Domestic engineering industry meets 32% of demand
Domestic engineering industry meets 32% of demand
While total demand for Vietnam’s mechanical engineering market is estimated at US$310 billion in the 2019-2030 period, only 32% can be met domestically, so the country has to import large volumes of equipment and machinery, heard attendees at a conference on September 24.
At the conference on solutions to enhance the local mechanical engineering industry, Nguyen Chi Sang, general secretary of the Vietnam Association of Mechanical Industry, said that the industry might bring in tens of billions of U.S. dollars in profit over the next decade or two, particularly with investment in factories and major national projects.
Before 2003, hydromechanical products were imported from Russia, Ukraine and China, with prices averaging US$2,000 per ton, Sang said. “Once we can design and manufacture, production costs may drop to less than US$1,500 per ton,” he added.
According to the calculations of agricultural experts, though the market for agricultural equipment and machines is some US$500 million per year, the added value for farm produce and food products that utilize mechanization can reach US$5 billion per year.
The mechanical engineering industry now has some 21,000 firms, excluding foreign-invested ones. The number of mechanical firms with 500 workers or more is very small, at only 100 units, and most of these firms are small businesses.
Many attendees at the conference proposed the Government map out a specific strategy to secure markets for the domestic industry with its limited financial resources and technology and outdated management experience. In addition, attention should be given to infrastructure construction.
On hearing these comments, Prime Minister Nguyen Xuan Phuc pointed out that a resolution on solutions to the domestic mechanical engineering industry’s development will be introduced.
Vietnam’s mechanical industry mainly focuses on motorbikes and their parts, household equipment and automobiles and their parts. These subfields account for almost 70% of the total mechanical production value in the country.
Domestic firms are able to produce hydromechanical equipment for hydropower plants, steel rolling equipment and equipment for cement factories.
Besides this, there are nearly 40 automobile manufacturers and assemblers, with a combined capacity of over 680,000 automobiles per year. The localization rate of motorbikes is 85%-95%.
Regarding mechanical equipment for the oil industry, a self-elevating drilling rig, which may replace imported equipment, has been successfully manufactured in the country.
