A significant jump in machinery and equipment imports in the firstmonths of the year shows businesses are picking up the pace ofmodernising production facilities, radio The Voice of Vietnam (VOV)reported.
In recent years, Vietnam has principally importedmachinery and equipment from China, the Republic of Korea (RoK), Japan,Taiwan, and Germany, with China topping the list of suppliers.
VietnamCustoms statistics show in the first 7 months of the year, machineryand equipment imports from China reached 4.38 billion USD, Japan (2billion USD), the RoK (1.73 billion USD), Taiwan (808 million USD),Germany (652 million USD), the US (483.5 million USD), Italy (227million USD), Malaysia (245 million USD), Singapore (176 million USD)and Thailand (359 million USD).
Import values from theseeconomies have been on a steady but gradually uptrend. For instance,imports from China alone experience growth of more than 1 billion USDon-year.
Increasing imports of machinery and equipment aredirectly attributable to a concurrent rise in demand for technologicalrenovation of domestic businesses and a corollary accretion of foreigndirect investment (FDI) inflow into Vietnam.
The Ministry ofPlanning and Investment (MoPI) reports in the first eight months of theyear, the RoK ranked first among foreign investors in Vietnam with totalregistered capital of 3.22 billion USD, accounting for 31.5 percent oftotal foreign capital into the country, following by Japan with 1.27billion USD (comprising 12.5 percent).
The movement to installadvanced technologies in all stages of production across all sectors hasalso driven machinery and equipment imports up. Currently, importmarkets for both new and used machinery and equipment have expanded.
Onthe one hand, new technological products generally have preeminentfeatures such as energy saving, smaller size and improved automation,but on the other hand are more costly than used equipment.
Inemerging countries, businesses tend to choose second-hand machinery andequipment as the increased cost of the brand-new doesn’t outweigh thebenefits.
Businesses must be cautious when importing second-handequipment. Imports are bound by regulations and in particularenvironmental regulations. Legal guidelines on importing second-handequipment are being promulgated, so importers should exercise duecaution.
Nguyen Chien Thang, Director of the Scansia PacificCompany, says China manufactures machinery and equipment for the timberprocessing sector. Compared to developed countries, it is closer toVietnam in proximity so maintenance, repair and replacement services canbe done more quickly.
This is one of the advantageous factors domestic businesses often choose Chinese partners as main suppliers, Thang says.
Localbusinesses have many choices. In addition to acquiring new machineryand equipment from regional suppliers, they can optionally importequipment purchased, oftentimes at bargain basement prices, frombusinesses in other countries that are going out of business and closingtheir doors.
A case in point is the situation in Italy. Thereare now huge imports coming into Vietnam from Italy. Due to economicdifficulties, many Italian businesses are closing and there areexceptional deals on equipment as a result.
One of the complaintslodged against domestic machinery and equipment is that it has a highprice and the quality is not consistent. Thus most domestic businessesare choosing to import machines and equipment, instead of purchasinglocally.
Do Phuoc Tong, Vice President of the Ho Chi Minh CityAssociation of Mechanical Engineering, says most local mechanicalengineering businesses are small and medium in scale.
The lowerquality in domestic machinery and equipment results from the fact thelocal engineering firms have insufficient funds to invest in newertechnology, Tong says.
Compounding the problem for domesticengineering is that materials, components, and tools for mechanicalengineering production are subject to higher Vietnam import taxes,making it impractical if not impossible for them to effectively compete.-VNA
In recent years, Vietnam has principally importedmachinery and equipment from China, the Republic of Korea (RoK), Japan,Taiwan, and Germany, with China topping the list of suppliers.
VietnamCustoms statistics show in the first 7 months of the year, machineryand equipment imports from China reached 4.38 billion USD, Japan (2billion USD), the RoK (1.73 billion USD), Taiwan (808 million USD),Germany (652 million USD), the US (483.5 million USD), Italy (227million USD), Malaysia (245 million USD), Singapore (176 million USD)and Thailand (359 million USD).
Import values from theseeconomies have been on a steady but gradually uptrend. For instance,imports from China alone experience growth of more than 1 billion USDon-year.
Increasing imports of machinery and equipment aredirectly attributable to a concurrent rise in demand for technologicalrenovation of domestic businesses and a corollary accretion of foreigndirect investment (FDI) inflow into Vietnam.
The Ministry ofPlanning and Investment (MoPI) reports in the first eight months of theyear, the RoK ranked first among foreign investors in Vietnam with totalregistered capital of 3.22 billion USD, accounting for 31.5 percent oftotal foreign capital into the country, following by Japan with 1.27billion USD (comprising 12.5 percent).
The movement to installadvanced technologies in all stages of production across all sectors hasalso driven machinery and equipment imports up. Currently, importmarkets for both new and used machinery and equipment have expanded.
Onthe one hand, new technological products generally have preeminentfeatures such as energy saving, smaller size and improved automation,but on the other hand are more costly than used equipment.
Inemerging countries, businesses tend to choose second-hand machinery andequipment as the increased cost of the brand-new doesn’t outweigh thebenefits.
Businesses must be cautious when importing second-handequipment. Imports are bound by regulations and in particularenvironmental regulations. Legal guidelines on importing second-handequipment are being promulgated, so importers should exercise duecaution.
Nguyen Chien Thang, Director of the Scansia PacificCompany, says China manufactures machinery and equipment for the timberprocessing sector. Compared to developed countries, it is closer toVietnam in proximity so maintenance, repair and replacement services canbe done more quickly.
This is one of the advantageous factors domestic businesses often choose Chinese partners as main suppliers, Thang says.
Localbusinesses have many choices. In addition to acquiring new machineryand equipment from regional suppliers, they can optionally importequipment purchased, oftentimes at bargain basement prices, frombusinesses in other countries that are going out of business and closingtheir doors.
A case in point is the situation in Italy. Thereare now huge imports coming into Vietnam from Italy. Due to economicdifficulties, many Italian businesses are closing and there areexceptional deals on equipment as a result.
One of the complaintslodged against domestic machinery and equipment is that it has a highprice and the quality is not consistent. Thus most domestic businessesare choosing to import machines and equipment, instead of purchasinglocally.
Do Phuoc Tong, Vice President of the Ho Chi Minh CityAssociation of Mechanical Engineering, says most local mechanicalengineering businesses are small and medium in scale.
The lowerquality in domestic machinery and equipment results from the fact thelocal engineering firms have insufficient funds to invest in newertechnology, Tong says.
Compounding the problem for domesticengineering is that materials, components, and tools for mechanicalengineering production are subject to higher Vietnam import taxes,making it impractical if not impossible for them to effectively compete.-VNA
