Defence and security to Vietnam
Trends and opportunities
Moving into 2017 Vietnam is looking to develop defence cooperation with a
number of new partners. Most notable among these are India and the United
States. Cooperation with these countries points to a wider strategy to
modernise forces for UN peacekeeping, contributing to regional security and
humanitarian disaster relief. In recent years, Vietnamese Ministry of
Defence announced major reorganisation of the military, with the formation
of a new Vietnam Coast Guard (VCG) set to replace the Vietnam marine
In 2016, the United States lifted their ban on arms sales to Vietnam and is
providing material assistance in this reorganisation. Procurement
priorities include the acquisition of anti-submarine warfare and maritime
surveillance capabilities that can deter potential aggression in the South
China Sea. A growing priority is anti-shipping defence systems,
particularly medium range portable missile systems supported by situational
awareness radar systems.
Developing domestic defence industries was made a priority in Vietnam's
revised constitution. However, as things stand, Vietnam's domestic defence
industry is very limited. In order to boost its defence industry, Vietnam
is looking to collaborate with international partners. Such collaboration
may lead to the transfer of technology and know-how necessary for the
development of a domestic defence industry.
The Vietnamese government has growing confidence in the local shipbuilding
sector, as it followed up these successes with further orders in October
2012 for another patrol craft and a missile corvette. Local industry is
exploring opportunities to produce larger and more sophisticated platforms.
Shipyard 189 working with DAMEN has produced high quality mid-sized vessels
for Australia. On the other hand, two submarine rescue ships and a recently
launched Aviation Training Vessel are excellent examples of Vietnam’s
capability of producing complicated platforms.
Australia has highlighted strengthened defence ties with Vietnam and other
nations in Southeast Asia as a priority. In Canberra's 2016 Defence White
Paper, it said Australia would help build the capacity of regional
countries to respond effectively to security challenges through activities
including exercises and training. In terms of potential exports to Vietnam,
Australia would regard maritime security as a potential area of
collaboration given its industrial capabilities and Hanoi's extensive
requirements in this area.
With Vietnam's recent economic growth, Vietnam is looking to acquire new
armoured personnel carriers, battle tanks, artillery, fighters,
helicopters, transport, surface assets and anti-missile systems. Given that
Vietnam relies on Soviet era defence platforms, Russia remains a key
defence ally, particularly when it comes to providing maintenance, repair
and training services. As part of the 'Comprehensive Strategic Partnership'
agreed with Russia in August 2013, the provision is to set up a range of
joint ventures that will enable Vietnam to repair and maintain its own
In October 2011, the Vietnamese Government announced that it was acquiring
four SIGMA class corvettes from the Netherlands. The deal represents
Vietnam's first major procurement from Europe, and the assembly of two of
the ships in Vietnam will deliver important technical know-how to the local
ship-building industry. When the eight new corvettes are all in service
they will greatly enhance Vietnam's ability to patrol its territorial
waters. Australian companies may be able to identify and contest for
downstream opportunities in the value chain.
To complement its foreign maritime procurement, Vietnam's domestic defence
industry has made some important strides in recent years. In January 2011,
Hong Ha, a local shipbuilder, launched the country's first ever
domestically produced warship. The ship was reported to be based on the
Russian Molniya-class patrol boat design, and is expected to be the first
of 12 that Vietnam produces domestically under licence. The patrol boats
are armed with artillery and anti-ship missiles.
In an effort to upskill and modernise its forces, Vietnam will require
various training from international experts ranging from English language
to specialist training.
Marketing your products and services
Australian businesses preparing to enter the market must plan strategically
and be persistent and consistent with face-to-face follow-ups. It can take
up to one or two years to make a successful sale.
To enter or expand in Vietnam, depending on the nature of the business,
Australian companies may directly deal with government departments or
indirectly through the appointment of an agent or distributor. In order to
be successful, Australian suppliers are highly encouraged to visit the
market and spend time assessing market needs, sales potential and possible
distributors for their products. It is important to conduct a detailed
analysis of the market prior to entry.
Firms seeking a direct presence in Vietnam can do so by establishing a
representative office, branch or foreign investment project.
Product demonstration and educational seminars on the latest technology,
services and products in line with market demand can be a positive way to
build brand recognition among potential end-users. An appropriate
agent/distributor can assist in contacting developers, potential
buyers/users, provide after sales service as well as organising product
demonstrations. Providing technical support to your local partner will also
signal your commitment to the market.
Links and Industry Contacts
Vietnam Ministry of National Defence
People’s Army Newspaper
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Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.
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