For years, China and India have dominated the market for most industrial machinery in the Asia Pacific region. However, Vietnam has also emerged as an industrial machinery market in recent years. In fact, in some instances, acquiring industrial machinery from Vietnam may be more favorable than from China. This article will explore the key factors to consider when sourcing in Vietnam. It will also highlight some of the construction equipment found in Vietnam.
Industrial machinery in Vietnam: market share & demand
In 1986, the government of Vietnam decided to reform and open its economy and put modernization among its key goals. Over the years, the country has seen significant growth in achieving these milestones. In 2021, for example, the electronics manufacturing industry accounted for 11% of exports.
By 2020, there were over 2,200 companies that specialized in producing machinery and equipment, earning a total of $4.6 billion. The companies in Vietnam have grown at a CAGR of 14.3% between 2010 and 2019. The industry is the second largest sector of Vietnam’s economy, making up 33.7% of the GDP and employing 11.3 million people. The largest sector is services, which accounts for 41.63% of the GDP.
The expansion of seafood production, textile, and electronics industries have caused the rapid growth of the industrial machinery market in the country. In addition, the hydrocarbons, steel, electricity, and coal industries have boomed, with oil production in Vietnam being the third largest in Southeast Asia.
Key factors for sourcing in Vietnam
Here are some of the critical factors to consider before sourcing in Vietnam.
Availability of capable manufacturers for your products
The advantage of Vietnam over other countries is its diversity of skills from which manufacturers can order their products. China is industrially advanced. There are, however, alternatives to China, such as Vietnam, Bangladesh, and Cambodia. Of the three, Vietnam offers the kind of diversity that businesses would require. The products that Vietnam exports include footwear, headwear, food and beverage, metals, textiles, garments, and machinery.
Vietnam’s logistics and infrastructure
Vietnam has undertaken a $5 billion construction of the North-South expressway. This is expected to boost the country’s infrastructure, globally ranked 39th, second only to China, and ranked 26th in the region. India, Cambodia, Indonesia, and Bangladesh ranked 44th, 98th, 46th, and 100th, respectively. Good infrastructure will make it possible to travel to manufacturers easily and transport goods faster and more efficiently.
Ease of doing business in Vietnam
It is easier to start a business than even in China. According to world metrics on the same, China ranked 46th while Vietnam ranked 69th. In addition, Vietnam is among the 34 countries that improved the most between 2018 and 2019 in terms of taxes, contract enforcement, and lowering the cost of starting a business. All these make it easier for businesses to operate in the country.
Foreign-owned Vietnam manufacturers
Investors see Vietnam as an industrial hub because it makes the transition from China to Vietnam easy. For example, in the last decade, Samsung invested $17.3 billion to build eight new factories and an R&D center. Other businesses, too, can easily invest in Vietnam due to its fast growth pace.
Vietnam construction equipment
An excavator is construction machinery with a boom, dipper, cab, and bucket rotating on a platform known as a house.
A backhoe loader is tractor-like heavy machinery fitted with a loader-style bucket on the front and a backhoe at the back. It is also known as a digger, loader excavator, or loader backhoe.
An asphalt paver is a type of machinery that lays asphalt concrete or portland concrete on roads, bridges, and parking lots.
A motor grader is a machine with a long blade that creates a flat surface during grading. It is also known as a road grader or a blade.
A bulldozer is a motorized machine with a blade fitted at the front for pushing material, soil, sand, snow, rubble, or rock on a construction site.
A crane is a machine equipped with a hoist rope or chains and sheaves to lift and lower materials and move them horizontally.
Metal processing machinery
Below are some examples of metal processing machinery.
Metal slitting machine
Metal slitting machines are used to cut steel metal into specified dimensions according to their end-use.
Metal rolling machine
Metal rolling machines are used to create rounded sections from flat steel surfaces.
Metal extrusion machine
Metal extrusion machines are used to form different products using die.
Food processing machinery
Listed below are machines used in food processing that can be sourced from Vietnam.
Food drying machines are used to dry food and help prevent it from going bad.
The grading machine is used to sort different types of fruits based on size. With this machine, businesses can quickly sort through large quantities of fruits.
Fruit processing machine
The fruit pro
cessing machine is used to extract juice from fruits in large quantities. It is also able to store the fruit extract for long periods.
Plastic processing machine
Listed below are machines that are used in plastic production.
Plastic extruder machines allow you to melt down plastic pellets and form them into different helpful plastic products.
Plastic granulation machine
Plastic granulation machines are used to break down plastic for recycling.
Plastic production machine
Plastic production machines help create plastic products. Businesses can use this machine to develop various plastics.
Vietnam can be an excellent alternative source for industrial machinery if businesses are looking for cheap machinery of good quality. Besides, setting up industries to produce machinery is affordable due to cheap labor. Vietnam forms the perfect place for building businesses and businesses that want to spread their wings further.