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Heavy industries expand market share
Domestic heavy industry has expanded its market share, but remains unable to gain a bigger share than its foreign counterparts two years after the country joined the WTO.
"Vietnamese heavy industry expanded its market, thanks to FDI enterprises operating in Viet Nam together with the development of supporting industries."
The country continues to see increasing development prospects two years after joining, said deputy head of the Heavy Industry Department under the Ministry of Industry and Trade (MoIT), Ngo Van Tru.
Tru was speaking at a seminar hosted by Vietnamese mechanics and metallurgy and shipbuilding industries last Friday in Ha Noi.
The export turnover of domestic heavy industry in 2008 is estimated to reach US$2.8 billion, while the figure of 2006 was only $1.17 billion, according to the National Research Institute of Mechanical Engineering (Narime)'s statistics. This is an increase of 133 per cent.
The head director of Narime, Nguyen Chi Sang, said: "Vietnamese heavy industry expanded its market, thanks to FDI enterprises operating in Viet Nam together with the development of supporting industries."
Sang added that local mechanical manufacturing enterprises only account for 10 per cent of the domestic market share. However, the remainder belongs to foreign enterprises".
Chairman of the Viet Nam Association of the Mechanical Engineering Industry (VAMI), Nguyen Van Thu, confirmed: "Viet Nam has no advantage, even on its home turf."
Most of the State's direct assistance on price, taxes, and bidding winner appointments for local enterprises were almost all abolished when Viet Nam joined the WTO. Domestic firms were so weak and unable to be competitive, which lead to foreign contractors having the advantage.
Foreign contractors in the past three years have gained ownership of 23 hydroelectricity plants, 19 thermoelectricity plants and 17 cement plants with a capacity of 0.3-2.4 million tonnes of product per annum. Foreigners also have aluminum, chemical, and oil processing factories. Despite an optimistic figure of export turnover in 2008, Viet Nam still had to import mechanical equipment worth $10-12 billion per annum.
Thu warned:" The total investment capital needs for heavy industry from now to 2015 are so big. If we have no reasonable policy, it will remain a profitable market only for foreign enterprises, and lead to the redundancy of 2.5 domestic workers".
Trinh Minh Anh, deputy chief administrator of the National Committee for International Economic Integration said: "Pouring capital into heavy industry is so important to our future, because it will contribute to promoting the development of other industries."
The Ministry of Industry and Trade said it would recommend that the Government offer investment credit to develop heavy industry.
VNA
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