Vietnamese market of electrical equipment manufacturing
In the process of industrialization – modernization, the electrical industry is becoming a top concern of many countries, especially for developing countries like Vietnam. With huge domestic and foreign consumption potential, this industry has a great road map and opportunities for development. However, besides the opportunities, there are still many difficulties that cannot be overcome immediately. So what are the difficulties in the industry of electrical equipment manufacturing? What have businesses done to overcome those difficulties? And what opportunities are waiting for investors? Let’s find out through the article below.
Difficulties that this sector is facing
Most electrical equipment manufacturers in Vietnam are subject to fierce competition with products originating in neighboring countries such as Thailand, Korea, China, Indonesia, etc. Domestic manufacturers are almost marginalized in front of products from China during tenders for supplying equipment for power projects.
In addition, in the home appliance market, it is estimated that hundreds of billions of VND spent on electrical appliances every year, but mostly from foreign brands, while sales come from domestic brands such as Dien Quang, Tran Phu, etc, are not much. The reason for this is that imported products have a great variety and some other products are less expensive than domestic ones.
However, without hindering by imported products, the electrical equipment manufacturing market in Vietnam has surpassed and improved significantly.
Difficulties that enterprises of electrical equipment industry has overcome
Domestic firms have implemented a variety of strategies to improve their competitive position as well as produce a wide range of products to meet local and export market needs. Typically, Thibidi Electric Equipment JSC under the State-owned Electronical Equipment Corporation has joined with GE Consumer – Industrial Group to invest and produce epoxy cast dry-type transformers with safer fire prevention was exported to Laos and Cambodia. Cooperation with foreign companies is considered a very smart strategy by domestic manufacturers to promote the development of the domestic electrical equipment industry. Through this, enterprises can enhance the market localization, improve their competitiveness.
In addition, products with high technical requirements such as heat resistant, fire resistant, oil resistant manufactured by Vietnamese enterprises are currently selected by many foreign investors. Moreover, many high-tech products such as 170KV high voltage cable, 230KV high voltage underground cable are increasingly invested by many enterprises to improve the quality of electrical equipment production in the country.
After overcoming the difficulties, what are the big opportunities for electrical equipmentmanufacturers?
With the domestic market, according to the Ministry of Industry and Trade’s regulation No. 48/2008 /QD-BCT, in the period from 2015 to 2025, the electrical equipment industry will have to invest and develop to meet 70% domestic demand for line equipment, transformer stations; 55% of the demand for electric motors and some generators. As planned, by 2025, domestic products can provide a full range of electrical equipment for power lines, transformer substations, etc. With the plans proposed by the government, this is a great opportunity for businesses in the electrical equipment industry.
Moreover, another potential market for businesses in this industry is the national grid in remote areas, islands, etc. In these areas, they will make the most of their natural advantages to produce electricity. This is a potential market that domestic electrical equipment manufacturers should exploit.
For the export market, Laos and Cambodia are the potential destinations for Vietnamese enterprises as they are boosting the percentage of households receiving electricity throughout the country but the domestic capacity is not sufficient.
With the difficulties overcome, along with the potential market opportunities in the near future, we are confident that our country’s electrical processing and manufacturing industry will grow even further.
By Marketing Department – Kizuna JV Corporation