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Vietnam-made farm machinery weeded out of market
Hardly any Vietnamese companies make agriculture machines to sell to farmers, though they well know that the demand for the machines is great. Tuoi Tre newspaper set out to find out why.
Where are the made-in-Vietnam agriculture machines?
Bui Van Chuong from Ben Tre, an upper Mekong Delta province, recently spent a whole day in nearby My Tho City searching the market for a ploughing machine. He couldn’t find one – not because there were none on sale, but because he aimed to buy a Vietnam-made machine in order to qualify for a preferential loan under a new Government farmer-support program.
Le Thi Minh Nguyet, the owner of the Nhan Thanh farm machinery shop in My Tho City, the seat of Tien Giang province, confirmed that very few shops are selling made-in-Vietnam machines.
Ten farm machinery dealers crowd a stretch of Highway 1-A between Long An and My Tho. However, virtually all the ploughing machines and combine harvesters for sale are Japanese and Chinese-made products. Not even Song Tien Co. in Tien Giang province, well known for its extensive stock of farm machines, sells made-in-Vietnam products. Farther west in Cai Be district, there is a private workshop specializing in making combine harvesters, but it can only build several machines a month.
A matter of cost of production
It is estimated that over 4,500 combine harvesters are in use in the Mekong Delta. However, according to Dr. Hoang Bac Quoc from the Mekong Delta Rice Institute, nearly 90 percent of the machines are made in China.
Even for ‘made-in-Vietnam machines’, experts say, the three most important parts of a combine harvester are imported. Shops always import second hand engines from Japan and South Korea and gear boxes and chains from China.
According to Ngo Van Tinh, the owner of Hai Tinh Workshop in An Giang Province, it is ‘Mission Impossible’ to find a 100 percent Vietnam-made machine, because important parts of the machines still cannot be produced in Vietnam.
Nguyen Hong Thien, the owner of Tu Sang Workshop, said that his workshop can produce some 20 combine harvesters a year. In contrast, buyers can place big orders for an unlimited number of Chinese machines and get delivery within several days.
The Chinese agricultural machines are highly competitive. A small combine harvester made in Vietnam costs 85 million dong on average, while a similar Chinese product sells for 60 million dong.
Especially, retailers prefer selling the Chinese products because they can enjoy a high commission: six to ten million dong on every machine sold. Meanwhile, domestic producers offer only modest incentives to retailers, which really do not encourage them to promote the Vietnamese products.
Weak supporting industries
According to Quoc of the Rice Institute, the weakness of supporting industries is the main reason that Vietnam-made agriculture machines are uncompetitive in the home market.
Duong Hong Quan from the Institute for Industrial Policy agreed. Locally made content in agriculture machines is only ten to twelve percent, he explained. Vietnam still has to import many accessories for making machines.
This explains why the production cost of domestically-made products is always higher than the products of other countries. A lot of agriculture machine shop workers have quit their jobs. Some have shifted to assemble machines from parts imports from China.
Meanwhile, Nguyen Tan Phat, Deputy General Director of SVEAM, the engine and agriculture machine producer, claimed that his can make all kinds of machines for agriculture with local made content ratio of 70, 80 or even 100 percent. SVEAM produces 2,000 diesel engines and 20 to 50 combine harvesters each month, but sales have been very slow, because the products cannot compete with imports which have ‘softer’ prices.
VietNamNet, TT
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