With approximately 3,600 operating mechanical engineering businesses and production facilities, providing employment for over 48,000 workers, the province's mechanical engineering industry has gradually mastered and increased the localization rate, creating momentum to promote the development of other industries and the economy . However, limitations in the supply of production materials are a major obstacle to the development of this industry.
According to statistics from relevant authorities, the province's mechanical engineering product structure is becoming increasingly diverse, including: steel smelting and rolling (as raw materials), steel casting, alloy casting, engine manufacturing, and casting of industrial machine parts... These are concentrated in three main sub-sectors: motorcycles and motorcycle parts and components; household appliances and tools; and automobiles and automobile parts.
Currently, the province's mechanical component manufacturing businesses have quite good capabilities in several areas such as various types of molds, mechanical components, electrical cables, plastic components, and technical rubber. In addition, the demand from the supporting industries market is very large, so many businesses have boldly invested to improve production capacity, focusing on developing high-quality product lines to serve foreign direct investment (FDI) enterprises and aiming for the export of mechanical products.
According to the Department of Industry and Trade's assessment, with Vietnam's participation in numerous Free Trade Agreements (FTAs), the province's mechanical and supporting industry enterprises are facing significant opportunities and advantages in exporting to various markets, while also attracting foreign investment into Vietnam. Currently, domestically produced metal components in the province meet 85-90% of the demand for motorcycle production, approximately 15-40% of the demand for components in automobile production, and about 20% for the production of integrated equipment. Supplying approximately 10% of the demand for metal components in high-tech industries... In some key sectors, the province's mechanical engineering enterprises can master the technology and manufacture various types of mechanical equipment serving the mining, thermal power, and chemical industries, as well as integrated equipment for industrial plant manufacturing... Typical examples include: Vietnam Auto and Motorcycle Parts Manufacturing Company Limited, Ding Hong Precision Machinery Company Limited, TOMOCO Vietnam Mold Joint Stock Company… Among them, Vietnam Auto and Motorcycle Parts Manufacturing Company Limited (VAP), headquartered in Van Lam district, is the investor of the Vietnam Auto and Motorcycle Parts Manufacturing Plant with a total investment of 90 million USD. This is one of the first successful cooperation models between Vietnam and Japan in the field of auto and motorcycle parts manufacturing in Vietnam. VAP is a supplier of spare parts to Honda Corporation, and it is also the largest mechanical engineering enterprise in the province, providing employment for over 1,500 workers.
In recent times, the province has focused on attracting investment projects to develop the processing and manufacturing industry; supporting industries, high-tech industries, and environmentally friendly industries to create momentum for growth. With the goal of promoting the mechanical engineering industry to develop more strongly and make it a leading economic sector, the province has increased programs and measures to encourage and support businesses to invest in depth and improve product quality to meet international standards. This includes continuing to focus on supporting and attracting businesses to invest in mechanical engineering serving the automotive, motorcycle, construction, and electrical equipment and materials industries. In addition, the Provincial People's Committee has directed relevant agencies to strengthen support for businesses in the province to connect with large global enterprises in the value chain to access and receive technology transfer, standardize products, and focus on new technologies of the 4.0 industrial revolution to create opportunities for breakthrough change. Strengthening support for mechanical engineering businesses to participate in trade promotion activities will increase opportunities to access more major partners and expand export markets for the province's mechanical products...
However, currently, most mechanical engineering businesses in the province lack control over their capital, having to borrow for investment at high interest rates and being bound by unfavorable conditions from sponsors or financial partners; their technology is still simple. Along with this is the lack of linkage and consolidation among mechanical engineering businesses, making it difficult to form specialized mechanical engineering enterprises that yield effective investment returns. Ms. Nguyen Thi Thanh Ha, President of the Provincial Business Association, stated: Most domestic businesses are small and medium-sized, making it difficult to compete with large foreign businesses, as well as difficult to access support policies. Regarding taxes alone, if foreign businesses invest in production in Vietnam, they will be exempt from or receive reductions in import taxes on technology and production lines; medium-term loan interest rates for production are also low; they will enjoy preferential land lease costs, even support for investment land area; and reduced electricity costs. Corporate income tax will be reduced for the first few years… As for domestic businesses, if they import technology and production lines, they also have to find land to build factories…
The business community in general, and the mechanical engineering industry in the province in particular, urgently needs policy attention and support to resolve certain obstacles for development. In particular, support for loan access and connections with large international businesses and corporations are crucial to promote and create momentum for the mechanical engineering industry to participate in the value chain. In addition, flexible mechanisms and policies are needed to encourage businesses to invest, expand production, and increase the localization rate.
Pham Dang
Source: https://baohungyen.vn/thuc-day-phat-trien-nganh-co-khi-3174517.html
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