The mechanical industry is still lagging behind without the role of a "leading crane"

In recent times, the industry in general and the mechanical industry in Vietnam have developed with many positive changes, gradually mastering technology, expanding investment to improve product quality and localization rate and developing the market. Facing a huge market potential, diversifying and expanding the market for enterprises in the domestic mechanical industry is still very difficult.

Realizing that the domestic mechanical industry market has had positive changes in both quantity and quality, Dr. Phan Dang Phong - Director of the Institute of Mechanical Research ( Ministry of Industry and Trade ) said that this is a success and shows that enterprises can completely master difficult jobs that have been the privilege of foreign contractors.

“However, the response to the domestic and export mechanical market of our country is still very modest, especially in the field of equipment, all enterprises only meet less than 30% of the equipment demand value. The main reason is that enterprises do not have enough potential and capacity, especially there are not many “leading” enterprises to own source technologies, enough capacity and experience when implementing turnkey projects”, Mr. Phong commented.

Diversifying and expanding the market for enterprises in the domestic mechanical industry is still very difficult.

From the business perspective, Mr. Cao Van Hung, Director of International Market Development, Smart Vietnam Precision Mechanical Joint Stock Company, shared that although there are policies for mechanical enterprises, they are still in the theoretical stage. In particular, for enterprises to access the policies, there are still many procedural difficulties, making it impossible for many enterprises to invest and implement immediately.

“Today’s mechanical industry needs to meet precise conditions, so businesses cannot buy outdated machinery and equipment because the precision will no longer be there. However, if equipped with modern machinery, businesses will spend a lot of resources, while also having to compete with strong partners who already have modern equipment to meet international standards and quality, etc. These factors make it very easy for Vietnamese businesses to be eliminated from the game,” Mr. Hung said.

From the reality of accompanying the activities of mechanical enterprises, especially supporting industry enterprises, Mr. Nguyen Duc Cuong, Vice President of the Hanoi Supporting Industry Association, said that when investing in the manufacturing industry, especially mechanical manufacturing, enterprises will need to invest in infrastructure, then machinery, equipment and build a process system and must have orders to practice during the process of building that process.

“Strengthening the capacity of the mechanical sector does not only take place in 1-2 months but requires 2-3 or 5 years, so enterprises, especially small and medium enterprises, will face many difficulties in financial resources for investment in land, factories, machinery and equipment, etc. Currently, most enterprises still have to rely on loans from banks or financial institutions to invest, so it takes 5-7 years to recover capital. But with a loan interest rate of 5%, after only 10 years, the investment value has increased by 50%, making it impossible for enterprises to compensate,” said Mr. Cuong.

Faced with the context of increasing opportunities for market diversification of mechanical products, Dr. Phan Dang Phong, Director of the Institute of Mechanical Research, mentioned that enterprises need to carefully research the export markets they are aiming for, from there study the policy mechanisms of that market, especially the policy mechanisms signed by the two sides in FTAs.

“The Ministry of Industry and Trade and especially the Trade Promotion Agency need to coordinate with foreign trade offices to organize trade promotion programs in host countries. Thus, businesses need to contact the Trade Promotion Agency to have a plan and provide product catalogs to promote their products. In addition, businesses need to learn information from other businesses that have been successful in foreign markets, and use that as experience to avoid risks when entering new markets,” Mr. Phong noted.

Investing resources for the development of the mechanical field takes a long time.

Vietnam’s mechanical industry still has many opportunities to develop and gain more market share. However, experts and businesses believe that it is necessary to have policy support from ministries, branches and the state in creating markets, linking and improving technology for businesses.

To do that, it is necessary to have the support of State management agencies, the Ministry of Industry and Trade, industry associations as well as localities in implementing policies to support mechanical industry enterprises, promoting the operation of new industrial production projects to create conditions for mechanical enterprises to increase production development capacity, and utilize the ability to meet product quality assurance for export.

Source: https://vov.vn/kinh-te/cong-nghiep-co-khi-van-con-let-det-khi-thieu-vai-tro-cua-seu-dau-dan-post1142996.vov