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Economic News

Last updated: Thursday, August 16, 2018

 

Reed Tradex passionately forward steps with Vietnam manufacturing industry

Posted: Tuesday, June 12, 2018



Reed Tradex had marked 11th year in Vietnam with three international exhibitions in 2017 which are Metalex Vietnam, Nepcon Vietnam and Vietnam Manufacturing Expo. By stepping up to two digits years, we have annually attached over 30,000 quality visitors, covered 2 biggest economic hubs of Vietnam which are Ha Noi and Ho Chi Minh City. Vietnam Business Forum has interviewed Mr. Suttisak Wilanan, Deputy Managing Director of Reed Tradex Co., Ltd.

Preliminary look-back report on the results of organizing exhibition in Vietnam (number of exhibitors, number of visitors, effectiveness of exhibitions or expectation of delegates)?

Reed Tradex had marked 11th year in Vietnam with three international exhibitions in 2017 which are Metalex Vietnam, Nepcon Vietnam and Vietnam Manufacturing Expo. By stepping up to two digits years, we have annually attached over 30,000 quality visitors, covered 2 biggest economic hubs of Vietnam which are Ha Noi and Ho Chi Minh City. Not only exhibitors, but also visitors have joined our exhibitions to explore the technologies, and to hold the informational and educational conversations throughout the forum and seminar during the show. One of the key success points are our passion to make customers to confidently continue participating in our exhibitions is not only the specialized content, but also the good preparation, comprehensive marketing plan to deliver the right targeted partners to all the participants. Through up and downside situations in more than 10 years in Vietnam, all industrial part-making factory owners, engineers, production managers, and industrialists have always been trusted to use these events as the “Community Platform” to source new solutions, new parts, new suppliers, new partners, and new knowledge to keep up or lead the change that the promising future of AEC will bring.

The outlook about market-oriented and investment environment in Vietnam?

Vietnam economy has been a light spot in Asean and Asia. Despite of unstable political environment around the World, Vietnam economy impressively grew at a 10-year high of 6.81 per cent in 2017 - exceeding the target of 6.7 per cent. The industry and construction sectors were accounting for 33.3 per cent of GDP, grew at 8 per cent in 2017. This is a clear proof of the stability in both political and economic environment of Vietnam which continuously makes Vietnam an attractive destination for foreigner direct investment, especially in manufacturing industries.

In additional, Vietnam has positive signs to all industrialists in term of raising capital. Vietnam successfully attached huge FDI inflow in 2017. The registered foreign direct investment in 2017 increased to $ 35.88 billion, growth 44.4% from 2016. Manufacturing and processing continue to be a major attractor of FDI, with 2017 FDI reaching US$15.87 billion, accounting for 44.2 percent of the total FDI, followed by power production, real estate. Most offshore investment comes from same names, such as South Korea, Singapore, Japan and Taiwan. With big investments, manufacturing industries get strengthened to catch up the international standard which will leverage supporting and component industries to transform into higher precision. In return, it will answer for the high demand of sophisticated components from FDI manufacturers.

Besides, Vietnam positively stimulates to grow comprehensively as the whole nation, not only at some particular cities and provinces. Vietnam has applied a strategy to create balance in FDI attraction among 3 regions. In the result, even Ho Chi Minh City continues to lead amongst all cities and provinces, but it’s followed by the northern province of Bac Ninh and the central province of Thanh Hoa. Other major FDI destinations include Nam Dinh, Binh Duong, Kien Giang, and Hanoi. According to Ministry of Planning and Investment, the government plans to open more Special Administrative-Economic Zones in other provinces. This strategy surely enhances the growth and minimizes the gap of urbanization among regions, as well as attaches more FDI inflow to every part of Vietnam based on the strengths of each province.

Moreover, in term of trading, Vietnam also scores a big success. In 2017, Vietnam’s exports and imports witnessed double-digit growths at 21.1 and 20.8 percent respectively. Total import-export turnover reached a record high of US$400 billion, with a trade surplus of US$2.7 billion. These sweet fruits of Vietnam’s business environment are results since Vietnam has very successfully implemented numerous reforms to improve its favorable business environment for foreign investors.

World economy is going to stably grow while big nations are recently heathier. The opportunities that Vietnam needs to grasp, and also challenges which should be viewed objectively to have good preparation to integrate into the world economy?

In 2017, Vietnam quickly overcame expectations in business that amazingly shows Vietnam has been a shining star in the region. While the World economy is stably growing, Vietnam will stand in front of much more opportunities than ever in 2018. I strongly believe that the processing and manufacturing as well as the property sectors will have still received the largest foreign investment capital volumes in 2018.

In recent years, we have seen a big revolution called Industry 4.0. In my opinion, the 4.0 revolution is now impacting investment trends on a global scale and Vietnam will not see affects at this moment. However, we only expect to see distinct changes from 2020 onwards, but it doesn’t mean Vietnam should ignore this trend until we are too outdated and not able to catch the revolution. Therefore, manufacturing and processing, power distribution and manufacturing, and property will remain the top foreign investment channels in the year ahead. Small - medium sized entrepreneurs need to upgrade and take this opportunity to create their core advantages in the future.



In additional, the “face” of economy is showed by some big corporates and FDI companies, but small and medium enterprises has been grown up to be not only new , but important players in this market. After APEC 2017 at Vietnam, small and medium enterprises agreed that they need to internationalize by upgrading and being able to rise to international standards, but still carrying on their uniqueness and differentiation. In order to support, the government has increased investments for small and medium enterprises and launched specific policies to promote exports. Moreover, the support for training and improving the quality of human resources is their concern, as well as updating new technologies, such as renovation of equipment and machinery, supporting enterprises in trade promotion, participation in fairs and exhibitions in foreign countries, enhancing information and market expansion.

As one of the priority industries, automobile manufacturing industry receives much concern whether Vietnam can catch opportunities coming. According to the Ministry of Industry and Trade, in 2020, the car boom will take place soon after, the demand for the domestic car market in 2025 could reach 600,000 vehicles per year. In order to catch the Vietnamese automobile dream, besides the support of the government, there should be a link between the automobile assembly and supporting industries to enhance output and localization rate, because the prerequisite to increase the localization rate must have sufficient production capacity to invest in technology, machinery and equipment to ensure productivity and product quality with reasonable price. The automotive industry is a high technology industry, and is a driving force for many other supporting industries such as mechanics, electricity, electronics, plastics, rubber, glass, informatics, automation.

Last but not least, Vietnam’s going the right direction to support the comprehensive growth in the whole nation. The government asked the Ministry of Planning and Investment to co-ordinate with relevant agencies and the provincial authorities of Quang Ninh, Khanh Hoa, and Kien Giang to quickly draw up the Law on Special Administrative-Economic Zones. The plan will contribute to attracting FDI in the upcoming year and to create balance in FDI attraction among 3 regions for stably growing.

Like other developing countries, Vietnam has challenges and opportunities in the Industry 4.0 revolution. Your point of view about this key trend?

Vietnam economy continues to rely on the exploitation of mineral resources, but in terms of trend, the transformation of the growth model is positive - less based on resource exploitation and more based on technology and energy which will require time.

The 4th Industrial Revolution is taking place at a rapid pace and has a strong impact on the world economy. In 2006, many people knew that Microsoft as a technology company is in the top of the world's largest companies. At recently, Apple, Alphabet, Microsoft, Amazon or Facebook have built a reputation and occupied the top spots. In Vietnam, on the one hand, this revolution will offer tremendous opportunities for businesses and industries that are well prepared to take advantage of opportunities. On the other hand, it is a challenge for the economy in general, some industries are not suitable and businesses are slow to adapt to the new context. In particular, over time, the Government has felt and appreciated the evolution of the 4th Industrial Revolution. However, taking advantage of the opportunity or reducing the challenge requires awareness of Ministries, branches, localities; followed by the integration of new context into socio-economic development strategies of branches and localities; and provide concrete solutions, action plans, and implementation measures to make the 4.0 revolution an opportunity for the economy to benefit industries and businesses instead of the challenge and costs for the industry and businesses.

In order to maximize opportunities, minimize the negative impacts of the revolution to internationally integrate, it is necessary for Vietnam to have a reasonable development strategy, how Reed Tradex engages in your directions and visions to support the industrialists and manufacturers in Vietnam to take advantage of these business opportunities?

Vietnam is in transformation process to attach the FDI in high tech manufacturing. Therefore, the need of upgrading technology and management system is priority. According to Strategy for development of Vietnam's industry up to 2025 with a vision to 2035 of the Prime Minister, in the field of mechanics and metallurgy, the growth of industrial production value plans to reach 15-16 percent by 2020 and maintain 14-15 percent by 2030. In parallel, the science and technology development need to reach 15-20 percent of technological improvement a year to support the strategy. Basically, it means one technology will be replaced within 5 years by a new generation of technology and the change is going nonstop to reach world standard which is always rising higher. Moreover, the innovation in technology also leads the change in management system as well as demand of high-quality human resources, which improve their competitiveness in the world and regional markets

One of the solutions is to gradually adjust step by step the industrial growth model from the principle of quantity, to base on productivity, quality and efficiency, to promote the development of industries and industrial products with high added value, large export value and associate production with industry service development. Vietnam also needs to focus on developing supporting industries by not only using the most modern technology, but also the right technology will help Vietnam to narrow the gap with hi-tech world's demand.



More than 11 years together with Vietnamese industrialists, Reed Tradex passionately support the industrialists and manufacturers in Vietnam to take advantage of these business opportunities. In 2018, we will focus on developing the exhibition program to be more competitive, not only demonstrate the machineries, but also coordinate with organizations and experts in the industry, also the businesses who are holding the technology to implement the transmission of knowledge resources, technology transfer and exchange of the ability to apply technology and machinery practically, with highest financial efficiency for the manufacturers in Vietnam. We also bring and demonstrate technology of 4.0 industry in Vietnam. Therefore, all delegates will be amazed by many technologies first time in Asia and Vietnam.

We also aim to create our exhibition to become "one platform, one station" where is the center of industrialist community. The community is not only in the scope of domestic where all manufacturers can exchange and connect to be able win at local market, but also the crossing participant of international communities such as Japan, South Korea, Europe, etc. to gain more advantage and get in lane quickly with global standard.

This year, we continuously organize the international business platform for industrialist in Hanoi through the international exhibition “Vietnam Manufacturing Expo 2018” which is an outstanding exhibition on machinery and technology for manufacturing and supporting industries. “Vietnam Manufacturing Expo 2018” will celebrate its 10th edition and will be held at Hanoi International Center for Exhibition (I.C.E) from 8 – 10 August, 2018.

During October 11-13, 2018, at Saigon Exhibition and Convention Center (SECC) in Ho Chi Minh City, we will introduce the 12th edition of “Metalex Vietnam 2018” which is an international exhibition on machine tools & metalworking solutions for production upgrade, and co-located with “Nepcon Vietnam 2018” which is a special exhibition on SMT & testing technologies, equipment and supporting industries for electronics manufacturing.

We will open widely to welcome the entire local and foreign industrialists to the exhibitions, and also comes along with business match making program in which the participants no need to be charged any fee, and it’s in term of the concept to deliver the highest opportunity between investors and manufacturers / suppliers. The seminar programs are planned with rich content to provide knowledge management for top levels in the organization, and also the technical knowledge and experience sharing, production solutions for the research & development department and manufacturing department. At our the exhibitions, there is not only the presence of the leading brands from around the world, but also experts in the industry, always be ready to share technical experience and technology's knowledge to the entire visitors.

Forecast the key technology in near future - 5 year afterwards - which can affect and promote the development of manufacturing industry in Vietnam?

In the recent years, the competition of manufacturing industry is getting more and higher intense. Most of investors need the approximately 0% of failure in the manufacturing industry, especially for high tech products. For instance, high tech companies have applied technologies to reduce their failure in production down to 1 of a million since 20 years ago. This is an amazing number which few companies can achieve, but it saves million dollars, especially for high valued products. Back to reality of Vietnamese local manufacturers, few manufacturers can reach just 99%, which are mostly from FDI. That’s a reason why most of local suppliers can’t take much advantage from giant FDI inflow, due to outdated technologies.

Therefore, Vietnamese manufacturers need to step by step develop with better technologies, skills, knowledge, and business network. In every step of their transformation, they need to choose the right technology suitable to their production chain, until they are able to implement technology 4.0 which is based on digital technology and integrates smart technologies to optimize processes and production methods; specially, which technologies are and will have major impacts such as 3D printing technology in product manufacturing, new materials technology, automation technology, robotics, etc.… that are changing fundamental production background of the world and Vietnam soon.








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