Can Vietnam Attract the Ship Finance it Needs to Build up its Fleet?

by Bridget Hogan

Vietnam may on the surface look like a poor candidate for attention from the ambitious bank or ship finance institution seeking to expand its international portfolio. True, the need for finance is there as the fleet is made up of older, smaller vessels in need of renewal and trade is expanding, particularly throughout the region and to Japan. In addition, containerisation is nudging forward. While this has been held back by the dire lack of infrastructure, it once again shows that funds will have to be forthcoming to solve these problems. Finally, there are efforts on behalf of the communist state to move the country further towards market socialism.

Yet, all this has not been enough to entice international banks or finance houses into the Vietnamese scene. What are the stumbling blocks as they see them and what are the prospects for the future?

According to one commentator on the scene, despite business practices beset by bureaucracy and outdated laws on mortgages and security, now is the time for the foundations to be laid for future business in the country. Mr. Milton Lawson of the Sinclair Roche & Temperley (SRT) office in Hanoi, comments: “The point that is often quoted about anyone planing to do business here in the future, not just in ship finance, is that you should be making the move now rather than in five to six years time.” He continues: “Relationships here take a long time to build and business is done on the back of relationships, rather than simply the cheapest deal.”

This is only an excerpt of Can Vietnam Attract the Ship Finance it Needs to Build up its Fleet?

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