Vietnam Environmental Technologies Export Market Plan

Case Study 6.2 Overseas Development
Assistance is Driving the Business
Viet Thang Textile Co., one of Vietnam’s largest textile
companies, is listed in Ho Chi Minh City’s “black book” of
leading polluters for good reason. Many of its plants dump
untreated wastewater into canals used by local residents. In
November 1999, the company took a large step toward getting
off that list when it installed its first waste treatment plant with
help from an unlikely source.
Since 1992, Viet Thang had been doing business with Peja NV,
a small Dutch trading company with a representative office in Ho
Chi Minh City. Peja represented several European companies
selling textile equipment to Viet Thang. Recognizing Viet Thang’s
need for pollution control equipment, Peja suggested installing a
waste treatment facility using another company it represented,
Stork Aqua NV. Stork Aqua specializes in waste treatment
facilities for the textile and dairy industries.
Crucially, Peja and Stork were able to arrange financing so that
Viet Thang only had to bear part of the plant’s cost. The firms
applied for, and won, a grant from the Dutch development aid
agency to fund 75 percent of the plant’s $2.5 million cost. Viet
Thang financed the rest, using loans from local banks.
Today the plant is one of the largest ever installed at a stateowned
firm. The facility has a capacity of 5,000 cubic meters of
wastewater per day. The plant reduces BOD to less than 20 mg/
liter, COD to less than 50 mg/liter, and total suspended solids to
less than 50 mg/liter.
Since the plant opened, Peja has received numerous calls from
other state-owned companies seeking to reduce their emissions
and wastewater discharges. Peja has also been active in contacting
state-owned firms listed in the Ho Chi Minh City and Hanoi
environmental black books to propose similar financing schemes.
(See Appendixes K, L, and M for lists of black book firms.)
At the time of publication, numerous local and foreign
suppliers of wastewater treatment equipment were
preparing to bid on a project to supply the state-owned
firm Vinamilk with a treatment plant. Vinamilk is often
voted for Vietnam’s most successful local company, so
it is possible that Vinamilk will be able to finance
installation of the plant from its own resources.
Hanoi Urban Infrastructure Project
The Japan Bank for International Cooperation (JBIC,
formerly OECF) has committed a loan of 11.4 billion yen
toward the development of a new urban center in the
Thang Long North Area, 20 kilometers north of Hanoi.
Overcrowding in Hanoi’s city center is straining its
infrastructure. Under a master plan of Hanoi Urban
Development prepared by Japanese consultants, the new
urban area will be comprised of an industrial zone, a
residential area, a commercial area, and a cargo
distribution center.
Wastewater treatment plants, water supply systems,
drainage and sewerage networks, power supply and a road
system are major additions to be built to improve the
existing infrastructure. The JBIC loan will go toward civil
works, equipment, and consulting services to the project.
HCMC Environmental Sanitation
The World Bank–financed $180 million HCMC
Environmental Sanitation project will contain a
wastewater treatment component in the future. The bank
has suggested that by 2010, Ho Chi Minh City should
build a biotech treatment plant for the Nhieu Loc Thi
Nghe basin with an initial capacity of 400,000 m 3 per
day.
A $142 million treatment station will eventually be
built where the canal empties into the Saigon River, but
funds are not currently available for its construction. For
now, project developers are following the maxim “the
solution to pollution is dilution” and plan to only build a
pumping station at the end of the canal.
Local Environmental Service Companies
Because the key components used for wastewater
treatment plants are almost exclusively imported, an
active market exists for suppliers of pumps, motors,
aerators, and filters. Some regular purchasers of these
items are local environmental service companies. These
firms are often small-scale treatment plants, offering
primary wastewater treatment.
Local companies import equipment, then assemble the
machinery and install the plant onsite. These companies
service both local- and foreign-invested enterprises. For
example, the Center for Environmental Technology
(ECO) in Ho Chi Minh City has installed waste treatment
facilities for some of the largest foreign investors in
Vietnam, such as Cargill, Morning Star Cement, and
Vietnam Brewery.
Another consistent importer of equipment for
wastewater treatment systems in Ho Chi Minh City, is
the Center for Environmental Technology and Management
(CENTEMA). Like most other significant
environmental organizations in Vietnam, CENTEMA
doubles as a research institute and commercial enterprise.
CENTEMA conducts environmental monitoring and
provides engineering/consulting services. Its research has
centered on pollution control at Vietnam’s largest
industrial zones, primarily in the Ho Chi Minh City-Bien
Hoa-Vung Tau industrial triangle. Some of its largest
clients for wastewater treatment systems have included
the ProSun textile factory, Thanh An Seafood Processing
Co., and VEDAN Co., one of Vietnam’s largest food
processing companies.
30 U.S. Department of Commerce, International Trade Administration