Ellicott Machine Makes History

June 16, 1995|By John E. Woodruff | John E. Woodruff,Sun Staff Writer

Two giant 450-ton dredges from Baltimore-based Ellicott Machine Corp. will be the first big American capital goods sold to Vietnam since President Bill Clinton lifted the embargo on sales to America's former enemy more than 16 months ago.

Ellicott, which has a reputation for aggressively pushing its harbor- and river-deepening equipment in Southeast Asia, completed a $12-million contract yesterday to supply two "Super Dragon" dredges and parts to upgrade five still-working dredges it sold to Vietnam decades ago.

"This is an important moment of history that is being written here on Bush Street today," said Kathleen Harrington, special adviser to Assistant Secretary of State for Asian Affairs Winston Lord, standing on a speaker's platform improvised on the deck of a red-white-and-blue dredge.

Making the trip from Washington to bask in that moment with her were a half-dozen Vietnamese diplomats and officials headed by Le Van Bang, chief of Hanoi's U.S. liaison office, and representatives of the U.S. Commerce, Transportation and State departments, all of which worked to help Ellicott get the deal.

To Baltimore, the contract will mean one or two dozen new jobs at the Bush Street facility, and to Ellicott's suppliers around the country it will mean some 50 or 100 additional jobs, said Peter A. Bowe, the company's president.

The first of the new dredges will go to Ha Tien Province, near Vietnam's border with Cambodia, where it will be used to deepen a channel in the Mekong River. That will allow a new cement plant to ship its products downstream for export, said Nguyen Van Truong, general director of the government-owned dredging company, VINAWACO.

The other will go to the northern port city of Haiphong, near Hanoi, where "oceangoing ships have all kinds of problems using the harbor, because in the whole country the dredges we have can only do less than half of the work we need," Mr. Truong said.

Vietnam first approached Ellicott to buy replacement parts for five dredges that are still in service out of some 15 machines the company had built for the country 30 and more years ago.

From that initial inquiry in 1991, discussions led to a plan to build the two new giant dredges.

But despite Vietnam's need and despite Ellicott's head start, the company "came within a whisker of losing the contract" to IHC Holland, a competitor, in 1994, Mr. Bowe said.

The Dutch company "could call upon the prime minister and the transportation minister to talk to Vietnamese counterparts and could offer government-backed financing," he said.

Because the U.S. does not have full diplomatic relations with Hanoi, Ellicott could not match the Dutch by offering the usual Export-Import Bank financing, said David E. Earle, project manager for the Advocacy Center of the U.S. Department of Commerce.

The day was saved by "some very creative financing," in which the state of Maryland guaranteed $1 million of bonding that enabled the Australia-New Zealand Bank -- one of the few active Western banks in Hanoi -- to lend 100 percent of the price, he said.

While Ellicott worked in Baltimore and Hanoi to piece the financing together, the State, Commerce and Transportation departments all put in new pitches with Vietnamese officials to reopen the door, Mr. Bowe said.

"So did Caterpillar Corp., whose engines will be on the dredges and who, fortunately for us, had just opened a representative office in Hanoi for which this will be the first sale," he said.

Mr. Bowe, who said he normally likes to let private enterprise take its course, said that this time he was glad to have the state and national governments go to bat for him.

"Our Dutch competitors have a subsidized shipbuilding industry, and they can get help from anyone in the government, up to and including the queen, to pressure for foreign contracts," he said.

"In a case like Vietnam, where the customer in fact is the national government, we wouldn't have had a prayer if the U.S. government had not put in a strong effort to back us," he said.

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