Engineering enterprises must abandon thinking 'village pond'

Mechanical industry Vietnam is facing many difficulties and challenges, especially in the context of our country's international integration deeper. With such a low starting point to limited resources, weak competitiveness, enterprises (companies) Mechanical Vietnam must be extremely effort to stabilize in the playground integration.

More challenging opportunities

According to economic experts, about 15 years, due to many reasons our country's engineering sector still weak, competitiveness and international integration is limited. Vietnam's mechanical engineering industry that currently stands at "outsourcing" not enough "to create some homemade products' international competitiveness and being" lost at home ". Other mechanical products serve automotive industry, motorcycles, consumer goods ... mostly still imported, unbranded prestigious Made in

GPMI Vietnam to international competition.
At the same point of view, Mr. Le Van Tuan, General Director of the Vietnam Machinery Erection Corporation (Lilama) recognition, joining the TPP, the challenge will be more opportunities for Vietnam mechanical enterprises. TPP partners are the countries with developing economies, their product standards are higher. Mechanical products of Vietnam on the market when it requires many factors to ensure the quality, delivery time ...

But according to the Heavy Industry Department under the Ministry of Industry and Trade, after joining the World Trade Organization (WTO), mechanical market developing countries have, however, the market size of each product was small. But optimistic point of view, the Department of Industry recognized, next time, when TPP effect, along with the free trade agreement (FTA) Other, Vietnam mechanical enterprises have the opportunity to expand, play product development, thus promoting further development sector.

GPMI - Proactive change to adapt.
The key is now to build investment strategy, the right business and investment have all the tied product

Mechanical Power Corporation building - JSC (AGRIMECO) is one of the companies operating in the field of mechanical engineering was "reaping" a lot of success after equitization, production capacity and labor productivity increased by 100 times than before. Share this success, Le Van An, Chairman, CEO AGRIMECO said: "It is crucial for companies to build investment strategy, the right business and investment have all the tied product . In investment, companies should focus on investment in the latest technology production lines to produce high quality products, good price ".

Mr An said, adding: "When SOEs equitisation yet, all of the investment policy of the company must submit to the competent authority for approval that approved time ... is very long. Moreover, the "superior" put money back was not afraid to do the same enterprise should be responsible for investment performance. "

Another solution to help businesses integrate mechanical successful TPP, according to Le Van Tuan, is improving the efficiency of corporate governance. According to Tuan, advanced enterprise management is a vital task, already, are actively being implemented in attracting and achieved some success. Product quality system must be maintained and ensure whether or not the participation of business leaders. Nothing join TPP, enterprises are exempted from taxes, the product quality is poor.

Representatives Corporation Sanwa Seimitsu Vietnam also said: "To have a competitive position in the region, Vietnam mechanical enterprises should and should prepare a new labor system - generation of high-tech workers, focus simultaneously equipped with extensive industry knowledge to successfully integrate TPP ".

Exchange problems, said Nguyen Van Thu, Chairman of Association of Vietnam mechanical enterprises that, for successful integration, the first thing businesses need to do is mechanical change in thinking. In fact, domestic engineering companies also fragmented, retail, energy and limited resources, so it still has many business types "away", "grabbing". Mechanical enterprises should actively change the way business professional direction, abandoning thinking "village pond" to avoid "losing at home".

The mechanics building needs capital to leverage internal resources

That is the view of Nguyen Huong Duong - General Manager Engineering Company GPMI share the Reporter Newspaper Building.

Mechanical construction sector has not grown, but there are now as COMA2, persistence and consistency. Where is the proof strength of COMA2 growth during the past 40 years journey, sir?

- Yes. From a small class Mechanical Factory, the production of small business, in the years 1988 - 1989, a total of only 120 employees, annual sales between 2-3 billion. By 2005, the total number of employees in the company is 534 people, sales reached 80 billion, the average income of workers is 1.430.000d / person / month. By 2015, the total output value of the company is 270.8 billion, 220.7 billion revenue, the budget 5.86 billion, pre-tax profit of 2.2 billion, per capita income 6.4 million / month, annual dividends are achieved compared to the Resolution from 5-15% / year.

The position of the company is confirmed and is considered as a strong unit of Mechanical Engineering Construction Corporation, production and business activities are growing year after year, the lives of the employees are maintained and steady .

COMA2 known products on the market provides customers appreciate especially the products with high technical requirements for the quality of the weld. COMA2 have to do to achieve that, sir?

- We are aware, people are the decisive factor in any success. Therefore, in recent years, the company focuses special attention to the training and re-training to improve all aspects of the company as qualified staff in political theory, production and business management , scientific, technical, professional and foreign languages.

Company annual regular classes specialized training and skill upgrading for workers as well as technical training to improve welding skills at home and abroad for more than 100 workers welding. Our training school, where no other work is on the international level. Cite as at work COMA2 Nghi Son oil refinery is entering the final phase, when workers started to work under the supervision COMA extremely closely by the General Contractor. They have expressed concern over the capacity of COMA2 in completing their qualifications. But welder COMA2 conquered with the energy and discipline of professional labor. Few people know that there are some elite divers are certified after testing the shortest time in which there are young workers reached 2 certificate in this project with the possibility of special alloy steel welding.

Currently the company has a team of welders in number of quality assurance, this is the source of strength and a key force in the production and trading of short and long term to meet requirements compact construction works .

Although the effort is so, but the real construction engineering industry is stepping steps are struggling, feeling like mechanical industry is forgotten. His opinion on this matter?

- I'm not talking about the story right or wrong, but this is easy to understand, by the fact that want to develop any kind of industry we need to invest in depth, from the policy mechanism to the source capital. Strategic development of the Vietnam mechanical phase 2000 - 2010, with a vision to 2020, so far has spent more than 15 years of development, but just stop at the level of foreign outsourcing to do with simple technology , most of these devices have been used over the years, technical backwardness, lack of spare parts, so enterprises can only stop at a subcontractor with the tender package is not too complicated. There are about 3,000 engineering enterprises, most enterprises lack of funds and difficulty in seeking funds for investment and development.

"When building branches need capital to make leverage internal resources" - UK 2

For groups of machinery products serving the construction industry - one of 8 key product groups are focusing on developing, nor is it an exception. I just particular participation in the contract to design, supply of equipment and construction technology construction (EPC), the business activities in the field of mechanical design consultants in the country do not have the proper investment focus for the design - a matter of survival of this type of enterprise. At present, only a few units have the capability to design, but really did not have complete product design, brand characteristics, particularly in the enterprise, which only meets the design work for equipment simple, not too complicated. Therefore, the design of major equipment and overall design for the plant systems - part having the largest value added (section E of EPC package), they do not have the ability to undertake and also can not be made independently of EPC projects. From this fact shows that, when bidding for construction projects of industrial factory complex as power plants, oil and gas, chemical ... often the winning foreign bidder and EPC .

Thus, it is clear to develop the domestic mechanical engineering industry, needed medium and long term funds for investment in training, human resource development, the design, manufacturing capacity, mechanical equipment, electrical equipment, automation control ...

According to him, the preferential policies for enterprises and capital needs specific mechanical like, sir?

- The highest profit of enterprises fall into the mechanics only 5%, whereas the last time the project is little access to concessional loans with low interest rates. Thus, now more and more difficult operation, not to mention the domestic mechanical engineering enterprises are often forced to cheap because they can not compete with the cost of the business comes from China where we often have to import surplus of materials to serve production.

Besides, it should be added that investments in the field of mechanical engineering is invested in medium- and long-term, not overnight, but can recover the capital immediately or training staff immediately , engineering resources, skilled as other manufacturing sectors by the implementation of the project as well as human resources training usually takes several years, even decades to complete. Therefore, funds for the mechanical engineering industry requires not only the interest rate but also very demanding preferential interest rates preferential prolonged stability in the medium and long term.

Slates for Vietnam's mechanical engineering industry in any way?

The mechanical engineering industry is facing many difficulties when the domestic market gradually fell into the hands of enterprises (companies) exchange. Therefore, along with the efforts of enterprises, the support of the state to enterprises overcome difficulties mechanical moment is essential. Experts said that the mechanical support businesses now, the most practical is to reduce taxes.
Enterprises actively seek market
According to Le Van Tuan, General Director of the Vietnam Machinery Installation Corporation (Lilama), Vietnam has joined the World Trade Organisation, FTA, and recently Agreement Trans-Pacific partnership (TPP) ... should have compliance with the commitment of these organizations. Even the Government's capital market nor the government anymore, but international loans as ADB, WB ... so transparent public bidding is required to be done at the request of the organization international credit. Therefore, companies can not expect the government to the market, which have to efforts to find markets for them.

GPMI - GLOBAL POWERSPORTS MANUFACTURING INC

However, it is noteworthy that in the context of international economic integration, but more extensive mechanical DN keeping the old ways of doing business, quality is unstable, slow delivery times, leading to days of foreign orders as lost, while the domestic market gradually fell into the hands of foreign companies. "Losing at home" is the phrase is mentioned most when talking about mechanical businesses in recent times.

General Elictric story corporations (GE) to seek partners in Vietnam ordered as an example. GE, based in Hai Phong and they want to order casting billet in the nearby area to facilitate transportation. GE went surveyed in a mechanical enterprises in Hai Duong. However the survey, the enterprises do not meet the requirements. Finally, though very keen to work for convenience, but also signed a contract last GE still canceled. They had to order another businessman in Taiyuan with prices and shipping costs are much higher. It is worth mentioning, enterprises are GE signed an order of Korean companies based in Taiyuan, rather than any other local businesses.

Thus, the invisible medium, the weakness of domestic engineering firms have pushed the line into the hands of foreign companies, which are mostly Korean, Taiwan. This has many causes, but the main reason is because local businesses do not meet the partner. There are original DN meet but just the initial orders. Then, the quality goes down increasingly losing confidence that partner. That is not to mention, local businesses have signed a contract if it is hard to be competitive delivery schedule by Vietnam no steel materials for engineering that must depend largely on imported raw materials from China. Not to mention the long delivery time, high risk of delays, many foreign engineering companies also do not want to order products with raw materials from China.

The ministry said that the country has about 14,800 engineering firms. However, only 12 enterprises with over 5,000 employees and 116 enterprises with over 1,000 employees. If the scale of 500 billion capital, nearly 100 businesses. Thus, the amount is not much, but very modest scale. While the domestic market is losing, companies must find ways to reach out to the world market by engaging in worldwide chain link of large corporations. Mr. Le Van Tuan said that with the potential of the current mechanical engineering, the construction of a mechanical products 'Made in Vietnam' is extremely difficult. Instead, can build detailed 'Made in Vietnam'. By joining the global supply chain, an entire machinery products can carry other brands, but a machine parts which can still 'Made in Vietnam'. The story of the Thai automotive industry is an example. In fact Thailand has no automotive brand at all, but a lot of details of the Toyota plant in Japan Assembled in Vietnam is Thailand. "Just details 'Made in Vietnam' in the global chain link is a very long quarter," Tuan said.

Along with the efforts of enterprises, the Government's support to enterprises overcome difficulties mechanical moment is essential. Mechanical and businesses that support enterprises mechanical moment, the most practical is to reduce taxes. In fact, engineering firms, mostly located in remote areas, difficult travel conditions. The works are often in areas with harsh living conditions, labor absorption is not simple. Meanwhile, they are subject to the same tax rate for companies based in the central area of ​​Hanoi, Hai Phong, Ho Chi Minh City ... inherent favorable conditions and attract workers easier. Therefore, to encourage and create fairness for businesses, it is thought, along with the tax reduction should be split up into different tax rates. For example, enterprises in Hanoi taxed at 10%, the enterprise Lai Chau only pay 5%. In the middle of the inner city and suburbs should also have different tax rates to encourage investment to remote areas. Mechanical enterprises have said that the current 22% tax is too high. With export duties, should be 0% to encourage enterprises to export and foreign exchange earnings, employment creation and branding Vietnam to the world.

But that was the immediate, but in the long term, businesses need to be proactive mechanical switch gradually from installation to manufacture, build financial stability with good plants, good governance system to be able to convert trades when necessary.

Mechanical engineering, manufacturing innovation pressure

Like other economic sectors, mechanical engineering - manufacturing is facing pressure to increase innovation and competitiveness in order to adapt to international economic integration.
Mechanical engineering, fabrication before the pressure moi - England 1

Mechanical engineering, manufacturing innovation pressure - GPMI Vietnam

Pressure to increase competitiveness is in place when the Agreement on the Trans-Pacific partnership (TPP) and the Free Trade Agreement between Vietnam and other countries, the economic alliance in the region, the world is and is about to take effect.

Looking at the biggest weaknesses of their own, said Nguyen Van Thu, Chairman of Business Association Vietnam mechanical (VAMI) said that the mechanical production of Vietnam has not done the basic principle is the professional deep cultural and cooperation to bring extensive high efficiency. This is a consequence of the "split" between the state-owned engineering, civil engineering business, engineering central, local mechanics, mechanical engineering industry and the region's foreign direct investment (FDI).

"Also, there are many causes of subjective and objective as investment to develop mechanical engineering was not adequate; management of mechanical manufacturing industry mismatch leads to weak competitiveness and slow adaptation to the integration process. "- Mr. Thu analysis.

So far, the support policies such as tendering, credit, science and technology research or branding and market protection for mechanical Vietnam has not been focused, should not stimulate the body corporate Engineering development.

Even, the domestic enterprises have mechanical experience losses than FDI on tax incentives and lease lasts ... so after 15 years of construction and development, mechanical engineering industry Vietnam's steel producing only low-quality construction.

Mechanical products such as automobiles, motorcycles, consumer goods ... mostly just stop in the assembly of imported components, no brand "Made in Vietnam" for the prestigious international competition.

Prospect of becoming a "new center of world manufacturing" for Vietnam will not easily done, if there is no change in the thinking of all levels and branches of State management; no motivation and sense of self rise of domestic mechanical engineering enterprises.

From the practice of business, Tran Ngoc Ha, General Director, Corporation movers and agricultural machinery Vietnam said, only by way of professionalization and modernization investments have the equipment lines technical proficiency, modern technology, with high level of automation can produce all kinds of high quality products, stable, reasonable price and does not adversely affect the environment.

So, to Foundry strong and sustainable development, the State should have policies to support synchronous and clear on the work market, the investment mechanism, scientific research. Besides, technology transfer, human resource training and financial support to help enterprises not only have more access to new technologies, but also to actively participate in the global supply chain Mr Ha said.

Problem selection technology solutions in the design and manufacture of mechanical products is also a major challenge for many businesses.

Ms. Dam Thi Hong Lan, director, company and business consulting Vietbay said, through cooperation with leading corporations such as Honda Vietnam, LG, Samsung SDI, Panasonic, Yamaha Motor Vietnam, Canon Vietnam South, precision engineering company Vietnam 1 ..., now realize that, to gain market share and standing in the market need to be successful application of scientific and technical progress the new, particularly technology software design, analysis and product processing. This helps to improve labor productivity, reduce costs and create high-quality products.

GPMI Viet nam mechanical engineering industry

Ms. Lan said that the majority of enterprises in the mechanical engineering industry, qualifications and abilities of design engineers is limited. The compliance with intellectual property rights and investment software procurement has not been effective due attention, leading to lower labor productivity.

Meanwhile, product design changes slow, inconsistent application technology, engineers no maximum advantage of the capabilities of enterprise software and effectively invisible because of technological breakthroughs bring.

Desired branding labeled "Made in Vietnam" and export products supporting industries abroad, Ms. Phan Thi Minh, Director of Nhat Minh - one of many companies specializing in the manufacture, design, any mold machining precision stamping, precision plastic parts for companies such as Canon, Kyoei, Fuji Seirok ... expressed concern, not every plant and machinery is done supporting industries.

The story is difficult and requires the most important factor is people, then new to the system and the perspective of the business. "There will not be successful, if we do not invest before, sacrifice and pay the price in advance to be able to step foot in the system of large industrial corporations" - Mrs. Ming stressed.

According to Ms. Minh, businesses need to have the determination to work hard to have the opportunity to learn and elevate himself. In an effort to stabilize the quality of the product, the business direction mechanics help sustainable development. The government also needs to change to support business perspective. State not only supported, but should jointly invest now to grow. Doing so will help enterprises to strengthen the mechanical engineering industry