with state-of-the-art loading and unloading facilities. This shortage has reduced loading capacity in Vietnam to only 50 percent compared to advanced ports in other countries in the Asian region.

Vietnamese logistics industry has attracted a number of foreign investors and there are currently close to 1,000 companies that have established in the country.

Meanwhile, Vietnamese companies are only able to supply simple logistic services. About 70 percent of the market share is captured by foreign companies; hence logistic services contribute little to the country's GDP.

The association says that Vietnamese logistic services have not yet fulfilled their potential. More than 90 percent of imported and exported commodities are transported via the sea and it is predicted that around 600 million tonnes of goods will be transported this way by 2015 and around 1,100 million tonnes by 2020.

Total container-handling capacity through ports is as much as 15.2 million twenty-foot equivalent units (TEU) as of 2015, and 29.2 million TEU as of 2020. - VNS

Thai News Service Co. Ltd.

Vietnam opens its largest and deepest seaport

The Ministry of Transport today opened the Cai Mep Thi Vai International Port in the southern province of Ba Ria Vung Tau, the country's deepest and biggest seaport, which designed to meet the increasing demand of container shipping in the South.

The VND13 trillion (US$619 million) project, funded by ODA loan of JICA and counterpart budget of Vietnam government, will also open direct shipping channels with other domestic and international ports worldwide, cutting the intermediate and transit shipping costs

"The project will also help increase the social economic development of Ba Ria Vung Tau in particular and the southern region in general while save other ports in the South from overload burdens." said Deputy Prime Minister Hoang Trung Hai.

Hai said the port, which marks 40th years of relationship between Vietnam and Japan, will also play as a shipping hub connecting countries in the Mekong region.

He told the port's management board to fully ultilise the ports and operate the ports with safety.

According to transport Vice Minister Nguyen Van Cong, with direct channels and access roads, the ports will play an important role in attracting foreign directo investment (FDI) to the region as well as international maritime forwarders from the USA, Denmark, Singapore, Japan and Hong Kong".

Cong said the project built an international gateway which is capable of Vietnamese exports directly to Europe and North America ports without the need to stop at international transit terminals in the region.

"This shall enhance the the competitiveness of Vietnam exports while consolidating the postion of Vietnam in the world maritime transport" Cong added.

The project, managed by Ministry of Transport's Project Management Unit 85 (PMU85), consists of seven contract packages including four civil work packages, two equipment procurement packages and one supervision consulting service package.

Meanwhile, three most important packages of the project are Cai Mep Container Port, Thi Vai general goods port, bridges and roads connecting from National Highway 51 to the two ports.

The container port package includes two perths with total length of 600m which could accommodate 130,000 DWT vessels, and other facilities which could provide navigational capacity of 700,000 TEUs per year.

Meanwhile, the general cargo port have two perths with the m which total length of 600 cound serve 50,000 tonnes vessels and other port facilities that have loading and unloading capacity of 1.6-2 million tonnes per year.

The bridges and roads package includes 8.5 km road section and four lanes which could allow vehicles to run at the maximum speed of 80 km per hour.

Approved by the government in 2004, the project was completed with the participation of a number of Japan contractors include Toa-Toyo, Penta-Rinkai, Penta-Toyo, IHI-MES and two domestic contractors include Cienco6-Truong Son and Maritime Safety Corporation.

In addition, Japanese JPC-Nippon Koei was the major supervisor of the project.

According to the Vietnam Port Association (VPA), Viet Nam has 30 ports with 166 harbors and 350 wharfs.

Of these, only some that were rendered operational after 2006 are equipped with state-of-the-art loading and unloading facilities. This shortage has reduced loading capacity in Vietnam to only 50 percent compared to advanced ports in other countries in the Asian region.

Vietnamese logistics industry has attracted a number of foreign investors and there are currently close to 1,000 companies that have established in the country.

Meanwhile, Vietnamese companies are only able to supply simple logistic services. About 70 percent of the market share is captured by foreign companies; hence logistic services contribute little to the country's GDP.

The association says that Vietnamese logistic services have not yet fulfilled their potential. More than 90 percent of imported and exported commodities are transported via the sea and it is predicted that around 600 million tonnes of goods will be transported this way by 2015 and around 1,100 million tonnes by 2020.

Total container-handling capacity through ports is as much as 15.2 million twenty-foot equivalent units (TEU) as of 2015, and 29.2 million TEU as of 2020. - VNS

South Vietnam Ports

Concerned by increased valuation of the Chinese currency, rising Chinese labor and benefits costs, and eastern China's less favorable tax treatment, companies began looking toward Vietnam for other global sourcing opportunities. With relatively plentiful young labor and plans to build new ports near Hanoi and Ho Chi Minh City, the Vietnamese government was working hard to attract new factories. However, the Vietnamese government was about 20 years behind its Chinese counterparts in export-related infrastructure investment.

By late 2006, production had migrated en masse to Vietnam and the production shift continues to this day. One furniture executive predicted that most of the furniture industry would soon be in Vietnam, but he also noted that Vietnam needed to upgrade its roads and its only deep-water port (Thomas, 2008). Furniture is one of the most space-consuming products and the United States' largest containerized imports by volume (U.S. Census Bureau, 2009). The value of furniture-classified exports from Vietnam to the United States increased 1,405 percent between 2002 and 2007 (U.S. Trade Statistics, 2009). Other industries such as toys and electronics moved into Vietnam between 2006 and 2008. For example, in 2006, Intel announced greater investment in Vietnam than in China over the previous decade (Folkmanis, 2006). The exports that moved via ocean put an enormous strain on the port infrastructure and the inadequate road infrastructure (Conti, 2009). Inflation spiked from an estimated 7.3 percent to over 25 percent by May 2008 (U.S. Department of State, 2008) as the country was impacted by rapid growth.

Cargo sat on the docks waiting for consolidation, and furniture containers congested roads to the various ports and the feeder vessels. To move from the outlying factories to the port, container trucks competed with motorbikes and cars on city streets. The new ports, scheduled for completion in 2009 at Hiep Phuoc and Vung Tau, offered little short-term relief. Trucks moving with the 40-foot "High Cube" containers popular for furniture and other light goods had to take circuitous routes or hire a person to push low-hanging telephone wires above the tall container during transport. Ocean freight companies began to levy new surcharges to consolidate freight and reduce the allowed dwell time for freight awaiting consolidation. Local landlords found that they could charge rates higher than Shanghai, Hong Kong and Los Angeles and receive a two and a half year payback on their warehouse investment (Anonymous, 2009b). Capacity issues caused delays in unloading ships that could cost $5,000--$6,000 U.S. per day. Prices to transport by air versus ship increased costs from around $1,100 U.S. per container to $32,000 U.S. per container (Tam, 2009). The performance impact of these unexpected changes was severe.

The theory of FMR provides a broad framework that suggests organizations be wary of FMR for inputs from adjacent and unrelated industries. However, it does not provide any specifics regarding when such risk may exist, only that it may. The above cases of Vietnam and China offshoring provide initial evidence for the following propositions:

  Proposition 1: Moving a significant quantity of offshore production
  to a new geographic area will create FMR for capacity of supply
  chain services. (2)

  Proposition 2: Firms that anticipate and plan for impending FMR for
  supply chain services from product and nonproduct-market rivals will
  experience better on time performance of goods produced in that
  region than those that only focus on the behavior of product-market
  competitors.

  Proposition 3: Firms that anticipate and plan for impending FMR for
  supply chain services from product and nonproduct-market rivals will
  experience better cost performance on goods produced in that region
  than those that only focus on the behavior of product-market
  competitors.

Shifting market conditions create these situations, and impair the organization's ability to achieve its sustainable competitive advantage. Although the first proposition may seem obvious, rivalry and its negative impact are commonplace in global markets; the rivalry for supply chain services often seems to be unanticipated, creating disruptive effects. When rivals in the same or different industries are using similar resources, effectively managing those resources becomes even more critical to a firm's competitive advantage (Sirmon et al., 2008). Perhaps more importantly, propositions 2 and 3 suggest that although such shortages may be inevitable, the ability to effectively cope with them by managing supply chain assets more effectively than others creates an opportunity to increase competitiveness.

The potential for logistics and other supply chain capacity problems should be obvious; however, the movement of manufacturing from China to Vietnam reveals that they are not. As Markman et al. (2009) point out, competitive blind spots evolve. Even when there is no product rivalry, mobile and versatile resources such as many types of unskilled and entry-level labor and transportation capacity, can cause new and unexpected firms to compete in factor-markets. Domestic examples presented in the following section further support that supply chain services are subject to FMR.
---Journal of Supply Chain Management Jan-2013

Haiti welcomes 2013 with Bold Strategic Alliance with Vietnam

PORT-AU-PRINCE, Haiti, Jan. 2, 2013 /PRNewswire/ -- The governments of Haiti and Vietnam are demonstrating that South-South cooperation can lead to the fruitful exchange of resources, technology and knowledge. A series of significant agreements signed in late December 2012 provide the framework for a novel form of long term cooperation that will allow Haiti to address food security, one of its key challenges.

The government of Haiti hopes that these agreements will enable Haiti to leapfrog development stages as it attempts to create a resilient agricultural production system. As 2013 rolled in, these agreements were already translating into concrete positive benefits including lower prices for rice, Haiti's key staple food.

According to Haitian Prime Minister Laurent Lamothe, "The principal goal of the agreements we have signed with Vietnam is to find innovative ways to insure food security for all of our citizens." Lamothe's strategic plan identifies ways to mitigate the impact of natural disasters on Haiti's food supply and to reduce its reliance on the import of agricultural products such as rice. The Haitian government's goal is to achieve self-sufficiency in the production of food.

The Vietnamese experience is particularly relevant to Haiti which imports most of the rice its citizens consume. In the past thirty years this small Southeast Asian country has gone from facing periodic food shortages in the aftermath of the war with the United State and being a net importer of rice, to becoming the world's second largest exporter of rice.

Improvements came by increasing land under cultivation, relying on technology to improve seeds and mountain rice production techniques, and by depending on smallholders rather than on large farming estates. In 2011 Vietnam produced 40 million tons of rice a year, most of it grown on 7.2 million hectares by some 10 million farming households each cultivating between one half to one hectare.

Vietnam will provide Haiti with technical cooperation to address the production of rice and other agricultural products. It will send experts to help introduce a progressive system of mountain rice production that includes the mechanization of agriculture, soil erosion prevention techniques, and the introduction of drought resistance rice varieties.

The agreements include a few immediate benefits for Haiti. Vietnam will supply Haiti with 300,000 tons of rice annually, which will address periodic food shortages. As part of the new relationship with Vietnam's Vietell, the state owned mobile network company donated 400 tons of rice. As a result, Haitians are welcoming 2013 with the price of rice 33 percent lower than last year.