What is the future for Vietnam’s machinery and equipment industry?
At present, the industry of machinery and equipment in Vietnam is being evaluated as having a significant potential for development. This is one of the key fields in the domestic area, greatly affecting the economic structure, especially in industrial manufacturing. With such a significant role, let’s take a closer look at both the opportunities and challenges facing business enterprises today, as well as the future for Vietnam’s machinery and equipment industry, thanks to the support of RX Tradex.
1. Overview of the machinery and equipment industry in 2023.
1.1. Emerging trends in the world.
According to the VIA Industry Department, entering 2023, the global economy will recover after the Covid pandemic. The world has entered a phase of economic reconstruction and redevelopment. The import and export of machinery and equipment industry has expanded along with the need for products manufacturing. [1] Additionally, as a result of the tremendously positive growth trend of artificial intelligence (AI), the machinery and equipment industry is currently moving progressively in the direction of automation technology. Leading companies like Tesla and Apple frequently use AI technology for industrial production processes, machine operation, and increased worker productivity.
Following that, it is anticipated that industrialized nations would engage in a technical arms race to build cutting-edge tools and machinery for the manufacturing sector. In order to expand their industries, developing nations will take advantage of scientific and technological advancements, continually investing in infrastructure, machinery, and equipment. In order to increase GDP rate, enhance product quality, and transition to a green industry or sustainable manufacturing, the overall tendency is to concentrate on growing important economic sectors.
1.2. Practice situation in Vietnamese market.
The Vietnamese market has just begun to attract the attention of global investors, according to Urban Economics. From 28% a decade ago to 37% in 2022, Japanese businesses are buying more raw materials, parts, and spares in Vietnam [2]. The Vietnam-EU Free Trade Agreement (EVFTA), which was signed concurrently, has created new chances for investment collaboration between domestic businesses and global leaders. Vietnamese businesses may thus import a variety of contemporary machinery and equipment at a reasonable cost.
Vietnam is now witnessing a large number of new enterprises enter the market, which is driving up demand for industrial gear and equipment. Particularly in the manufacturing, electronics, metalworking, trash recycling, etc. industries. According to statistics of the General Department of Customs, in January 2022, Vietnam’s imports of equipment, machinery, tools and spare parts reached 2.34 billion USD [3]. From there, it shows that the industrial machinery and equipment industry in Vietnam is in great demand and will be a potential market for businesses to focus on developing in the future. In addition, the Ministry of Industry and Trade also regularly supplements the list of machines, equipment, supplies and materials that can be produced domestically. This is to protect equipment manufacturers in Vietnam, by discouraging the import of certain industries and restricting foreign currency.
2. The future of the machinery and equipment industry in Vietnam.
2.1. The opportunities for the economic players in the sector of machinery and equipment industry in Vietnam.
Market demand continues to grow.
Vietnam has steadily emerged in recent years as a global leader in industrial supply chain management, not only in Southeast Asia. Leading businesses have started to grow their operations and make investments in the improvement of our nation. In Vietnam, the Samsung Group has typically made investments of over 20 billion USD, including plants in Thai Nguyen and Bac Ninh [4]. This results in an impending surge in demand for industrial gear and equipment. Businesses can increase income and transition to a long-term growth plan in the future if they are able to seize this golden era.
Abundant labor force.
Young workers in Vietnam have strong demand and receptive spirits. The simplicity of instruction in the use of industrial machinery and equipment is the key benefit. With the current substantial investment in education, highly skilled personnel are also being recruited steadily. Since that time, businesses in Vietnam’s industrial machinery and equipment sector have benefited directly from this young labor force, which has helped them gain a competitive edge over rivals in the area.
Government assistance for development.
The growth of the industrial machinery and equipment industry is consistently given priority by the government as one of the key areas of the Vietnamese economy. Numerous policies have been developed to safeguard and support the growth of Vietnamese businesses.
The Ministry of Planning and Investment’s Circular No. 05/2021/TT-BKHĐT [5] lists a number of products that may typically be manufactured locally, including machinery, equipment, spare parts, specialized transportation methods, raw materials, supplies, and semi-finished goods. This Circular supports the Government’s efforts to adopt policies that will aid domestic businesses in growing, particularly in the area of industrial machinery and equipment.
2.2. Challenges for enterprises in the machinery and equipment industry in Vietnam.
More fierce competition.
With the current rapid development, the level of competition in the machinery and equipment industry will certainly increase. This is a huge challenge that causes businesses in Vietnam to constantly improve their technology and products. Now, with the participation in major trade agreements in the world, Vietnamese enterprises also need to focus on not only product quality but also the general trend of the world, especially the development of a green economy in the future.
Technological limitation.
In Vietnam, a lot of firms still suffer from significant technological restrictions. Vietnam’s equipment and machinery manufacturing lines at the time did not make extensive use of the world’s most cutting-edge information, techniques, and technologies.
Regarding this matter, there are several problems that need to be resolved. Despite having a big labor force, Vietnam has a low proportion of skilled workers, such as engineers and managers with solid competence. Additionally, learning and implementing new technology takes a lot of time, and not many organizations can spend methodically on million-dollar smart manufacturing systems.
The trend of applying AI technology.
In the future, the most promising market segment is the technology, industrial machinery and equipment supporting the process of automation, applying AI to production. This is both a global trend and a big challenge, requiring Vietnamese businesses to make more efforts to catch up with the global market. The use of Big Data, artificial intelligence, and many other sophisticated breakthroughs in 2023 has sparked a hot trend movement, but as many experts have predicted, this technology will continue to progress and have a significant impact on many facets of the future economy. Therefore, keeping up with this trend would enable Vietnamese businesses to join a wider market and look for growth prospects in the machinery and equipment sector.
3. Summary.
In general, the machinery and equipment industry in Vietnam will certainly develop strongly in the future. What businesses need to do right now is to constantly learn and apply new technologies to their production and business activities. And in 2023, RX Tradex Vietnam Company will organize the Vietnam Manufacturing Expo, a large playground to help businesses update the latest trends in the industry of industrial machinery and equipment, with the participation of more than 200 leading brands in the world. In addition, RX Tradex also organizes other leading exhibition events this year: NEPCON, METALEX Vietnam and Waste and Recycling Vietnam.
Chú thích:
[2]: https://kinhtedothi.vn/200-doanh-nghiep-cong-nghe-va-may-moc-tren-the-gioi-quy-tu-tai-viet-nam.html
