Large markets for Vietnam electrical equipment

Vietnamese electrical equipment manufacturers have overcome numerous difficulties and are ready to cope with future challenges as well as to serve growing demands on both domestic and foreign markets.

At a workshop on the potential of and opportunities for the Vietnamese electrical equipment sector that took place recently in Ho Chi Minh City, Le Thi Hong Gam, a master degree holder from the Industrial Policy and Strategy Research Institute under the Ministry of Industry and Trade, said that Vietnamese electrical equipment manufacturers have overcome numerous difficulties and are ready to cope with future challenges as well as to serve growing demands on both domestic and foreign markets.

The difficult time is over

Le Thi Hong Gam said that to overcome difficulties, domestic electrical equipment manufacturers have worked out strategies and taken many solutions to improve their competitiveness. They have launched many kinds of products that meet market demands.

To increase the local contents of its products, the Power Engineering Joint Stock Company (PEC) under the Electricity of Vietnam Group (EVN) has built new factories and purchased modern equipment items such as a distribution transformer assembly line and the CNC automatic corrugated iron cutting machine. The Electrical Equipment Joint Stock Company (THIBIDI) has successfully manufactured epoxy cast resin transformers (this type of transformer is safer for buildings than other types of transformer). In cooperation with GE Consumer-Industrial, a subsidiary of the General Electric Group, THIBIDI manufactures components and accessories of epoxy cast resin transformers for export to Laos and Cambodia.

The Vietnam Electric Cable Corporation (CADIVI) has launched a new product: fireproof medium-voltage underground cable which is suitable to underground works. Some other products of the company, which are of high technical standards, such as heatproof, oil-resistant, fireproof cables, have won the trust of many foreign investors in Vietnam because these kinds of products are equal to imported products in terms of quality. LS Vina Cable has launched hi-tech products such as high-voltage electric cables (170KV), high-voltage underground cables (230KV) and keeps on diversifying its products. LS Vina Cable is one of the first Vietnamese companies that have successfully applied the ERP (Enterprise Resource Planning) software in production and business activities.

Another example, the Wind Turbine Generator Manufacturing Plant in the city of Hai Phong, successfully manufactured the first wind power generator in May 2010. A factory based in the city of Da Nang, which specializes in manufacturing electrical wires and cables for the shipbuilding industry, has contributed considerably to increasing the local contents of ships that are built in Vietnam. A solar battery manufacturer in Long An province is capable to supply solar batteries with capacity of 80-165Wp at the cost that is 30-40% lower than the price of imported products.

Big opportunities

In the opinion of specialists, there are big opportunities for the domestic electrical equipment sector to increase both domestic sales and exports.

Under a plan for electrical equipment development that has been approved by the Government, in 2015-2025, this sector will have to meet 70% of the domestic demand for electrical wires and transformers, 55% of the demand for electric engines and some types of power generator; by 2025, the sector must be capable to manufacture and provide the whole package of electrical equipment for electrical wire and transformer projects; meet 50-60% of the demand for 110-220kV transformers; by 2015 the export revenue must account for 30-35% of the production value; other projections are to meet 60-70% of the domestic demand for electricity meters, electrical instruments, measuring and monitoring systems that are used to ensure safety of the power grid, full equipment for power stations, and the export revenue to account for 19-20% of the production value. The sector will focus on manufacturing high quality electrical wires and cables to increase the export revenue by 35.5% a year.

The demand for electrical equipment products is very high in areas that still have no access to the national power grid, including highland, remote areas and islands. In these areas, electrical equipment manufacturers must take the full advantage of natural conditions and utilize the potential for new and renewable energy development to generate power on site. These areas are a potential market for manufacturers of electrical equipment, renewable energy equipment and clean power production equipment.

In the opinion of specialists, Vietnamese electrical equipment manufacturers must increase their shares on the domestic market. The State is offering many preferences to those who create energy-efficient products and equipment items that are used to tap renewable energy resources as well as those who do research for energy conservation purposes. Specifically, the State create favorable conditions for them to seek preferential loans from development banks, the assistance fund for science and technology development, the national fund for technological renovation, and the national energy efficiency and conservation program.

Apart from traditional markets, the domestic electrical equipment sector can promote exports to neighbor markets such as Laos and Cambodia. Le Thi Hong Gam said that Laos has a population of 6.67 million (2008); the potential for hydropower production in Laos is 23,000MW but the installed capacity of hydropower plants in Laos currently totals only 1,826MW; and Laos has set an objective to electrify 90% of its rural areas by 2020. Cambodia has a population of 14 million and its potential for hydropower production is estimated to be 10,000MW with 89% to be generated by large-sized hydropower plants, 10% by medium-sized plants and two% by small-sized plants. Currently, however, only 22.47% of households in Cambodia have access to the national power grid, of which 82.53% live in urban areas and 9.31% in rural areas. The objective of Cambodia’s electricity development plan is that by 2030, 70% of rural households will have access to the national power grid. Vietnam has signed memorandums of understanding and cooperation agreements with Laos and Cambodia in the field of electricity development. – VEN

Tags: Vietnam electrical equipment market