Environmental Technologies Industries
Export.gov logo and link to Export.gov Environmental Technologies Industries

Market Plans

Vietnam Environmental Export Market Plan
Chapter 6 - Wastewater Treatment

Vietnam is seriously deficient in the area of wastewater treatment.Enormous quantities of industrial wastewater are generated annually and discharged, untreated, into lakes, canals, rivers, and streams. Companies have insufficient funds to install water treatment facilities. The Vietnamese state-industrial sector remains the largest source of untreated wastewater. Many enterprises are hopelessly mired in debt with no real prospects of turnaround. Spending precious resources on pollution control equipment is rarely a priority.

Foreign-invested businesses, industrial parks, and export processing zones generally have built their own wastewater treatment plants to comply with the government's environmental regulations. According to anecdotal reports, some companies choose not to use the treatment facilities in order to save on operating costs.

In a report issued in May 1999, Professor Le Quy An, a deputy minister at MOSTE, estimated that Hanoi dumps 300,000 m3 of untreated wastewater daily. The Viet Tri Industrial Zone outside Hanoi dumps nearly 170,000 m3 of wastewater into the Red River and its tributaries. The Thuong Dinh industrial zone in Hanoi adds another 22,000 m3 of daily waste. Professor Le also estimated that Ho Chi Minh City discharges 730,000 m3 of wastewater per day. Ho Chi Minh City's infamous "black canals" are open dumping grounds for 700 large factories and 30,000 smaller industrial establishments. Water with biochemical oxygen demand (BOD)content larger than 13 mg/liter is considered contaminated. Some of the water tested in the HCMC canal system reaches BOD content of 50 to 200 mg/liter.

MOSTE estimates the following as the daily amount of pollutants discharged into the city's canals: 590 tons of solid wastes, 270 tons of BOD, 480 tons of chemical oxygen demand (COD), 50 tons of nitrogen, 14 tons of phosphorous, and 110 tons of organic oil.

The most industrialized parts of Vietnam are in provinces and cities to the north of Ho Chi Minh City. Dong Nai province and the city of Bien Hoa as well as Binh Duong province are some of the most economically successful regions of the country and are, in turn, the source of much of the country's pollution.

Bien Hoa Industrial Zone pours tens of thousands of cubic meters of wastewater into the Dong Nai River. Several kilometers away are the Bien Hoa and the Hoa An water plants, which supply usable water to Bien Hoa City and Ho Chi Minh City.

Market Opportunities and Competitive Situation

Nearly all of the key components used in wastewater treatment systems in Vietnam are imported. Local companies are winning contracts to design and install treatment facilities. Almost universally, they purchase parts from overseas and assemble the equipment domestically. Vietnam has little difficulty building or sourcing water tanks and the like. Parts such as fans, blowers, pumps, valves, and motors are imported from a variety of sources, including Italy, France, Switzerland, Japan, and Korea.

Foreign-Invested Enterprises and Joint Ventures

With the decline in foreign investment, fewer opportunities are available for supply of wastewater treatment equipment to foreign enterprises and joint ventures. Most of the foreign-invested manufacturing enterprises have at least some form of wastewater treatment facilities already in place.

Realistic market opportunities are for existing ventures that are building new facilities or expanding production. But here, too, market opportunities are limited, with many manufacturing enterprises facing stockpiles of goods. The market trend is not toward expanding capacity but in managing market gluts.

If a trade agreement with the United States can be finalized, the market should change shape rapidly. Textile producers will be the main beneficiaries of the trade agreement because of the lower import tariffs on Vietnamese textile goods that Normal Trade Relations will bring. With textile and garment firms installing new production lines and expanding output, the need for new 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 m3 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 m3 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 foreign invested enterprises (FIEs) or joint ventures (JVs). By 2000, about half his business was with local companies and half with foreign-invested firms.

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.

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 $3.8 million facility has a daily capacity of 4,000 cubic meters although it can be expanded to 12,000 m3 without adding any new civil works. Seghers' engineers in Belgium can monitor operations at the plant via a remote control system using the Internet.
Table 6.1 Leading Industrial Parks (IPs) and Export Processing Zones (EPZs) in Vietnam
Investor & Capital ($M)
# of foreign investment capital projects
Foreign investment capital projectsb
Environment protection facility
Danang EPZDanang
Amata IPDong Nai
$2604,000 m3/day water treatment plant from U.S., supplied by Hydroteck (Thailand)
Nhon Trach 2 IPDong Nai
Go Dau IPDong Nai
LotecoDong Nai
Bien Hoa 2 IPDong Nai
$1,080$3M water treatment plant (4,000 m3/day)
Ho Nai IPDong Nai
Phu My 1 IPBa Ria-Vung Tau
Viet-Sing IPBinh Duong
Singapore; $52
$2906,000 m3/day sewage treatment plant; piped water
Can Tho IPCan Tho
Noi Bai IPHanoi
Daitu-Hanoi IPHanoi
Sai Dong B IPHanoi
Daewoo-Hanel IPHanoi
Thang Long IPHanoi
Japan;$53Water supply (2,000 m3/day) Water treatment (15,000 m3/day)
Nomura-Haiphong IPHai Phong
Dinh VuHai Phong
US, Belgium, Thailand;$80
Haiphong 96 EPZHai Phong
Hong Kong;$75
$580$3M waste treatment plant supplied by China Eco Teck; 10,000 tons/day
Linh Trung EPZHCMC
$696,00 m3/day water treatment plant
a. Area is in hectares.
b. Values are in U.S. dollars.
Source: Mekong Research.

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.

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 state-owned 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.

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 m3 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.
Table 6.2 Sample Product Lines for Wastewater Treatment Equipment
Osmonic (USA)Water treatment system, including filters, water softener, RO membrane, ozone purifier30 m3/day$21,450
Tsurumi (Japan)Air blower5 m3/minute$3,500-4,000
Alpha-Laval (Holland)Mud conditioner10 m3/hour$30,000
Ebara (Italy)Sewage pump10 m3/hour$500
Caprari (Italy)Sewage pump2060 m3/hour$1,000
Flygt (Sweden)Sewage pump20-80 m3/hour$1,000-1,200
TsuramiSewage pump20-80 m3/hour$750
Trominelc (Germany)Tossing pump20-120 liters/hour$300-2,000
Aldos (Germany)Tossing pump20-120 liters/hour$300-2,000
Dosatron (Italy)Tossing pump20-120 liters/hour$150-1,000
Kohn (Germany)Flow meter60 m3/hour$750
Flygt (Sweden)Air diffuser
Polymer (Singapore)Mud treatment chemicals$8/kg
* Values in U.S.dollars. Subject to import tax rate of 10 –20 percent.
Source: Center for Environmental Technology, Ho Chi Minh City.
Table 6.3 Sample Product Lines for Wastewater Treatment Equipment
Type of product
Centrifugal PumpEBARA, JapanFS5-150 m3/h
Centrifugal PumpEBARA, JapanS, 100SF5-150 m3/h
Centrifugal PumpEBARA, JapanFSGD5-150 m3/h
Chemical Dosing PumpPominent Sigman, GermanySIBA1.6-150 L/h
Submersible PumpEBARA, JapanBest5-150 m3/h
Submersible PumpTsurumi Pump, JapanKTZ, KTV, KRS5-150 m3/h
Submersible PumpJ.S. Pump, TaiwanJ.S., SV45-150 m3/h
Motor of mixerGEAR Motor, USA3/4-10 HP
MixerNeptune Mixer Co., Japan3/4-10 HP
Electric facilities of electric control boxLG Industrial system, Korea, Mitsubishi
AeratorForce 7.1 T, 7.2 T, Italy
Air blowerTaiwan, Japan140-1,800 m3/h
Source: Center for Environmental Technology and Management.

Contact Us  About ITA  ITA Site Map  Privacy Statement
U.S.Department of Commerce    International Trade Administration