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Electric Equipment Business: “Taking home-advantage” Strategy

21.01.2012

The strong development of Vietnam’s construction industry is changing completely the electric material and equipment market. If before, electric equipment businesses focus mainly on the demand of general material and lightning equipment, many businesses now have strongly invested electric modern production line for industrial and construction use. One of the market segments that many businesses […]

The strong development of Vietnam’s construction industry is changing completely the electric material and equipment market. If before, electric equipment businesses focus mainly on the demand of general material and lightning equipment, many businesses now have strongly invested electric modern production line for industrial and construction use.
One of the market segments that many businesses are aiming at is switchboard – equipment cannot be lack of in factories, industrial zones or high buildings. Each switchboard type has its own value. For example: distribution switchboards can distribute electric from one place to another safely; saving it from load faults, short circuit… ATS switchboards can automatically switch electric power. In case the grid electricity is cut, this equipment will help to switch to the generator and contrast when the electric is back on.
Some domestic businesses have now been able to manufacture switchboards in the market but in fact these are only enclosures. The switchboards’ core items are mostly imported. Thus, quality has not yet been qualified when the price is still high. At big projects, contracts that supply and install power are always signed with foreign contractors. However, this fact will soon be changed as many electric equipment companies have realized the importance of the market and are investing billions VND in importing modern production line to manufacture high quality switchboard to serve the domestic demand. Specifically, on June 22nd, Hawee Limited Company of Vietnam had officially inaugurated its factory in the Industrial Zone Tien Son (Bac Ninh). The factory is being considered as the biggest and most modern one in Vietnam with two production lines of breaking, stamping, cutting and folding of Trumpf (Germany), all auxiliary systems are also imported from leading industry countries (G7). The factory is specialized in switchboards, cable ladder trays, support systems; with the module design for mass production, the progress is qualified and can adapt with any change, expansion without breaking systems’ structure. Products’ quality is qualified with good material like: sheet metal Nisshin Steel (Japan), Posco (Korea), copper (Thailand) and is managed by ISO 9001:2008 system. 100% of products are tested at factory’s laboratory before delivering. Mr. Trinh Van Ha – President of Hawee said, so far, Hawee has been known as a big electromechanical contractor, be able to undertake electromechanical items of big projects like Ecopark, Crown Plaza, Mipec Tower, LuGiaco
Before the development trend and the necessity in being proactive to manufacture particular materials for projects, Hawee has decided to build factory producing switchboards, cable ladder trays, air conduits and support systems to come up with high quality products, consistent to each project that Hawee collaborates to construct or supply material, equipment.  Both the electric equipment and switchboard markets are quite potential and active. However, according to Mr. Tran Van Quan – Director of Quan Tran Limited Company, if electric equipment companies in Vietnam want to take over the domestic market, besides strongly investing equipment, modern production lines for high quality products, qualifying international standard, the selling price must be competitive to imported ones. Especially, after- service has to be fast and convenient as the electric equipment always asks for high safety, continuous maintenance to ensure the equipment run smoothly. This is one of important factors to bring Vietnam product to Vietnam’s projects. Regarding finance experts’ calculation, electric and lightning equipment often take 10% of total cost of construction projects and is increasing. Therefore, to win contracts of electric manufacturing and supplying from foreign contractors, Vietnam electric equipment businesses have to quickly create their own prestige trademark. Besides, the Government should also support and let domestic electric equipment businesses construct big projects along with other state owned companies. With other civil projects, the Government should make mechanism for businesses to take the chance and get construction contracts. If domestic electric equipment  businesses can get 80% construction contract with the rate 10 – 15% of every project, each year Vietnam will be saving USD millions for the economy.
According to the plan, from 2011 – 2015, the electric industry will achieve the target growth of 18% per year; from 2016 – 2025, it will get 15% per year. Wires and cables that have high quality will reach the export turn-over of 35% per year, until 2025, Vietnam will be able to produce and supply the full set of electric equipment in power transmission and substation projects…
Source: Vietnam Ministry of Industry and Trade
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