Mechanical engineering industry needs more support for growth

At a mechanical products factory. (Photo: VNA)

Pham Xuan Da, head of the Ministry of Science and Technology’s southern affairs, said the industry plays an important role in manufacturing, which is the backbone of the economy.

“Although the [Government’s] preferential and support policies have not met the expectations of the industry, the mechanical engineering industry has achieved remarkable results such as expanding rapidly in terms of number of enterprises from around 10,000 in 2010 to more than 21,000 enterprises in 2016, and increasing exports to over 16 billion USD,” he said.

“Local enterprises can make some products that we previously had to import. Production lines in factories are synchronised, and enterprises have developed a number of technologies.”

Local firms have also successfully developed many kinds of machinery, equipment and production lines for the agricultural sector, including for animal feed production and cassava starch processing, he said.

Dao Phan Long, chairman of the Vietnam Association of Mechanical Enterprises (VAMI), said in the past all types of steel structures and non-standard equipment used in industrial plants, oil rigs and hydropower, irrigation, cement, and chemical plants had to be imported.

But now Vietnam can make them, he said, adding that local firms can also build ships of 70,000 - 105,000 tonnes.

But Da said the industry has many limitations, including low competitiveness of its products, local shortage of raw material supply and qualified human resources and lack of linkages between companies.

At a recent seminar held in HCM City experts said in the context of integration and the fourth industrial revolution, new requirements have emerged for the mechanical industry.

Do Phuoc Tong, Chairman of the HCM City Association of Mechanical – Electrical Enterprises, said policies to help enterprises get bank loans for buying equipment, machinery and production facilities are necessary as are programmes to help enterprises upgrade their technologies and train human resources.

Building mechanisms to promote technical and technology transfer to Vietnamese companies by foreign enterprises is also vital, he said.

On the other hand, mechanical enterprises need to proactively restructure and embrace innovation, improve management efficiency, reduce costs, improve productivity and quality, expand markets, enhance linkages with businesses in the same industry, and actively participate in global value chains, he said.

Concurring, Nguyen Van Thu, VAMI’s former chairman, said Vietnam’s mechanical engineering industry is a few centuries behind the world, making it necessary to create a driving force for it to develop.

Funding and quality human resources are two important factors in the development of the industry, he said.

“We are living in a flat world and need to have policies ahead of one’s time so that our mechanical engineering quality and capacity can keep up with the demand of the world market.”