Joining Vietnam’s construction boom

This Issue This is a part of the Building and the economy feature

By - , Build 125

A recent trade mission to Vietnam’s southern coastal city of Danang revealed plenty of opportunities for Kiwi hardware suppliers and building certifiers to cash in on the construction boom.

Resort in Danang, Vietnam.

Danang is the epitome of the Vietnamese economic revival story. Its growth, running at over 12% a year (twice the national average), is being driven by the construction of beachside resort facilities and associated infrastructure.

This city of 1 million is currently targeting tourism, with visitors up 39% last year. Many of them expect western resort standards and foods much of the time. Business visitors from China, Taiwan, Russia, Korea and Japan are keen to invest in property developments with internationally accredited construction standards.

However, Danang is looking beyond tourism and for jobs en masse for its youthful population. There are plans for high-tech industrial parks and skills training, along with the subsidies and incentives needed to fill them. A highly skilled, highly paid future seems inevitable here.

Vietnamese building code similar

To find out what role New Zealand building standards, hardware suppliers and building certifiers might play in this boom, Export New Zealand and the Combined ASEAN New Zealand Business Council took a small trade mission to Danang in March. The group wanted to learn how New Zealand building products could satisfy Vietnamese standards and identify which authorities had jurisdiction over building codes.

The results were positive, particularly from a regulatory perspective. The Vietnamese building code was established under an Australian aid technical assistance programme in 1997 when the Vietnamese building standards association was also set up. Being based on the Australian code, it is similar to ours.

Resort in Danang, Vietnam.

Valuable contacts established

The trade mission developed networks and established some valuable contacts, a key player being the Ministry of Construction in Hanoi. The Ministry’s international cooperation division helps set codes and standards, undertakes materials testing and ratifies local standards by engaging with countries such as New Zealand.

BRANZ research executive Chris Kane said the Ministry found New Zealand standards acceptable, with BRANZ taking the role of envoy for developing them further. ‘The Ministry’s international cooperation people were practical and helpful. They advised if we made up samples, they would help us make them available locally. That was a win-win for everybody.’

The Vietnam Glass Association was another contact that genuinely wanted to help. They said any standard can be used, provided it is equal to or better than Vietnam’s own.

Architect Ken Stanton, a partner with Auckland architectural practice Stephenson Turner, came back with good contacts and a positive view of the country. Although he appreciated the level of contact with Ministry of Construction officials in Hanoi, he suggested that the Architects Association was a strong body that New Zealand needed to cultivate.

Mike Petersen, Business Manager for window and door manufacturer National Aluminium Ltd (NALCO), expects to return. He found the mission was an extremely cost-effective way of getting started in a new market.

In other outcomes, early talks are under way on the viability of opening a representative office in Vietnam on behalf of New Zealand construction businesses. NALCO has also been invited to participate in a US$1 billion resort development project in Danang.

Kiwis not new in Vietnam

New Zealand’s involvement with construction in Vietnam is not new. Fletcher Aluminium has been in the market since 1996 supplying window extrusions and related hardware, particularly for high-rise developments. Chris Kane commented, ‘Fletchers blazed the trail for New Zealand building products in Vietnam, and it’s impossible to undo their good work.’ As a result, there are many opportunities for New Zealand firms to work alongside the Vietnamese.

For more

Gilbert Petersen co-managed the trade mission to Vietnam.

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Resort in Danang, Vietnam.

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