Engineering sector needs better policy

Experts outlined their suggestions during a seminar on development strategy for mechanical engineering held by the Ministry of Industry and Trade yesterday in Ha Noi.

The government has so far formulated numerous policies to support the development of the mechanical engineering industry. However, local businesses have not yet received the incentives to develop the industry as expected.

Pham Anh Tuan, deputy director of the Heavy Industry Department under Ministry of Industry and Trade, said that last year, the export value of the mechanical engineering sector reached more than US$15 billion. However, the import value was over $26.5 billion. Meanwhile, the localisation ratio reached only 30 per cent and was lower than set target of between 40 per cent and 50 per cent.

Nguyen Tang Cuong, CEO of Quang Trung JSC, said his business has already invested heavily for many years to prepare for the strategic development of the domestic mechanical engineering. However, he was unable to access bank loans, which cost him a lot of time and opportunities.

Cuong also mentioned that businesses must concentrate on developing a number of key mechanical specialties and products in the field of agriculture, transport, construction and machine building. However, these products are required to have the following stages: design, moulding, assembly, and thermal treatment, in addition to testing and shipping.

Most Vietnamese mechanical engineering businesses only participate in assembly, while design and moulding have not received too much attention from businesses.

By doing such things, how can one develop mechanical engineering and join the global industry, Cuong asked participants. He noted that due to limited finances and human resources they needed to work out a specific strategy for businesses to develop.

Sharing a view with Cuong, Tran Van Quang, chairman of the Dong Anh Electrical Equipment Corporation, said businesses needed to get the support of the State to seek a market. If they did not, they would not dare invest.

Quang also said the State needed to offer more incentives to help businesses to participate in local projects, and gradually create products, while building their credibility in the local market. Locally-made high quality products which are competitively priced should be encouraged by limiting imported products.

If domestic businesses have to seek their own way to develop in the context of poor technology, limited finances and human resources, the local mechanical engineering industry will face too many difficulties, Quang said.

Deputy Minister of Trade and Industry Cao Quoc Hung emphasised that his ministry will take the suggestions from businesses to continue discussing and doing research to work out a more specific development strategy so as to offer better assistance for businesses.

However, businesses should not expect too much in the State's policies. They, themselves, have made every effort and work together to spur the country's mechanical engineering industry.\