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Quicker Automation, Bigger Profits

How to quicken the pace of automation in Vietnam's production branches causes hea
companies. Though the national automation strategy has been underway, the process proceeding at a snail's pace.

Mr Phan The Hao (standing) at the workshop on production automation in November 2004 in Ho Chi Minh City

The need to update machinery and equipment in the processing fields, particularly export production has led equipment import costs in recent years. Vietnam's import costs rose from US$11.7 billion in 1999 to an estima in 2004. The import costs of machinery, equipment, and spare parts for production and processing made up 3 total. In a number of industrial automation fields, domestic engineers can now access advanced technologies production lines, and manufacture and install equipment for small and medium scaled automation applications The pace of machinery and equipment reform is quite slow particularly in the industrial field, says chief of the Ministry of Industry's Scientific Technical and Automation Program Nguyen Minh Son. Domestic companies, p owned enterprises, suffer from a low rate of state-of-the art machinery and equipment. Up to 80-85 percent of Vietnam is imported from less-then-modern countries. The latest surveys in several State-run companies show efficiency of most equipment was just 30 percent of the initial level, requiring 1.5 to 2 times higher fuel consum with that in other countries. The domestic textile and garment industry is using archaic equipment and technology, which explains the low production efficiency. Of all the equipment in use, state-of-the art equipment represents just 15 percent of the of the equipment needs to be upgraded and the remaining 30-40 percent must be replaced. The equipment a the mechanical industry lags three to four decades behind that of regional countries and five decades behind developed countries. Furthermore, 90 percent of the equipment is heterogeneous and inconsistent, making it good quality products. In the car making industry, the cost of assembly is 3.5 times higher than that in regiona paper industry, some of the equipment used by the Bai Bang Paper Company, a business with the latest tech the field, has been in use for more than two decades. A survey conducted by the Vietnam Science and Technology Automation Association in late 2002-2003 of 1 showed that 36 out of the total 124 businesses had central control systems, 68 enterprises operated semi-aut systems, and 25 enterprises managed their equipment by hand entirely. Thus, only 25 percent of businesses the art technological level, 32 percent operated with mid-level technology, two percent operated at a decidedly technological level, and as many as 20 percent was using antique equipment. In Ho Chi Minh City, the equipm and technology in the non-State industrial sector lags far behind that in regional countries, according to asses Industrial Department. Just 17 percent of all enterprises have acquired relatively modern technologies. Domestic automation and control companies can only develop minor-scale automation systems, and the ear was mainly acquired from the trading of imported equipment. Most important automation projects fall into the h contractors that now come mostly from neighboring countries like China, India, and Singapore but not from W North American countries or Japan as was the case previously. They do the project's precision work and farm domestic companies. Faster automation is needed During the course of national industrialization and modernization, the Government has paid special attention production branches to improve product quality and boost export value. It has carried out a technical and econ materials. The program consists of four major projects on material technology, automation technology, inform and biotechnology. Those are four key projects aimed at developing automation related economic branches th supported by State Budget capital. The objective of these four projects is to study and design automation production systems that can serve as and apply them in several important production branches relating to exports like aquaculture and seafood pro processing and light industries (wood processing, garments, footwear, and environmental protection). Stimula

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6/3/2005

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of automation systems into major economic branches like oil and gas, power, post and telecommunications, a manufacturing is also needed. The head of the Trade Ministry office in Ho Chi Minh City Phan The Hao, says that it is necessary to take me the automation pace in Vietnam right from now on through Government projects. By doing so, Vietnam can ac becoming an industrialized country by 2020. Along this line, Vietnam needs to approach to world's latest techn progresses to reduce the development gap with other world countries.

http://www.ven.org.vn/print_news.php?id=2455

6/3/2005