METALEX Vietnam, a steadfast ally of Vietnamese manufacturers

Vu Trong Tai, General Manager, Reed Tradex Vietnam LLC

Can you highlight prominence of METALEX Vietnam 2019?

METALEX Vietnam, a specialized international exhibition on machine tools and metalworking solutions in Vietnam will be held October 10-12, 2019 in Ho Chi Minh City.

METALEX Vietnam 2019 will showcase improvements in machine tools, precision mechanics and mechanical processing technology with the participation of 500 brands from 25 countries. It expects to welcome 10,000 specialized visitors.

With the theme, “Rising with innovations”, the exhibition will highlight the model and application of the smart factory.

In addition, to support Vietnam’s small and medium enterprises by expanding trade opportunities, connect with international partners and participate in global supply chains, we will associate with the Connecting Small and Medium Enterprises (LinkSME) Project of United States Agency for International Development (USAID). USAID’s LinkSME project will support up to 10 manufacturers exhibit at METALEX Vietnam 2019.

In particular, this year, METALEX Vietnam 2019 will be co-located with Welding Vietnam 2019 - the leading international exhibition in Vietnam on materials, equipment and welding technology that will be launched for the first time, helping factories adapt to Industry 4.0.

METALEX Vietnam 2019 and Welding Vietnam 2019 will be joint event offering a comprehensive platform for Vietnamese and foreign industrialists to explore the latest technologies and solutions in metal working and surface treatment.

It has been said that the event will present a smart factory model. How can this be applied here?

A recent report from Global Market Insights, Inc., estimates that smart factory market value will skyrocket from US$75 billion in 2018 to over US$155 billion in 2025. The smart factory plays an important role in the manufacturing industry’s future because of strong demand for industrial solutions that contribute to the optimization of output, labor cost savings and operating costs, which typically consume a lot of the company’s financial resources.

Advanced digitalized and smart factories will enhance production capacity and reduce costs in many different activities. IoT, AI, Big Data and analysis will be part of the smart factory model. Some planning and management software can even detect potential errors and warn operators, helping eliminate losses, which is why these solutions are always sought. In addition, government initiatives and policies in European and Asian countries to promote the use of smart factories are also key factors for the expansion of this model. Given the efficiency benefits of automation, the smart factory has a strong role to play in the manufacturing, mechanical processing and automotive industries. Therefore, it is a good time to introduce the smart factory model at this year’s exhibition.

Industry 4.0 and smart factories will impact the machine tool market in many ways. Firstly, maintenance plans can be transformed with algorithms of Big Data, promoting operational stability. Second, they can help boost operational efficiency and energy savings. Third, the measurement technology is automated, improving accuracy, minimizing errors, making the quality inspection process smooth. Fourth, communication between operators and machines will improve, and most workers will conduct daily activities alongside robots and machines - cobots, as it is called. Fifth, new machining centers will be born.

How can Vietnamese businesses increase their competitiveness when participating in global supply chains?

We are in a special phase with tremendous opportunities to develop production and become more involved in global supply chains, but with challenges that are not easy to overcome. The prolonged trade war between the United States and China provides a golden opportunity for Vietnamese businesses to embrace the need to supply alternative goods to avoid tax barriers. The CPTPP and EVFTA agreements will open up large markets, while also generating a lot more competition for Vietnamese manufacturers.

We must recognize that low labor cost is not really low because our labor productivity is very low compared to competitors, plus the roadmap is to increase annual labor costs continuously. In order to take advantage of the above-mentioned golden opportunities, Vietnamese enterprises need to improve product quality and increase labor productivity by investing in smarter technology, equipment and solutions.

Precision mechanical and mechanical processing industries, metal and welding surface treatment technologies are the first components of the manufacturing platform. Currently, the supply capacity of our mechanical processing industry is very small in terms of scale, weak in technology, lacks diversity, and is low in productivity. These lead to poor competitiveness.

With a low base of mechanical manufacturing, the import of super components and spare parts for industries is still huge and the supply of supporting products from domestic enterprises is very low. According to the Ministry of Industry and Trade, Vietnam currently has 1,800 enterprises producing spare parts and components, but only about 300 enterprises join the production network of multinational corporations, accounting for about 17 percent. Compared to other countries in the region, assembled cars in Vietnam cost about 20 percent higher due to their small scale and low localization rate. At present, the domestic production and cars assembly only have an average localization rate of about 7-10 percent and the products that have been localized are those with very low technology content. Compared to other countries in the region, the localization rate of Vietnam is still very modest. The localization rate of the average regional countries reached 65-70 percent, Thailand reached 80 percent.

In order to improve global competitiveness, we believe the only way is to quickly adopt advanced industrial solutions to improve product quality, increase productivity, save labor and operation costs.

At METALEX Vietnam, we are honored to contribute to the development of Vietnam’s manufacturing industry by connecting businesses and thus creating new business opportunities, offering new technology updates with advanced solutions.