New Market Penetration and Business Development in the Maritime Sector - Vietnam

Problem

Pursuing foreign market penetration. After the trade embargo between the US and Vietnam was lifted, American firms entered an untapped market where US goods and services were sought after in every sector. Two US maritime companies, one public and one private - public company was spin-off of Fortune 100 Company - desired to invest in Vietnam given its existing shipbuilding capacity, abundant commodities, and strategic geographical location. With no full-time, dedicated, expatriate representative in-country to decipher business practices, laws, manage day-to-day activities, identify local partners, and explore joint venture ideas, this was a difficult task.

Solution

With experience in creating a Vietnam Program for a non-profit organization (NGO) in Washington, DC and international work and living familiarity, hired as a Business Development Manager. Relocation to Hanoi was advantageous due to presence of government ministries, headquarters of targeted state-owned-enterprises (SOEs), and proximity to large shipyards constructed by the former-Soviet Union and China that, at the time, were underutilized and in poor condition. Location of the office gave access to government officials, potential local partners, and greater ease to assess undervalued maritime property assets to evaluate potential business structures (e.g. build-own-transfer (BOT), business cooperation contract (BCC), and joint venture (JV) for shipyard upgrades with technology transfer to comply with current shipbuilding techniques to meet ISO standards). Commodity export was another area of interest, particularly, coal and silica sand.

Managed establishment of local representative office to pursue in-country and regional commercial interests, pursued and secured strategic relationships with ministerial contacts at all levels, including but not limited to Ministry of Transportation, Ministry of Defense, and Prime Minister's Office. Engaged relevant SOEs in maritime, oil and gas exploration, and mining throughout Vietnam to discuss their needs and plan solutions. This was coupled with expanding network of potential partners in Hong Kong, Japan, Myanmar, Singapore, The Netherlands, and UK. Lobbying US and other country embassies and the US Foreign Commercial Service (US FCS) was also critical to business development initiatives.

Frequent reports and updates regarding project status and local partner services needs were discussed with management in the US and Asia and when required, engineers and commodity experts sent to Vietnam to further assess project feasibility. Day-to-day country management duties also included controlling costs, training, responding to request for proposals (RFPs), and keeping all partners abreast of activities, changes in laws, and strictly adhering to Foreign Corrupt Practices Act (FCPA).

Result

Both companies benefited by greater in-country knowledge of Vietnam's needs and expanded local brand recognition and reputation they possessed in other markets. A milestone export credit program application - in terms of first-time application by a maritime entity and requested funding amount - was submitted for proposed construction of two container ships between Vietnam and The Netherlands that required the Vietnamese Prime Minister's approval. A $2 million maritime consulting JV was signed and submitted to the relevant authorizing government body in Hanoi and an agency agreement was initiated between the US companies and the primary local partner.

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