By making intensive investment in manufacturing lifting equipment and applying international standards to production, Vietnam Steel Structures and Lifting Equipment Joint Stock Company (Vinalift), set up nine years ago, has not only won the trust of major partners in Vietnam, but also affirmed its brand position in international markets like Japan, Norway and Bangladesh. In an interview granted to Vietnam Business Forum on business development orientation, Mr Tran Van Tuan, General Director of Vinalift, said "We always strive to supply the market with products of international quality and establish the name of Vietnamese non-standard lifting equipment in the Vietnamese market. Nguyet Tham reports
Could you briefly introduce Vinalift's nine-year effort to assert its name on the market? What milestones impressed you most?
Since its incorporation, the company's leaders defined that Vinalift would target not only the domestic market, but also international markets. Vinalift has built its own development strategies to become a leading manufacturer of non-standard lifting equipment in Vietnam and a well-known supplier of non-standard lifting equipment in the world market. From its strategies, the company has focused on implementing three important contents: Building standard infrastructure; providing quality products, and training an international standard workforce.
The company has erected large, tall workshops to fabricate and contain heavy lifting equipment. To supply the market with high quality products, we must adopt production standards and quality management standards, ISO 9001 - 2008. As the fabrication of non-standard lifting equipment requires specialized work, we pay special attention to training high-quality personnel. Currently, all design engineers and manufacturing engineers at Vinalift meet international standards and qualifications.
With clear product and market orientation and determination with right business and investment strategies, after nine years of construction and development, Vinalift has become a well-known brand in the Vietnamese mechanical manufacturing industry and gradually positioned the Vietnamese mechanical manufacturing name in the world market. In the domestic market, Vinalift supplies overhead cranes for shipbuilders, seaports, hydroelectric plants, and thermal power plants across the country. Big customers include Pha Rung Shipbuilding Industry Company, Shipbuilding Company 189, and Song Thu Shipbuilding Company. Major Vinalift products include 34.8-metre high portal cranes with a lifting capacity of 80 tonnes; 36-metre overhead cranes of 30 tonnes; 28.8-metre high overhead cranes of 100 tonnes; and overhead cranes of 30 tonnes (size: 12 + 41.5 + 12 metres). For ports, Vinalift supplies 36-metre high hydraulic gantry cranes with a lifting capacity of 25 tonnes to Ba Son Port.
Internationally, in 2014, Vinalift exported gantry cranes to Jeddah Saudi Arabia thermal power project. Specifically, the company shipped 259 lifting devices, including a turbine portal crane with a lifting capacity of 135 tonnes, overhead cranes of 100/30 tonnes with a lifting span of 52 metres, and many other devices. The contract was worth US$4.5 million. This deal marked an important milestone in substantiating Vinalift's capacity of supplying lifting equipment on the international market.
After the successful deal with Jeddah Saudi Arabia thermal power plant, Vinalift signed a contract to supply 200 sets of lifting equipment to Shuquip Saudi Arabia thermal power plant project. The US$1.2 million deal is scheduled for completion in the third quarter 2015. Vinalift also provided a portal crane for a hydropower project in Norway. This 250-tonne portal crane, installed in an industrial factory, is worth US$900,000. Vinalift is carrying out some export contracts for Japanese customers, including the supply of head blocks for STS (ship-to-shore) cranes and bollards for ships of Mitsui Engineering Shipbuilding (MES). The deal is worth US$1 million.
How do you assess the Vietnamese mechanical manufacturing industry? What are its areas of potential, and opportunities and challenges? How should the government support the mechanical engineering industry to develop it?
In the past 10 years, the Vietnamese mechanical engineering industry has dramatically changed, gradually integrated with the world and become an important export sector of the country. However, the industry can meet only 32 percent of the domestic demand for mechanical products. Most mechanical engineering enterprises have small or medium operating scales and lack modern technologies. Meanwhile, support policies still have low effects on mechanical engineering industry.
The Government has issued many regulations requiring project investors to itemise their EPC contracts into small bids for domestic subcontractors to take part in and give priority to domestic subcontractors in projects where the use of imported machinery and equipment is not compulsory. However, the current Law on Tender is still based on auctions while making light of origins and localisation priority. In the meantime, most domestic mechanical engineering companies are now small or medium size, and cannot compete on price with foreign firms.
In addition, tax policies on mechanical engineering industry are not very reasonable. While foreign contractors enjoy zero tax on equipment (including attached materials) used for investment projects, materials imported by domestic mechanical companies for equipment manufacturing are imposed two types of taxes: Import tax of 5 - 20 percent and import value-added tax of 10 percent. Therefore, mechanical products made by domestic companies cannot compete with imported ones.
To develop the Vietnamese mechanical engineering industry sustainably and promote its roles in the context of international integration, Vietnam needs to perfect its mechanisms and policies on mechanical engineering industry development, including tax incentives, soft loans, import policies, cooperation strengthening, investment cooperation, technological innovation and equipment upgrading, to turn out highly competitive products to meet domestic and export requirements.
Mechanical engineering is a foundation industry with a particularly important role in the cause of national industrialisation and modernisation. As a big mechanical engineering company in Vietnam, how will Vinalift orient its development investment to catch up with development trends?
It is certain that mechanical engineering is a foundation industry with a major role in national industrialisation and modernisation. Our country is quickly accelerating industrialisation and modernisation, which requires the development of transport infrastructure, industrial infrastructure, construction and FDI attraction. This process will generate a lot of jobs for domestic companies. However, for the time being, a lot of foreign companies are primary contractors for projects in Vietnam, while many domestic companies do not have enough jobs. The Government needs to give priority to domestic companies by setting up a panel to assess their competencies.
Since its inception, Vinalift has constantly focused on intensive investment for product development and quality improvement. In the context of the market mechanism, we still stick to our philosophy of product development. Specifically, we focus on technological innovation to create products of international quality with competitive prices.
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