Sustainable Development Opportunities for Vietnam’s Shipbuilding Industry

Vietnam’s shipbuilding industry, a strategic pillar for a coastal nation, is facing both significant challenges and promising opportunities for sustainable development. As urbanization continues to shrink production space at facilities like Bach Dang Shipbuilding Company, the need for long-term planning and structural transformation becomes increasingly urgent.

A Strategic Industry Under Pressure

Shipbuilding plays a critical role not only in economic growth but also in national defense and maritime security. In recent years, despite financial constraints and structural difficulties, the industry has maintained steady growth and reinforced its position in the global market.

Enterprises under the Vietnam Shipbuilding Industry Corporation (SBIC) are currently tasked with a “dual mission”: sustaining business operations while implementing restructuring measures under Resolution No. 220/NQ-CP issued in December 2023. The goal is to revive the sector and establish large-scale shipbuilding and repair hubs.

Maximizing Orders Amid Constraints

In December 2025, a major milestone was achieved when Nam Trieu Shipbuilding successfully launched the 65,000 DWT cargo vessel Truong Minh 02. This is the second ship in a series of four — the largest vessels ever built by Vietnamese shipbuilders to date.

The vessel was designed by a joint venture between Vietnam Shipbuilding Engineering Joint Stock Company (VISEC) and Bluetech (Finland), and constructed under international supervision standards. Equipped with modern technology, the ship meets the latest global maritime conventions and environmental requirements, enabling operation across international waters.

This achievement highlights Vietnam’s growing technical and managerial capabilities in shipbuilding. However, financial constraints remain a major barrier. Companies such as Nam Trieu are classified under bad debt groups, limiting their ability to secure guarantees for large-scale contracts or participate in turnkey projects.

Underutilized Capacity and Resource Gaps

Vietnam has previously developed a relatively complete system of shipbuilding and repair yards across the country, with a total capacity of approximately 3.5 million DWT per year. However, over the past five years, actual output has fallen below 50% of capacity due to outdated equipment and insufficient investment in technological upgrades.

At Pha Rung Shipbuilding Company, production in 2025 exceeded targets, yet the company still had to decline orders due to labor shortages and outdated machinery. This reflects a broader industry issue: strong demand exists, but supply-side limitations hinder growth.

Post-Restructuring Challenges

Looking ahead, Vietnam aims to expand its merchant fleet to around 1,200 vessels with a total capacity of 13–14 million DWT by 2030. The global shift of shipbuilding toward Asia presents a major opportunity for Vietnam to boost exports and support its maritime economic strategy.

However, restructuring challenges persist. SBIC has initiated bankruptcy procedures under court supervision while continuing operations — a complex process that affects access to financing, contract guarantees, and investor confidence.

Similarly, Bach Dang Shipbuilding Company faces financial legacy issues that limit its ability to secure large contracts or commit to project timelines. Most industry leaders agree that resolving historical financial burdens, preserving infrastructure, and retaining skilled labor are critical to successful restructuring.

Pathways to Sustainable Growth

To unlock sustainable development, several key solutions have been identified:

• Transparent restructuring mechanisms to attract capable investors with financial strength and industry expertise.
• Retention of core shipbuilding functions, ensuring continuity in both ship construction and repair.
• Technology upgrades and workforce development to improve productivity and competitiveness.
• Integrated asset transfers, allowing new investors to acquire facilities, land use rights, and ongoing contracts.

Government leadership is also emphasizing the importance of building a strong core management and technical team to guide the industry into a new phase of development.

Conclusion

Vietnam’s shipbuilding industry stands at a critical turning point. While financial and structural challenges remain, the combination of strategic reforms, global market shifts, and growing domestic capabilities offers a clear path forward. With the right policies and investments, Vietnam can transform its shipbuilding sector into a sustainable and competitive force in the global maritime industry.