Hanoi (VNA) – Vietnam’smechanical engineering industry is lagging far behind the world, meaning theGovernment and businesses must renovate to keep up with the fast-movingtechnological revolution, heard a workshop.

At the event on ‘Implementingthe development strategy for the mechanical engineering industry in the contextof the Fourth Industrial Revolution’ held by the Ministry of Industry and Tradein Hanoi on September 5, participants shared  experience and reviewed the sector's shortcomings and limitations while proposing solutions to its future development.

A report of the Vietnam Association ofMechanical Industry (VAMI) showed that total value of industrial production isestimated at 50 billion USD, with domestic production 16 billion USD.

This means the domestic mechanical industrymeets only 32.5 percent of national demand, failing to meet the target of 45-50percent set for 2010 in the development strategy approved in 2003.

According to VAMI President Dao Phan Long,after 20 years of development, Vietnam’s mechanical engineering companies arestill employing technology 2.0 in equipment, work organisation, productionmanagement as well as research and development, which has led to inferiorproducts and human resources compared to regional countries.

He stressed both Government and localbusiness should hold responsibility for this backwardness.

He said the policy system and State managementfor domestic mechanical engineering production was ineffective, unrealistic andincapable of protecting the domestic market. Meanwhile, local businesses havemade spontaneous and extensive investments and failed to renovate technologyand make market research.

The mechanical engineering industry is thebackbone of the economy and supports the development of other industries, butlocal companies are still mainly processing structural steel frames, lackinghigh-value products such as electrical equipment, ships and automobileengineering.

According to mechanical specialist Nguyen VanThu, State authorities are not fully aware of the importance of the industry.An industrialised economy cannot develop without a strong mechanical and heavyindustry.

The world is standing on the brink of a newtechnological revolution (Industry 4.0) which will bring an upheaval inmechanical technology. This poses both challenges and opportunities for thelocal mechanical engineering industry.

The problem was to have a plan to invest innew production lines with state-of-the-art technology and train new mechanicsand engineers to acquire new skills, Pham Hung, former General Director ofLilama Corporation.

Prime Minister Nguyen Xuan Phuc early thisyear approved the industry’s development strategy, requesting the adoption ofadvanced technology, producing high-quality products and joining the globalvalue chain by 2035.

This has provided a new growing momentumfor the industry, Ho Manh Tuan, Deputy General Director of the Vietnam Engineand Agricultural Machinery Corporation (VEAM) said. However, he called forGovernment incentives for investment in the industry, giving priority for bigand large-scale manufacturing companies.

In the first phase, priority should begiven to the production of input materials such as casting, forging and steelproducts which help the country seize control of materials and increase thelocalisation rate, Tuan said.

According to VAMI, Vietnam needs a strategyto develop products which can compete with foreign goods such as manufacturingand assembling trucks, buses, non-standard equipment and structural steel.

Do Thang Hai, Deputy Minister of Industryand Trade, said the ministry will continue to work with other agencies andsectors to study and submit to the Government new policies encouraging theindustry’s development and solving difficulties for enterprises.

It will build a decree on the developmentof the mechanical engineering industry, collaborating with the businesscommunity and associations to adjust the list of key mechanical products aswell as simplifying procedures for this business.-VNA