Source: World Dredging Mining & Construction
First American Sale of Capital Equipment to Vietnam Since Embargo
Ellicott® International of Baltimore, MD signed a contract to sell two "Super-Dragon®" dredges and spare parts to the state-owned dredging company of Vietnam — VINAWACO. According to the U.S. State Department, the contract, valued at nearly $12 million, may be the first major export of capital equipment to Vietnam by any American company since President Clinton lifted the embargo in February 1994. The definitive contracts were approved in Hanoi in March 1995, and the financing arrangements were finalized by all parties concerned in June.
Ellicott® President Peter Bowe credited advocacy efforts by three separate agencies of the Clinton Administration as the key to Ellicott®’s success. The Departments of State, Transportation and Commerce, coordinated by the Commerce Department’s "Advocacy Center," got involved to support Ellicott®’s bid. Members of all three agencies attended the announcement in a ceremony in June at Ellicott®’s Baltimore plant, along with Ambassador Le Van Bang of the Vietnamese laision office, the Vietnamese State Planning Committee, and senior officials from VINAWACO.
The two dredges will measure 114 feet (335 meters) in length and weigh over 450 tons (each). The new "Super-Dragons®" will be used for harbor development in Hai Phong and Mekong River Delta near Ho Chi Minh City.
Ellicott®’s successful negotiation efforts enabled the company to win the contract over a European competitor, which was said to be backed not only by ministerial-level advocacy, but also with a government-supported export financing offer.
For Ellicott®, the lifting of the embargo came at exactly the right time. The company had sold 12 dredges to Vietnam in the 1950s and 60s. In a testimony to the dredges’ quality and Vietnamese ingenuity, five are still operating today, despite decades of war and Vietnam’s inaccessibility to spare parts and service.
The Vietnamese were impressed with the obvious quality and durability of their 30- and 40-year-old Ellicott® equipment. With a thaw in American/Vietnamese relations, the Vietnam government contacted Ellicott® in 1993 about servicing their dredges, and a dialogue and series of visits ensured.
Le Van Bang praised Ellicott® for its persistence and creativity in helping to make the deal happen. He noted that Ellicott®’s "world-wide leading advanced technologies" will help VINAWACO fulfill its dredging backlog based on an annual project value worth hundreds of millions of dollars.
Nguyen Ngoc Nhat, general director, Department of Transport and Communication of the State Planning Committee, said at the announcement ceremony that, "there is no doubt about the need to rehabilitate and modernize the port sector," which is estimated to cost $1.6 billion by the year 2000. The rapid growth of the Vietnamese economy has placed a tremendous burden on its transportation infrastructure, especially its ports. The Vietnamese have so far relied primarily on the Japanese, the Asian Development Bank and World Bank to finance its infrastructure investment.
Ellicott®’s representative Ly Thanh The, executive vice president of Trading & Development International, and Ellicott®'s International Sales Manager, negotiated the contract with the Vietnamese beginning in January 1994. The two made a total of five trips to Vietnam and spent nearly four months in Hanoi negotiating the sales contract and financing agreement.
When commissioned, the new dredges will be among the most modern and powerful of their size anywhere in the world. With over 4,000 installed horsepower each, they will be able to deepen Vietnam’s harbors down to 18 meters, and move up to 2,500 cubic meters of material per hour. Vietnam’s harbors in many cases are constrained by 10-meter-deep channels, which means large ships can’t serve the ports at all.