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Removing Bottlenecks For The Mechanical And Engineering Industry


The mechanical and manufacturing industry is considered the “heart” of the heavy industry. However, compared with the actual development needs and situation, the mechanical and manufacturing enterprises of Vietnam as well as Dong Nai still have many bottlenecks in development. In addition to a few large enterprises and corporations that can “makeover”, reaching out to the world, most of the domestic enterprises are still very modest.

The graphic shows the export and import turnover of machinery, equipment and spare parts of Dong Nai in the 11 months of 2021. Source: Dong Nai Statistics Department

Production technology, low competitiveness, most are still outsourcing for foreign direct investment (FDI) partners, so domestic enterprises urgently need to support and create favorable conditions for development. developed to raise the level of Vietnamese technology.

  • Lack of resources to expand production

For Dong Nai, the mechanical and manufacturing industry has great potential for development, but most of the provincial enterprises are limited in size and resources, subject to fierce competition with foreign enterprises, so they have not developed yet realize its full potential. Surveying mechanical and manufacturing enterprises in Dong Nai, the majority are confident about their technical level, skills, ability to grasp new techniques, but are facing big financial problems to invest in current machinery and equipment for high-tech supporting industrial production. According to enterprises, the investment capital for this field is very large, often equivalent to investment capital in land and factories, so most businesses cannot meet it.

Selecting the field of supporting mechanical industry, manufacturing all kinds of vibrating hoppers, automatic billet feeders to supply manufacturing enterprises, Director of Quyet Thang, Production Service Trading Co., Ltd (Bien Hoa), Ngo Thanh Binh, initially had certain successes. Although it is a small enterprise, the products of the research and manufacturing company are highly applicable and are studied by many companies in the industrial park (IP) for cooperation and order.

Although initially quite successful, in reality, enterprises still face many difficulties, in which production space is the number 1 factor. Finding a suitable premises is a very “painful” thing for this enterprise, because the factory had to be changed several times due to lack of initiative in location and insufficient investment resources larger than existing capacity.

similar, Mr. Phan Van Tu, Director of Kim Vinh Thang One Member Limited Liability Company (Bien Hoa Industrial Park 1) shared, during more than 10 years of starting a business, due to limited investment capital, he often had to “cut short and bite long” to survive and develop. In particular, the Covid-19 pandemic in the past 2 years has seriously affected the development plan of enterprises. Besides, before the policy of relocating Bien Hoa 1 Industrial Park, enterprises support, but the problem of finding premises for production at this time is relatively difficult, even exceed the capacity that enterprises have.

Assessing the resources of most mechanical enterprises in the province, Director of Nhat Nam Mechanical Company Limited (Bien Hoa City) Tran Quy said that, basically, the human factor and Vietnamese labor. The South can quickly assimilate technologies and techniques from advanced countries. The problem is that the capital to expand the production scale when there is an opportunity is very lacking. His business is also in the process of expanding its factory by 4,000 m2, but compared to competitors from abroad, that is not much.

“Very few Vietnamese enterprises in the province have the ability to expand production on a large scale, even though they are capable, they can only change step by step. Most enterprises now come up from household production, old machinery and technology, so the quality and competitiveness of products are also a problem “- Mr. Quy said.

The challenge is that our country’s mechanical enterprises are mostly small and medium-sized, not competitive enough, not ready for the conditions to access new technologies. In order to develop strongly and sustainably, enterprises must change their labor structure and occupations, switch from low-skilled workers to high-skilled workers, invest in advanced processing technology, and change their working production management methods and improve product quality control. Meanwhile, investment in industry, especially heavy industry, is very expensive, and the resources of Vietnamese mechanical enterprises are limited. In addition, the policy of prioritizing the development of mechanical products in our country has not created a motivation for enterprises to borrow capital and invest in-depth in production.

  • Promoting the development of the mechanical and manufacturing industry

According to the Chairman of the Vietnam Association of Mechanical Enterprises Dao Phan Long, in the past 5-10 years, Vietnam has imported about 40 billion USD/year of equipment, machinery and materials from abroad output for the whole economy. The market is quite large, but the domestic mechanical engineering industry in Vietnam does not have much market share, mainly supplying auxiliary components or outsourcing for foreign brands. Have to “swim businesses themselves” without receiving effective support. This leads to the lack of orders for domestic mechanics in our country and losses at home.

In order to remove difficulties and obstacles for the supporting industry in general and the mechanical and manufacturing industry in particular, the Government issued Resolution No. 115/NQ-CP dated 6-8-2020 on solutions to promote industry development. In which, the goal is set in the field of spare parts and components: developing metal components and spare parts, plastic – rubber spare parts and electrical – electronic spare parts, meeting the target of submitting by the end of 2025, 45% of the demand for spare parts for industries in the territory of Vietnam. By 2030, supply 65% ​​of domestic demand, promote production of products to serve high-tech industries.

In Dong Nai, in order to urgently develop and raise the level of domestic mechanical engineering enterprises in the province, over the past time, there have also been integrated supporting policies to build. The Department of Industry and Trade has conducted a survey of enterprises in the mechanical and manufacturing industries. Manufacturing enterprises serving agricultural production, automobiles, industrial construction equipment and supporting industries for the mechanical industry were to collect information and assess the current technological status of enterprises. On that basis, deploying favorable policies and development strategies for the mechanical industry for enterprises. At the same time, the Department also develops general reports and thematic reports, updates information of mechanical enterprises on the Department’s website so that the business community has more information channels and cooperates with each other more widely.

According to the Department of Industry and Trade, developing Dong Nai’s mechanical industry with a focus on mechanics for agricultural production, automobile mechanics, industrial construction equipment and industry supporting the mechanical industry is an important task. Support solutions will help enterprises production capacity, create opportunities to participate in the production chain of foreign enterprises through technology application activities and human resource training, output connection for foreign product.

In parallel with the survey of mechanical engineering enterprises to have their own support solutions, the project to support small and medium enterprises of the province, which emphasizes on supporting enterprises in the supporting industry sector, is also being carried out. In which, mechanical engineering is one of the core supporting industries that the province is encouraging development.

Source: BaoDongNai

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