Vietnam Environmental Technologies Export Market Plan

or larger-capacity wastewater treatment plants will
increase.
Industrial Zones/Export Processing Zones
Industrial zones and export processing zones represent
an attractive market for wastewater treatment plants. Of
the 60 industrial zones, parks, and export processing
zones operating in Vietnam, only six have installed central
wastewater treatment plants.
The reason there are so few installed plants is that
many are operated by Vietnamese companies that are able
to sidestep environmental regulations or that are unable
to finance treatment plants. In addition, current market
conditions for industrial parks and zones are abysmal.
The lack of tenants led one official from the Dong Nai
Department of Planning and Investment to remark,
“Local industrial zones are suffering from remarkable
emptiness.” As a result, few new parks will be built in
the near future.
The country’s most successful export processing zone
(EPZ), the foreign-invested Tan Thuan export processing
zone, completed construction of a 10,000 m 3 per day
wastewater treatment facility in 1999. In the same year,
the Linh Trung EPZ completed construction of its
wastewater treatment plant with a capacity of 6,000 m 3
per day.
The best opportunities in industrial zones/parks and
EPZs in the near future are for individual tenants whose
waste requires a separate treatment facility. According
to anecdotal reports from Vietnamese suppliers of
wastewater treatment equipment, business has been most
active at industrial zones/EPZs in Ho Chi Minh City and
surrounding provinces of Dong Nai and Binh Duong.
Local Companies
To date, Vietnamese state-owned companies have not
been realistic sales prospects, except in cases where they
receive overseas development assistance to finance a
project. According to local companies, such as the Ho
Chi Minh City Center for Environmental Technology
(ECO), the market for supplying equipment to Vietnamese
companies is small but improving. Its business
has gradually shifted from servicing foreign-owned
companies and joint ventures to local companies. The
company director estimates that in 1997, 65 percent of
his business was generated by foireign invested
enterprises (FIEs) or joint ventures (JVs). By 2000, about
half his business was with local companies and half with
foreign-invested firms.
Case Study 6.1—To Win a Tender, It Pays to
Hire Well
Belgian firm Seghers International recently completed construction
of a waste treatment plant at the Bien Hoa II industrial zone
in Dong Nai province, outside Ho Chi Minh City. This was a
unique contract, because Bien Hoa II is Vietnamese-owned, and
it paid for the waste treatment facility from its own financing, not
from ODA. Bien Hoa II is flush with cash because it is the most
successful Vietnamese-owned industrial park in Vietnam, enjoying
95 percent occupancy.
Because of Bien Hoa’s unusual financial situation, bidding for
the project was extremely competitive. A good product, good
relations with relevant ministries, and establishing a good working
relationship with a critical government company won the Bien Hoa
II contract for Seghers.
To win the project, no fewer than five agencies had to approve
Seghers’ technology and bid: the Ministry of Construction,
Ministry of Finance, Ministry of Planning and Investment,
MOSTE, and SONADEZI, a state-owned company that operates
three of the largest industrial parks in Vietnam, including Bien Hoa
II.
To navigate this bureaucracy, Seghers had a key advantage.
Four years earlier, when Seghers’ executives were on a fact-finding
mission to Vietnam, their delegation was hosted by MOSTE
officials. They were so impressed with one of these officials that
they later hired him and eventually financed a two-year study trip
for him to Belgium. This former MOSTE official not only knew
the channels within the environment ministry, but also, through
his own experience and through family friends, had connections
with many other decision-making ministries.
Helping seal the Bien Hoa contract was Seghers’ ability to sign
favorable terms with VIWASE, the local company partnering on
the project. VIWASE (Vietnam Consultancy for Water Supply,
Sanitation, and Environment) is the most powerful local company
in water infrastructure projects, and nearly all foreign companies
attempt to establish partnerships with the firm when bidding on
water-related projects. (“They’re the only game in town,” says an
executive at one foreign infrastructure company.)
According to one Seghers’ representative, the Belgian firm’s
approach was to be more flexible in negotiating revenue-sharing
terms instead of looking for legal guarantees at all points in the
contract. It was better to “think of each other” when doing the
deal, rather than seek legal exit strategies, because often in
Vietnam “going to court is a waste of time,” the executive said.
Seghers also brought a world-class product to the table.
Seghers’ two-hectare plant includes four reservoirs for biological,
chemical, and physical treatment of liquid waste before it is
conveyed to another reservoir for final treatment. The $3.8 million
facility has a daily capacity of 4,000 cubic meters although it can
be expanded to 12,000 m 3 without adding any new civil works.
Seghers’ engineers in Belgium can monitor operations at the plant
via a remote control system using the Internet.
Two factors are driving this trend. First, there are fewer
foreign companies establishing operations in Vietnam.
Second, more complaints from local residents and
awareness by polluting companies have increased the
need to cut emissions.
28 U.S. Department of Commerce, International Trade Administration