Vietnam offers risky rewards

By Tom Clarke

Clearing building sites of landmines and other unexploded ordnances before beginning construction is just one of the problems faced by staff of the Vietnam operation of Hawkins Construction Ltd.

Neil Martin, who has just become area manager for the company in Vietnam, says unexploded mines, bombs and shells litter the country and present a serious risk.

Other difficulties are trying to arrange the supply of building materials and components, trying to get construction equipment such as cranes on site on schedule, and problems that arise through the high level of bureaucracy that exists because of the communist system of government.

Hawkins Construction has been operating in Vietnam for several years. Among completed projects are a 4500 sq m cold store for Swire Pacific Group, a manufacturing plant for Walls Ice Cream and a plant for Proctor and Gamble. It is about to start work on a 6000 sq m manufacturing plant in the Mekong Delta for Pepsi Cola.

Mr Martin says there is big potential for the company in Vietnam, particularly in the food and beverage industries, and in infrastructure projects such as water-treatment plants. Several projects coming up in the near future involve the water supply for Ho Chi Minh City, which he says Hawkins is working on.

But he says the market is difficult at the moment because of the Asian economic downturn. He expects recovery will take at least 18 more months.

Projects like water-treatment plants are aid-funded by organisations such as the World Bank and the Asia Development Bank, while industrial projects are paid for by foreign investors.

Mr Martin says aid agencies and foreign investors all look to international construction companies who can build to international standards within the time scales, the project requirements and the quality objectives they want.

"It's very difficult to set up a business here because it's a communist country, and there's a lot of bureaucracy to get through," he says.

"But, we're already well established in Vietnam and we have a track record. That's very appealing to foreign investors, who want the assurance that they'll be working with somebody who knows the system and how to get the job done, and who'll be here for the duration of the project including the defects liability period.

Mr Martin is optimistic for the future because as well as indicators that the economic recovery is underway, the Vietnamese Government is reviewing its policies and looking at ways of encouraging foreign investment in the country.

A lot of the materials and equipment that Hawkins Construction uses on its Vietnamese projects comes from New Zealand, but the heavy construction equipment needed for the projects is available in Vietnam, although it's not always readily available.

"We have to put a lot more into planning than we would if we were doing a project in New Zealand," he says.

"I've found that you need a high degree of planning and extensive patience to deal with the frustration of working here."

Mr Martin, who is a chartered surveyor, joined Hawkins Construction in Vietnam last year as a project manager.

Originally from Britain, where he worked most recently as project manager for the redevelopment of the Barbican Arts and Conference Centre in London, he moved to Vietnam two and a half years ago with Duffill Watts & Tse, where he was involved in preparing project contracts.