The devices for the power management solution developed by Daviteq

According to the Vietnam Association of Mechanical Industry (VAMI), the total industrial production value of the mechanical engineering industry (both domestic output and imports) in 2015 was $50 billion. Of this, the domestic output had value of $16 billion, satisfying 32.5 percent of total demand.

VAMI’s deputy chair Nguyen Chi Sang said if Vietnam sets barriers to protect domestic production and has a reasonable approach, Vietnam’s mechanical engineering would be able to take full advantage of the 4.0 industry revolution and satisfy 70 percent of  market demand by 2030.

The biggest existing problem, according to Sang, is the lack of connection between mechanical engineering and other industries. Oil & gas, and transport and energy sectors, for example, don’t have plans to localize their equipment, but still rely on imports. Besides, the unhealthy competition also hinders the development of the mechanical engineering industry.

VAMI’s chair Dao Phan Long admitted that Vietnam’s mechanical engineering is lagging behind the world.

“While developed countries now have the 4.0 level, Vietnam is still entering the 3.0 period. We are still very weak at automation,” he said.

In general, Vietnam’s small and medium sized enterprises use outdated technologies they buy from overseas at low prices. This is attributed to the small scale of the market which cannot bring enough revenue to cover investment capital.

Meanwhile, Tran Manh Tuan, deputy CEO of VEAM Corporation, complained about the lack of materials.

“The steel products used for machine manufacturing need to satisfy high requirements. But Vietnam still doesn’t have any manufacturing steel mill,” he said. “The technological level of basic mechanical engineering sectors such as casting, forging and plating, especially part and accessory manufacturing, is still low.”

However, Sang of VAMI said that Vietnam has certain advantages in the 4.0 era. Vietnam’s enterprises can choose the technologies most suitable to them. They can buy specialized machines which are not as expensive as traditional processing technologies.

“Cutting machines, for example, have a very high accuracy level and bring higher productivity than traditional machines. Non-traditional technologies such as AI and 3D printers can help Vietnam catch up with developed countries,” he said.

Experts estimate that the total demand for machines and equipment from now to 2030 will be about $350 billion.

The products that don’t require large infrastructure such as electrical devices or machinery controllers could be the opportunities for Vietnam’s enterprises. VAMI believes that if Vietnam can train a qualified labor force, it will be able to master the production fields.

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