Vietnam’s mechanical manufacturing industry is increasingly lagging behind the country’s milestones and development needs. Currently, domestic mechanical enterprises are facing many challenges, their competitiveness is weaker than that of other countries in the region and around the world.
Identifying opportunities and challenges of Vietnam’s mechanical engineering industry, the article proposes a few recommendations to help Vietnamese mechanics overcome the challenges, take advantage of opportunities and develop sustainably in the context of Industrial Revolution 4.0.
Development of Vietnam Mechanical Industry
Mechanical engineering is one of the industries with a long history in our country. Initially it was manifested in the form of craftsmanship creating tools of production, weapons … for the construction, development and preservation of the country.
Under the French colonial period, although this profession was strongly developed, it could not become a profession in the true sense of Engineering. It was not until 1958, when the Tran Hung Dao Mechanical Factory was built, that the foundation of the mechanical industry was born.
Since then, this Industry has developed quite comprehensively, there has been specialization in some fields, the level of technology is also at a certain level and plays a role as an industry “backbone” of social production, providing equipment, machine tools, engine power … for all economic sectors, meeting the daily needs of the people, making an important contribution to the development of the land economy. country.
Identifying the important and fundamental role of the mechanical engineering industry for socio-economic development. On October 17, 2003, the Politburo issued Conclusion 25-KL / TW on the development strategy of Vietnam’s mechanical industry with specific views and lines: “Engineering is a base industry. platform, plays a particularly important role in socio-economic development “and” must build the Mechanical industry to be competitive enough to rise in the market mechanism and international economic integration “.
Institutionalizing the Party’s guidelines and lines, the Government has issued the Vietnam Mechanical Industry Development Strategy up to 2010, with a vision to 2002, and the mechanisms and policies that prioritize the development of a number of specialties and key mechanical products.
The Prime Minister issued Decision No. 10/2009 / QD-TTg dated January 16, 2009 on the supporting mechanism for the development of production of key mechanical products and the List of key mechanical products, the List of investment project to manufacture key mechanical products, period 2009-2015; Decision No. 1791 / QD-TTg dated November 29, 2012 of the Prime Minister approving the mechanism for pilot implementation of designing and manufacturing equipment for thermal power plants in the period 2012-2025; Decision No. 1556 / QD-TTg dated October 17, 2012 of the Prime Minister approving the Project “Support for small and medium enterprises (DN) development in the supporting industry”; Directive No. 494 / CT-TTg dated 20/4/2010 of the Prime Minister on the use of domestically produced materials and goods in bidding for projects using state capital.
Taking advantage of the Government’s attention and support and Vietnam’s mechanical engineering industry in recent years has achieved certain results.
Specifically, a number of fields recorded a change and breakthrough such as: Hydroelectricity equipment manufacturing (providing for large and small hydroelectric plants in the country), oil and gas rig manufacturing ( supplying oil and gas exploration and exploitation drilling to a depth of 120m, self-lifting drilling rig 90m water, oil well drilling rig), electrical equipment, manufacturing and supplying equipment for cement factories, shipbuilding assorted (oil tankers up to 105,000 DWT, liquefied gas tankers with a tonnage of 5,000 tons, bulk carriers …), complete equipment works (sugar factory with a capacity of 1,000 tons of sugarcane / day, processing rubber latex with capacity of 6,000 tons / year).
Domestic mechanics have also produced and assembled almost all types of cars, trucks and passenger cars; Motorcycle manufacturing has localization rate of 85-95%, meeting domestic demand and export.
A number of research and design agencies and mechanical manufacturing enterprises have step by step renovated, enhanced their consulting capacity, designing, manufacturing equipment and technology, participating in implementing a number of packages of projects. national key project.
The number of mechanical enterprises increased rapidly, from about 10,000 enterprises (2010) to more than 21,000 enterprises in 2016, accounting for 28% of the total number of manufacturing enterprises, creating jobs for more than 1 million employees, accounting for 17% of the total number of employees. in processing and manufacturing industries. According to calculations by the Institute of Industrial Strategy and Policy (Ministry of Industry and Trade), the industrial production value of the Mechanical industry in 2015 accounted for 16.36% of the production value of the processing and manufacturing industry.
According to statistics, in 2016, export turnover of mechanical products also reached over 13 billion USD, mainly household appliances and spare parts for cars and motorcycles. If including all kinds of iron and steel, the export turnover of mechanical products of Vietnam in 2016 reached over 16 billion USD. The above results have partly contributed positively to the socio-economic development and accelerated national industrialization and modernization.
Although certain results have been achieved, Vietnam’s mechanical engineering industry still has many limitations, reflected through the following specific aspects:
First, on the market: The Mechanical Industry has diversified products, but the competition from imported products is relatively fierce. Market expansion still faces many difficulties due to lack of market information and domestic firms’ competitiveness is not strong enough.
Even in the domestic market, it is difficult for mechanical enterprises to participate in investment projects to install equipment in the steel, chemical and energy industries, mainly due to the lack of quality control systems. products according to international standards; Domestic enterprises and mechanical products have not built a brand name and are known to many potential customers. Moreover, free trade commitments also put pressure on domestic enterprises when tariff barriers to protect domestic production are removed.
Secondly, on the level of science and technology: Reality shows that the Vietnam Mechanical Industry has very few inventions, patents registered, equipment and technology level of the whole industry is slow to innovate. Mechanical companies lack output for products, so they do not have the opportunity to accumulate and invest in technology innovation. Industrial Revolution 4.0 (CMCN4.0) took place, new technologies have completely changed the way and methods of current production, placing urgent requirements in innovation and updating technology trends. for mechanical enterprises.
Third, raw materials: Raw and auxiliary materials for the Mechanical industry are mainly iron and steel and non-ferrous alloys, most of these materials and accessories cannot be produced domestically, so they must be imported.
Fourth, on human resources: Human resources in Vietnam Mechanic industry are lacking and weak in both quantity and quality. The number of highly skilled mechanics has decreased, and professional workers lack international vocational certificates and foreign language skills. The research and development force, first of all, the design consultant team has not yet reached the level, meeting the requirements of works and projects on synchronous mechanical equipment.
Fifth, the role of industry associations has not yet brought into play: Industry associations have not brought into full play their representativeness in the collection of common opinions and actions; Has not attracted the participation of mechanical enterprises and has not been closely linked with member enterprises. Currently, the Vietnam Mechanical Association has only attracted the participation of more than 100 enterprises out of a total of over 21,000 mechanical enterprises.
The reason for the above shortcomings and limitations is that most of the domestic mechanical enterprises have small production scale, average technology level, and have not confirmed market capacity. Some foreign firms have strong brands, but in Vietnam they are mainly assembled for local consumption; The level of association and cooperation is still low, unable to bring into play the strength of production assignment and cooperation; Fixed capital for mechanical production is often large, working loan cycle is low, so it is difficult for mechanical enterprises to mobilize capital, engineering projects are also less attractive to commercial banks. compared with projects in other fields.
The overlap in management also limits the development of the Mechanical industry, the monopoly of technology and equipment limits the assignment of specialization, and slow technical and technological innovation in mechanical manufacturing. gas, uneven product quality, high production costs.
The development of standards and techniques of the mechanical engineering industry has not been given due attention, lack of synchronization with the support of the operation of accrediting agencies according to registered standards and regulations; Bidding criteria in many cases also create advantages for foreign enterprises to win bids; The conditions for negotiating the procurement of machinery and equipment are also often detrimental to domestic enterprises …
Opportunities and challenges for Vietnam Mechanical Industry in Industrial Revolution 4.0
According to experts, Industry 4.0 has an important impact on mechanical production now and in the future, especially in technology management, production management …, specifically. : Industry 4.0 will bring many opportunities for Vietnam’s Mechanical Industry to develop, that is:
Firstly, Industry 4.0 allows mechanical enterprises to access information, access knowledge, and access advanced technologies …
Secondly, Industry 4.0 with breakthroughs in new technology helps to drastically reduce manufacturing and operating costs of robots, sharply reduce production costs of additive manufacturing technology (3D printing technology), thereby increasing the possibility of applying robots, additive technology to replace cutting technology in mechanical production for countries with limited economic potential such as Vietnam.
Third, Industry 4.0 is an opportunity for Vietnam to “take a short cut”. Our country’s Mechanical Industry has not yet developed, the scale is still small, so the inertia is small, the risks occurring may not cause too great losses.
Fourthly, the labors of the Mechanical Industry have the quality of being eager to learn and quick, easy to adapt to new things, so it is very easy to adapt to the opportunities and new technologies coming from the Industry 4.0, thereby, improving. qualification, creativity and capture advanced technology to apply.
Fifth, with the quick approach and flexible application of the achievements of Industry 4.0, our country’s Mechanical Industry will have many opportunities to improve the level of technology, increase productivity, shorten the time to bring production. products to the market, producing quality products, at competitive prices … thereby changing the mode of management and administration in mechanical production.
In addition to opportunities, Industry 4.0 also brings many challenges to the Vietnam Mechanical Industry, which are:
Firstly, in Industry 4.0, mechanics workers may have difficulty finding jobs, because manual jobs will be automatically replaced by robots and automatic machines. The formation and development of a workforce of the Mechanical industry equipped with skills and qualifications to exploit and master new technologies and modes of operation is also a big challenge for the training of human resources. Mechanic industry force in our country today.
Second, most of our country’s mechanical enterprises are small and medium enterprises, not competitive enough, not ready to access new technology. Many businesses are also passive with new development trends, are not ready to change their business organization model, in which the competition pressure is increasingly fierce and facing the pressure of investment resources to transform. innovation, breakthrough.
Thirdly, Industry 4.0 with new technologies, especially 3D printing technology (additive technology) has completely changed the traditional cutting technology of the Vietnamese Mechanical industry. This technology allows customers to order products with customized designs and are produced at a faster rate and the world is making dramatic changes, not just limited to production. Products from plastic materials, now metal materials are also applying this technology.
Not to mention, the mechanical manufacturing systems in CMCN 4.0 must be systems capable of deeply connecting, recognizing, collecting and exchanging data such as Cyber Physical Systems or Internet of Things which are considered key technologies. has not been deployed for mechanical production in our country.
The problem posed to the Vietnam Mechanical Industry
From analyzing development practices, limitations, challenges and opportunities of the Mechanical Industry in the context of Industry 4.0, to promote Vietnam’s Mechanical Industry to develop sustainably, the Vietnam Mechanical Development Strategy needs to determine. consider and implement the following issues:
– Regarding the market: Creating a market is a prerequisite for developing and handling trade fraud, rampant import of used equipment.
– Regarding investment capital: Create long-term loans with stable interest rates according to production investment characteristics for enterprises in the Mechanical Industry.
– Regarding the bidding activities for domestic works and projects: Promulgate bidding regulations to contribute to improving the rate of using domestically produced materials and goods and managing general contract packages in the form of contracts. designing, supplying technology equipment and constructing construction (EPC) for machinery and equipment, in order to create a market for domestic mechanical enterprises.
– Regarding industrial promotion, investment promotion and trade promotion: Develop mechanisms and policies to support production and encourage domestic mechanical product consumption in accordance with Vietnam’s international commitments. .
– Regarding business association: Implement business connection programs to strengthen links and joint ventures between domestic enterprises and with large enterprises in the world in the value chain to access technology and standardize. product.
In order to achieve the target until 2035, the Vietnam Mechanical Industry is developed with the majority of specialties with advanced technology, product quality meeting international standards, further participating in the global value chain, basically meeting the demand for mechanical products of the domestic market; The export volume reaches 45% of the total output of the Mechanical Industry, in the coming time, Vietnam needs to synchronously deploy the following strategic solutions:
Firstly, to perfect a system of mechanisms and policies that are synchronous and strong enough to support the development of the Mechanical Industry. In the short term, the Government should soon formulate and promulgate a Decree on the development of manufacturing industries.
Second, develop downstream industries in the large-scale supply chain mechanical field to create opportunities for domestic mechanical enterprises to participate in supplying spare parts and components to manufacturing and installation enterprises. final product assembly. In particular, to focus on the development of mechanical industries with development potentials such as automobiles, industrial equipment, household mechanics and tools …
Third, improve the quality of trade promotion activities, attract investment from world-branded mechanical enterprises to gradually form a domestic supply chain and seek to expand export markets for enterprises. domestic mechanics.
Fourth, building and updating database on mechanical enterprises; effectively deployed business connection programs, linking domestic businesses with foreign ones. At the same time, improve the quality of statistics as the basis for industry analysis and forecasts.
Fifth, ensure long-term loans with stable interest rates for mechanical enterprises through support programs, preferential packages in accordance with domestic regulations and international commitments.
Sixth, quickly complete and synchronously standards and regulations for mechanical products, at the same time, develop and improve capacity of inspection and testing agencies according to registered standards and regulations. .
Seventhly, to build and develop a system for management, evaluation and grant of national technical technical certificates, especially for vocational skills in the mechanical field; Develop incentive mechanisms to encourage the link between training institutions and enterprises in training activities and develop practical training programs and textbooks.