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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 processproceeding 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 ledequipment import costs in recent years. Vietnam's import costs rose from US$11.7 billion in 1999 to an estimin 2004. The import costs of machinery, equipment, and spare parts for production and processing made up

total. In a number of industrial automation fields, domestic engineers can now access advanced technologiesproduction lines, and manufacture and install equipment for small and medium scaled automation application The pace of machinery and equipment reform is quite slow particularly in the industrial field, says chief of th

Ministry of Industry's Scientific Technical and Automation Program Nguyen Minh Son. Domestic companies,owned enterprises, suffer from a low rate of state-of-the art machinery and equipment. Up to 80-85 percent oVietnam is imported from less-then-modern countries. The latest surveys in several State-run companies shoefficiency of most equipment was just 30 percent of the initial level, requiring 1.5 to 2 times higher fuel consuwith that in other countries.

The domestic textile and garment industry is using archaic equipment and technology, which explains the loproduction efficiency. Of all the equipment in use, state-of-the art equipment represents just 15 percent of theof 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 behinddeveloped countries. Furthermore, 90 percent of the equipment is heterogeneous and inconsistent, making itgood quality products. In the car making industry, the cost of assembly is 3.5 times higher than that in regionpaper industry, some of the equipment used by the Bai Bang Paper Company, a business with the latest techthe 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 1showed that 36 out of the total 124 businesses had central control systems, 68 enterprises operated semi-autsystems, and 25 enterprises managed their equipment by hand entirely. Thus, only 25 percent of businessesthe art technological level, 32 percent operated with mid-level technology, two percent operated at a decidedltechnological level, and as many as 20 percent was using antique equipment. In Ho Chi Minh City, the equipand technology in the non-State industrial sector lags far behind that in regional countries, according to assesIndustrial 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 thecontractors that now come mostly from neighboring countries like China, India, and Singapore but not from WNorth American countries or Japan as was the case previously. They do the project's precision work and far domestic companies.

Faster automation is needed 

During the course of national industrialization and modernization, the Government has paid special attentionproduction branches to improve product quality and boost export value. It has carried out a technical and ecomaterials. The program consists of four major projects on material technology, automation technology, informand biotechnology. Those are four key projects aimed at developing automation related economic branches tsupported by State Budget capital.

The objective of these four projects is to study and design automation production systems that can serve asand apply them in several important production branches relating to exports like aquaculture and seafood proprocessing and light industries (wood processing, garments, footwear, and environmental protection). Stimul

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of automation systems into major economic branches like oil and gas, power, post and telecommunications,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 mthe automation pace in Vietnam right from now on through Government projects. By doing so, Vietnam can abecoming an industrialized country by 2020. Along this line, Vietnam needs to approach to world's latest techprogresses to reduce the development gap with other world countries.

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