Need to include mechanics in the supporting industry development program

Lack of large mechanical enterprises playing a leading role

In recent times, some mechanical products have been manufactured with good quality, equivalent to the quality of products of some countries in the region. Currently, domestic mechanical component manufacturing enterprises have quite good capacity in some fields such as: Molds of all kinds, mechanical components, electric cables, plastic components, technical rubber, etc. In addition, the demand of the supporting industry market is very large, so many enterprises have boldly invested to improve production capacity, focusing on developing quality product lines, serving foreign direct investment enterprises, aiming at exporting mechanical products.

Mechanical processing production at Duc Trung Metal Technology Joint Stock Company. Photo: Hoai Nam

Therefore, domestically produced metal components have met 85-90% of the demand for motorbike production; about 15-40% of the demand for components for automobile production (depending on vehicle type), about 20% for the production of synchronous equipment and 40-60% for the production of agricultural machinery, power machinery and 40% for construction machinery. The supply of metal components for high-tech industries currently meets about 10% of the demand.

There are pioneering enterprises in the country developing supporting industries such as Truong Hai Industrial Group - Thaco Industries in Thaco Chu Lai Industrial Park, Quang Nam. Thaco Industries produces many mechanical products serving life such as agricultural machinery, water supply and drainage pipes, water tanks, auto components and spare parts... Those products have helped Thaco Industries achieve billions of USD in revenue each year and have grown continuously in recent years.

Ms. Truong Thi Chi Binh - General Secretary of the Vietnam Association of Supporting Industries (VASI) - also commented: Mechanical and supporting industry enterprises are facing great opportunities when Vietnam participates in many free trade agreements. These agreements, when effective, will help mechanical enterprises have more advantages in exporting, expanding the market and attracting foreign investment.

However, the quality of industrial products supporting the mechanical industry of some domestic enterprises is still low, and the production cost is high, so it lacks competitiveness. In addition, there is a lack of large, international mechanical enterprises that play a leading role.

According to the Vietnam Association of Mechanical Enterprises (VAMI), despite the strong impacts of the 4.0 Industrial Revolution, the level of mechanical engineering, especially precision engineering - the pillar of industrial production - is still backward compared to many countries. " Enterprises face many challenges in improving technology, keeping up with trends, improving labor skills, infrastructure quality, etc., to be able to participate in the global supply chain and the great competitive pressures from countries in the region as well as around the world " - VAMI representative admitted.

Many recommendations and proposals

As a business specializing in trading mechanical equipment for the plastic molding industry and automation for factories serving production, a representative of ASG Vietnam Engineering Company gave an example of a one-way valve set for plastic injection machines used to produce auto and motorbike components. To make this valve head, the company had to import 100% of the steel materials. " Engineering steel requires very harsh working conditions when operating in high temperature environments and must withstand chemical corrosion. Vietnamese steel manufacturers are mainly in the construction industry, but we cannot find any in the engineering industry, " said a representative of ASG Vietnam Engineering Company.

Due to the weakness in raw materials, many businesses said they were forced to import complete machines for sale. Because if they produced in Vietnam, they still had to import raw materials from abroad, which would increase the cost and make it difficult to compete.

To develop the mechanical engineering support industry, according to VAMI, there needs to be an output support program by connecting with potential buyers of each industry; incentives for current medium-sized supporting industry companies to invest in expanding production, training human resources, financial support, etc.

Some experts in the mechanical industry believe that there should be specific policies to support domestic mechanical enterprises such as supporting training in production management systems and business management systems, thereby helping domestic supporting industry enterprises improve their capacity, meet international standards, and have the capacity to assume the role of a link in the global production and supply chain.

At the same time, it helps businesses have more access to new technology. It is necessary to consider equal investment incentives between domestic mechanical enterprises and FDI enterprises. In addition, the state should also create more orders, including orders for supporting industrial products for Vietnamese mechanical enterprises, especially public investment projects.

Associate Professor Dr. Nguyen Chi Sang, Chairman of VAMI, also said that the Government needs to promote the development of complete mechanical products, large mechanical products such as wind power, high-speed railways, urban railways, medical equipment, bauxite factory lines, etc.

Mr. Le Van Tuan - General Director of Vietnam Machinery Installation Corporation (LILAMA) also said that to solve the difficult problem for the mechanical industry, it is necessary to prioritize a number of issues such as: creating long-term loan sources with stable interest rates according to production characteristics for mechanical enterprises; issuing bidding regulations to contribute to increasing the rate of using domestically produced materials and goods; creating a market for domestic mechanical enterprises; building mechanisms and policies to support production and encourage the consumption of domestic mechanical products in accordance with international commitments.

Mechanics is an industry that needs to be included by the State in the supporting industry development program.

According to economic experts, in order for the Vietnamese mechanical industry to be competitive with FDI enterprises, management agencies need to have policies and mechanisms to encourage business development and require economic projects to prioritize the use of domestic goods.

Ms. Truong Thi Chi Binh said that if the domestic mechanical industry wants to develop, it must have a market, but to do this, the Government needs to have its own mechanism for the industry. Specifically, there must be a clear policy for domestically produced mechanical products in the direction that if any equipment can be produced domestically, it must not be imported.

Some experts believe that it is necessary to study and promulgate bidding regulations in the direction of increasing the rate of using domestically produced materials and goods in accordance with current regulations and international practices. This will both create a market and help improve the capacity and connection of domestic mechanical enterprises.

To develop the mechanical industry in general and the mechanical support industry in particular, according to VAMI, there needs to be an output support program by connecting with potential buyers of each industry; incentives for current medium-sized supporting industry companies to invest in expanding production, training human resources, financial support, etc. Accordingly, mechanics is an industry that needs to be included by the State in the supporting industry development program and enjoy certain preferential policies because developing the mechanical industry is developing a supporting industry for other economic, industrial, and service sectors, not just making some details and parts of machines and technological lines.

Mr. Pham Tuan Anh - Deputy Director of the Department of Industry (Ministry of Industry and Trade) also proposed a solution: the Ministry will continue to strongly develop downstream industries, including some industries such as energy industry, precision mechanical industries as well as some mechanical manufacturing industries to ensure that supporting industries have conditions to develop. This will attract multinational corporations to invest in large-scale projects in Vietnam. By promoting the manufacturing and assembly of finished products, the market for domestic supporting industries will be maintained and expanded, creating the premise for domestic mechanical enterprises to become suppliers, participating in the supply chain of enterprises manufacturing and assembling final products.

The mechanical engineering industry is one of the important industries in Vietnam, playing a role as a foundation for the development of other industries. However, in order for the mechanical engineering industry to develop its potential and compete in the international market, the development of supporting industries for the mechanical engineering industry is necessary and urgent.

Source: https://congthuong.vn/can-dua-co-khi-vao-chuong-trinh-phat-trien-cong-nghiep-ho-tro-333484.html