Boston, MA -- (ReleaseWire) -- 07/28/2012 -- Softer domestic demand has been primarily blamed for the fact that Vietnam's real GDP growth rate slowed to 4.0% year-on-year (y-o-y) in Q112, down from 6.1% in the previous quarter and marking the worst quarterly outturn since the height of the global recession in Q109. This is due to tighter money and credit conditions, which are beginning to take their toll on consumer and business activity. However, the port of Ho Chi Minh is set to enjoy healthy growth over the mid term in terms of tonnage throughput, while the Port of Da Nang will record relatively impressive box throughput.
Over the past decade, Vietnam has made its name as the 'factory of Asia' - a reputation based on its booming exports, which have buoyed the shipping sector as a result. Exports are, however, set to be adversely affected by the predicted hard landing in China this year, as well as a weak eurozone. A bleak macroeconomic picture means that Vietnam's main export partners - the US, China and Japan - are all set to suffer slowdowns during 2012, which may also detrimentally affect the country.
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Headline Industry Data
- 2012 tonnage throughput at the Port of Ho Chi Minh City is forecast to grow 7.96% to 36.11mn tonnes.
- 2012 tonnage throughput at the Port of Da Nang is forecast to increase 3.08% to 3.50mn tonnes.
- 2012 container throughput at the Port of Ho Chi Minh City is forecast to grow 4.78% to 3.12mn twenty-foot equivalent units (TEUs).
- 2012 container throughput at the Port of Da Nang is forecast to increase 7.60% to 102.78mn TEUs.
Key Industry Trends
Cai Mep-Thi Vai Ports Underused, Despite US$7bn Investment
Ports in the Cai Mep-Thi Vai region of the Vietnamese province of Ba Ria-Vung Tau have been struggling to attract vessels. According to the Vietnam Port Association (VPA), the ports have a total container handling capacity of as much as 8mn twenty-foot equivalent units (TEUs); however, the actual demand only comes to around 5mn TEUs. This is despite a total investment of over US$7bn by the end of 2011.
China Issues South China Sea Warning
The Chinese government issued a warning to foreign shipping companies operating in the South China Sea in April 2012. Tensions rose following an incident which saw the Philippine navy frigate Gregorio del Pilar involved in a stand-off with two Chinese surveillance vessels after it had intercepted Chinese fishing vessels traversing the region.
Container Rate Rises Impact Vietnam's Clothing Exporters
Vietnamese exporters of garments and textiles have reportedly been hit by container rate rises being implemented by major sea carriers. In March 2012, Germany-based Hapag-Lloyd raised its rates from Vietnam to the US by US$600, while Hong Kong-based operator OOCL raised its rates to Europe by the same amount. Others, including Danish sea carrier Maersk Line, have raised rates by up to US$1,000.
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