Import Study Metalworking Vietnam 2014

CBI Import
Intelligence:
Market analysis
for metalworking
in Vietnam
(15 January 2014)
Metalworking Market Analysis 15 January 2014
Table of contents
Executive summary .......................................................................................................... 7
1
Background and introduction to the market analysis .....................................................14

1.1
Background .....................................................................................................14
1.2
Objectives .......................................................................................................15
1.3
Approach and Methodology ................................................................................15
Vietnamese economy overview ..................................................................................16

2.1
Historical overview: ..........................................................................................16
2.2
Vietnamese country data and economy overview: ................................................17
2.3
Overview of industry per region .........................................................................21
A.
Promising sectors for import from and outsourcing services from Netherlands .................24
Electronic manufacturing/assembly sector ...................................................................27

3.1
Overview of Vietnams electronics manufacturing sector ........................................27
3.1.1
Government policies .................................................................................28
3.1.2
Manufacturing, Export, Domestic market, and Foreign Direct Investment in

the electronic sector ..................................................................................29
3.2
Value chain......................................................................................................33
3.3
sector
Internal/external factors affecting the Vietnamese electronics manufacturing

36
3.3.1
Internal factors ........................................................................................36
3.3.2
External factors ........................................................................................38
3.4
SWOT Analysis of Vietnamese electronic manufacturing sector ...............................39
3.5
Opportunities for Dutch companies in the electronic manufacturing sector in
Vietnam......................................................................................................................40
3.6
4
Electrical equipment manufacturing sector ..................................................................43

4.1
Overview of the Vietnamese electrical equipment manufacturing sector ..................43
4.1.1
Government Policies..................................................................................44
4.1.2
Manufacturing, the Domestic market, Export, and FDI ...................................45
4.2
Value chain......................................................................................................51
4.2.1
Input: .....................................................................................................51
4.2.2
Manufacturing: .........................................................................................51
4.2.3
Sales/Export and installation: .....................................................................51
4.2.4
Customers: ..............................................................................................51
4.3
Next step recommendations ..............................................................................42
Internal/external factors for electrical equipment manufacturing companies ............52
4.3.1
Internal factors: .......................................................................................52
4.3.2
External factors: .......................................................................................53
4.4
SWOT Analysis of the electrical equipment manufacturing sector ............................53
4.5
Conclusion - Opportunities for Dutch companies in the electrical equipment

manufacturing sector ........................................................................................54
4.6
Moulding manufacturing sector ..................................................................................56
Source: CBI Market Information Database URL: www.cbi.eu Contact: marketintel@cbi.eu www.cbi.eu/disclaimer
5.1
Overview of the moulding manufacturing sector ...................................................57
5.1.1
Government policies .................................................................................58
5.1.2
Manufacturing/export:...............................................................................58
5.2
Value chain......................................................................................................60
5.3
Internal/external factors on moulding manufacturing sector ..................................61
5.3.1
Internal factors: .......................................................................................61
5.3.2
External factors: .......................................................................................62
5.4
SWOT Analysis: ...............................................................................................62
5.5
Comparison with two key competitors .................................................................62
5.5.1
Malaysia ..................................................................................................63
5.5.2
Thailand ..................................................................................................63
5.6
Opportunities for Dutch companies in the moulding sector .....................................63
5.7
B.
Promising sectors for exports from the Netherlands ......................................................66
Agricultural industry .................................................................................................66

6.1
6.1.1
Rice production: .......................................................................................67
6.1.2
Fruit and vegetables: ................................................................................68
6.1.3
Fisheries: ................................................................................................70
6.1.4
Livestock: ................................................................................................70
6.2
Vietnamese agricultural equipment sector: ..........................................................71
6.2.1
Overview of agricultural equipment sector: ..................................................71
6.2.2
SWOT analysis for Dutch agricultural equipment in Vietnam ...........................72
6.3
Agro processing and packaging market ...............................................................73
6.3.1
Overview of the agro processing and packaging sector ..................................73
6.3.2
SWOT analysis for Dutch FPP technologies and equipment in the Vietnamese
market: ...................................................................................................74
6.4
Background study: ...........................................................................................67
Horticultural equipment.....................................................................................75
6.4.1
Overview of horticultural equipment ............................................................75
6.4.2
SWOT analysis of Dutch horticultural equipment in Vietnam:..........................76
6.5
Distribution Channels for agricultural/horticultural/agro processing and packaging

equipment to Vietnam.......................................................................................77
6.6
Market Entry Strategies for agricultural/horticultural/agro processing and

packaging equipment to Vietnam .......................................................................78
6.7
Oil and gas ..............................................................................................................80

7.1
Upstream and Midstream ..................................................................................80
7.1.1
Reserve potentials ....................................................................................80
7.1.2
Exploration and production ........................................................................82
7.2
Downstream ....................................................................................................85
7.3
Sector organisation ..........................................................................................86
7.4
Regulatory environment ....................................................................................87
7.5
SWOT analysis .................................................................................................87
7.6
Market entry ....................................................................................................88
7.7
Opportunities for Dutch companies in the Oil and gas sector ..................................89
7.8
Equipment and machinery for the autonomous manufacture of means of transport such
as bicycles, mopeds, baby carriages etc. .....................................................................92
Annex 1 - List of Vietnamese tradefair in promising sectors ..................................................94

Annex 2 - List of supporting organisations in promising sectors .............................................98
Annex 3a - interview results electronic manufacturing companies ..................................... 100
Annex 3b - List of interviewed companies - Electronics ................................................... 110
Annex 4a interview results electrical equipment manufacturing companies ......................... 117
Annex 4b - List of interviewed companies - Electrical equipment ...................................... 126
Annex 5a interview results moulding companies........................................................... 131
Annex 5b - List of interviewed companies - Molding ....................................................... 138
Annex 6 interview results agricultural equipment trading companies............................... 143
Annex 7a - Interviewed results - Dutch companies ............................................................ 152
Annex 7b - List of interviewed companies - Dutch companies .......................................... 156
Annex 8 key contacts in the vietnamese oil & gas sector .................................................. 158
Annex 9 analysis 1 ...................................................................................................... 159
Appendix 1: Useful contacts ........................................................................................ 182
Appendix 2: Dutch companies active in Vietnam ............................................................ 183
Annex 10: methodologies ............................................................................................... 185
Annex 11 regulations governing promising sectors .......................................................... 187
Annex 12 - trading between the netherlands and vietnam - first 6 months of 2013 ................ 190
Annex 13 - Action plan and further proposals to CBI .......................................................... 192
Annex 14 - doing business in vietnam .............................................................................. 200
Annex 15 guidance for dutch companies for obtaining support in the vietnamese market ..... 204
List of Figures, Tables, Diagrams and Maps

Figure 1: Vietnam Gross Domestic Product from 1996-2012, 2013 estimates ..........................18
Figure 2: Vietnam import-export total value and trade balance, 2001-2012 ............................19
Figure 3: Vietnam Foreign Direct Investment 1993-2012 ......................................................19
Figure 4: Manufacture of computer, electronic and optical products in Vietnam (2005-2012) ....29
Figure 5: Vietnamese Electronic Export Turnover (2009 2012) ...........................................31
Figure 6: Trading in the E&E industry between the Netherlands and Vietnam (US$) from
20102012 ..................................................................................................32
Figure 7: Vietnam manufacture of electrical equipment (2005-2012) .....................................46
Figure 8: Vietnamese electrical products, spare parts and components Export Turnover (2009
2012) ...........................................................................................................47
Figure 9: Vietnamese electrical Cables and Wires Export (2004 2012) .................................49
Figure 10: Vietnam Rice Export Import (1962 2010) .........................................................67
Figure 11: Vietnam proved oil reserve (1992 2013) ..........................................................80
Figure 12: Vietnam proved natural gas reserve (1991 2013) ..............................................81
Figure 13: Vietnam Oil Production and Consumption (1990 2012) .......................................83
Figure 14: Vietnam Gas Production and Consumption (1990 2012) .....................................84
Table 1: Minimum wages 2013 ..........................................................................................20

Table 2: Regional industrial competitiveness in East Asia and the Pacific and world ranking
Comparison 2012-2013 ........................................................................................20
Table 3: Electricity output to 2030 .....................................................................................49
Table 4: The volume of transmission lines substations that are expected to be built in the
period 2010-2030................................................................................................50
Table 5: Capital investment in electricity development .........................................................50
Table 6: Mechanisation rate in the agricultural sector (2010) ................................................71
Diagram 1: Electronic manufacturing sector value chain .......................................................35

Diagram 2: Value chain for the electrical equipment manufacturing sector ..............................52
Diagram 3: Value chain of mould manufacturing .................................................................61
Diagram 4: Position of Vietnams moulding manufacturing sector .........................................63
Diagram 5: Equipment Distribution Channels ......................................................................77
Map 1: Sector regional map ...........................................................................................23

Map 2: Major Oil and gas Basins in Vietnam ........................................................................82
List of References
Trading Economy Statistic, World Bank
General Department of Vietnam Custom (Vietnam Custom) Statistic
Ministry of Planning and Investment
General Statistic Office, Vietnam (GSO)
Vietnam Official Gazette
Vietnam Electronic Industry Association (VEIA)
Global value chain, Timothy J. Sturgeon, Momoko Kawakami
Regional industrial competitiveness in East Asia and the Pacific and world
ranking Comparison 2012 2013 carried out by UNIDO
World Electronics Forum
Labor Ministries of Vietnam and regional countries (Singapore, Malaysia,
Indonesia, Thailand, Philippines)
Industrial Areas Plan to 2020
Kaname Akamatsu research on industry development - Flying geese
paradigm
Singapore Economic Development Board (www.edb.gov.sg)
Thailand Board of Investment (www.boi.go.th)
Malaysia External Trade Development Corporation
(http://www.matrade.gov.my)
Malaysian Investment Development Authority (http://www.mida.gov.my)
The Phillippines Export Confederation
Indonesia (Ministry of Industry)
Hochiminh City Electrical Cables Association(HECA)
Viet Nam Electrotechnical Industry Association (Velina)
Saigon Hi-tech Park (SHTP)
Food and Agricultural Association of UN (FAO)
Vietnam Food Association (VFA)
Ministry of Agriculture report.
Vietnam Institute of Agriculture Engineering and Post Harvest Technology
(VIAEP)
Vietnam Fruit Association
Vietnam Plastic and Packaging Association
US Energy Information Administration statistics
Petro Vietnam Corporation
MARD in collaboration with the National Assembly Economic Committee
and the Vietnam Farmers' Association.
Eurostat
Executive summary
This market analysis provides an in-depth understanding of the current
development of promising sectors in Vietnam and an analysis of the
prospects for cooperation with Dutch industries. Methods of analysis
include desk research, quantitative and qualitative analyses. All
quantitative analysis can be found in the annexes.
The analysis identifies potential opportunities for Dutch companies to
cooperate with Vietnamese companies in the sectors below:
A.
Import direction from the Netherlands

Electronic manufacturing/assembly: Importing opportunities in low
technology value but highly skilled and labour intensive products
such as electronic circuits, cell phones, automotive electronic parts,
chips, semiconductors, resistors and sensors.
There are also opportunities for Dutch companies to invest in
manufacturing companies in electronic parts or components or
consumer electronic products in Vietnam. There are very good
incentives from government for companies with foreign investment
in Vietnam, and there is also a large domestic consumer market for
electronic products.
There are also opportunities for Dutch companies to supply
technologies and material supporting the electronic manufacturing
sector as electronic manufacturing is a priority sector and there will
be substantial development of the electronic manufacturing sector
in the Vietnamese economy in the coming years.
One further opportunity is for Dutch companies to export high
technology consumer electronic products such as smartphones and
laptops to the Vietnamese market as this constitutes a large
consumer market for electronic products.
Electrical wires and cables, electrical equipment: Importing

opportunities in relation to wires and cables (low to high voltage,
wire harness), electrical panels and boxes, transformers, low/high
voltage panels, wire harnesses etc.
Dutch companies can also find opportunities to supply equipment
and technologies in renewable energy and clean power production
to Vietnam due to increasing demand and expanding
manufacturing. Vietnam is a potential market for manufacturers of
electrical equipment, renewable energy equipment and clean power
production equipment.
Mould manufacturing: Importing opportunities in different kinds of

moulding, such as plastic injection moulds, press dies, stamping,
die casting moulds, rubber moulds, metal moulds, jigs and fixtures.
B.
Export direction to Netherlands

Agricultural equipment/machinery: Exporting opportunities in
Vietnam concern small agricultural equipment/machinery and,
post-harvest equipment
Agro food processing machinery and packaging machinery:
Exporting opportunities in small volume equipment targeting the
large SME population, specifically packaging equipment to produce
plastic packages, storage technologies to store fresh fruit,
specialised fruit transport vehicles to reduce post-harvest loss,
seafood processing equipment, equipment suitable for soft drink
production.
Horticulture: Exporting opportunities in irrigation systems, fertiliser
dosing systems, specialised tools for fruit harvest
Oil and gas equipment : Exporting opportunities in oil and gas
equipment (not only turbines), accessories, chemical and services
for the upstream, midstream and downstream segments
Equipment and machinery for the manufacture of means of
transport: There is no direct opportunity for Dutch companies to
supply equipment and machinery to the industry manufacturing
means of transport. However, there are opportunities for Dutch
companies to supply equipment, technologies and materials to
industries supporting the means of transport manufacturing sector.
From the findings, there are recommendations for the next steps for CBI,
FME, Metaalunie, Agentschap NL and the Dutch Embassy in Vietnam in
terms of supporting Dutch companies. In each promising sector, the next
step recommendation may vary, as each sector has different, suitable,
effective activities. Next step is as follows:
Promising sectors
Next step recommendation for

support organisations
A. Import direction to the

Netherlands
Electronic
manufacturing/assembly:
Mission of Dutch importing

companies to visit Nepcon
Vietnam 2014 Exhibition on
Manufacturing & Testing
Technologies and
Supporting Industries for
Electronics Manufacturing
7th Edition organised
from 9-11 October 2014 in
Ho Chi Minh City.
Mission to visit electronic
manufacturing/assembling
companies, hi-tech parks
in Vietnam.
Electrical wires and cables,

electrical equipment
Mould manufacturing
Mission of Dutch importing

companies to attend The
7th International
Electrical Technology &
Equipment Exhibition Vietnam ETE 2014 from
16-19 Jul 2014 in Ho Chi
Minh City. The exhibition
showcases Vietnamese
companies which
manufacture Electrical
Technologies & Equipment,
Lights & Lighting Systems
and Complete Equipment
Contractors
The mission also includes
business tours, meetings
and working programmes
at electrical equipment
manufacturing factories,
projects and power plants
in southern Vietnam
Mission of Dutch
companies to attend
Vietnam Manufacturing
Expo 2014 the most
comprehensive Machinery
and Technology event in
manufacturing and
supporting industry from
27-29 August 2014 in
Hanoi. The exhibition
gathers together a large
number of Vietnamese
companies in the
supporting industries in
order to showcase their
manufacturing capacity
and look for customers.
Dutch commercial
buyers/sellers mission:
The mission programme is
for each Dutch company to
meet with moulding

companies which match
their technological
requirement
Seminars/training for
Vietnamese companies on
new technologies
In a long term view, in
order to help Dutch
companies cooperate with
appropriate companies
with strong labour
resources, CBI and
partnering associations
can provide supporting
programmes for
Vietnamese companies,
such as cooperation
programmes between
Dutch industries with some
key vocational schools or
universities to give short
courses on basic
techniques on machinery
application for graduates
before they get a job in
the moulding or
metalworking sectors.
B. Export direction from the

Netherlands
Small agricultural machinery/

Agro food processing
machinery and packaging
machinery/ Horticultural
equipment
Seminars on Dutch
technologies in each subsector of equipment and
technology. Seminars are
for Vietnamese distributors
and customers to
familiarise themselves with
Dutch equipment brand
names and identify
10
Oil and gas equipment
suitable technologies for

Vietnamese markets.
Seminars to be organised
together with meeting
programmes with potential
Vietnamese distributors
Mission for Dutch
companies providing agro
processing and packaging
equipment/technologies to
exhibit in Propak
Vietnam from 4-6 March
2014 Trade fairs on
post-harvest and food
technology, processing
and packaging
industries or FoodPack
Vietnam 2014 from 2628 June 2014 in Ho Chi
Minh City. The focus of
these trade fairs also
extends to all related
processing, handling and
packaging industries for
food and other sectors,
from pharmaceutical and
healthcare to chemical and
cement. Dutch companies
can exhibit and organise a
Holland Pavilion in the
trade fairs.
Mission of Dutch
equipment suppliers to
exhibit at Oil & Gas
Vietnam (OGAV) 2014 oil and gas event in
Vietnam for both upstream
and downstream oil and
gas companies and also its
supporting industries 21
23 Oct 2014 in Vung Tau
Mission of Dutch
equipment suppliers to
visit governmental officials
and key players in Oil and
gas sector.
Mission to visit potential
11
distributors in Vung Tau

(oil and gas industry
areas) and Ho Chi Minh
City.
Equipment and machinery for

the autonomous manufacture
of means of transport such
bicycles, mopeds, baby
carriages etc
Mission for Dutch

companies to attend MTA
Vietnam from 8 11
July 2014 in Ho Chi Minh
City. This is the 12th
International Precision
Engineering, Machine
Tools and Metalworking
Exhibition and Conference
In case of individual
enquiries from Dutch
companies, a tailored
meeting programme for
them with some end-users
should be effective
enough.
Next step recommendation for Dutch companies entering Vietnam:

Dutch companies wishing to have further market information on the
Metalworking industry in particular or Vietnamese market in general can
obtain support from many channels such as:
CBI, FME, Metaalunie, NL Agency and join in their trade missions to

Vietnam
Vietnam trade office under Vietnam Embassy located in The Hague,
in the Netherlands
Dutch Embassy in Hanoi and Dutch Consulate in Ho Chi Minh City,
Vietnam
Vietnam trade promotion organisations based in Vietnam, such as
the Vietnam Chamber of Commerce and Industry (VCCI),
Investment and Trade Promotion Center of Ho Chi Minh City
(ITPC), Vietnam Trade Promotion Agency (Vietrade)
Trade services and consulting companies
Trade directories and websites
Please see Annex 15 Guidance for Dutch companies for obtaining

support on the Vietnamese market, and also Annex 2 List of supporting
organisations in promising sectors.
12
Dutch companies can also refer to Annexes 3, 4, 5, 6, 8 Lists of

interviewed companies in promising sectors to look for possible
appropriate useful contacts for their business expansion to the Vietnamese
market.
13
Background and introduction to the

market analysis
1.1
Background
The metalworking industry is the biggest industry in Vietnam and

produces a large variety of goods from car to electronic parts, for all
sectors, from shipbuilding to the aviation industry. Metalworking
generates a significant proportion of the annual revenue in Europe. The
international trade in the metalworking industry is substantial because of
the high value of the products. The global trends of international trade in
the metalworking industry have strongly increased in the last 10 years
and are not limited to territories or geographical locations. Besides, many
European companies in the metalworking industry also invest overseas
and explore the comparative advantages of other markets in other
regions.
The Dutch economy plays a significant role in the European economies
and is the fifth largest in the area. Key industries in the Netherlands
include metal and engineering products, electrical machinery and
equipment, chemicals, petroleum, construction, microelectronics and
fishing. The metalworking industry is considered to be an industry with
intensive research capacity. The Dutch metalworking industry is very
strong in terms of making machinery with advanced electronic control
systems. It makes the Netherlands a world leader in the manufacture of
vehicles, food processing equipment and machinery for the chemical
industry; the country also has a substantial electronics industry.
Vietnam is situated in Southeast Asia, a high growth engine in the world
economy. The region encompasses booming economies and there is
sustainable and integrated development of all countries in the area.
Vietnam, with its strong economic growth and openness to the global
economy, has revealed much potential for development and cooperation
with international markets in terms of trading, outsourcing and
investment. This will provide benefits for all of the parties concerned.
Growth industries include oil and gas, agriculture, tourism, mechanics,
textiles, etc.
The CBI is the Centre for Promotion of Imports from developing countries.
Following a CBI mission, CBI Market Intelligence is cooperating with FME,
Metaalunie, Agentschap NL and the Dutch Embassy in Vietnam to perform
a Market Analysis on Metalworking/Metal parts and components in
Vietnam.
The interest from Dutch companies in the Vietnamese market is diversified
hence the market analysis should take the different perspectives of the
involved organisations into consideration:
Imports from Vietnam to the European market
14
Exports to the Netherlands (Dutch SMEs) to the Vietnamese market

Vietnam as a potential outsourcing market for Dutch companies
Vietnam with potential opportunities for collaboration or investment
The first step of this market analysis has been carried out. The analysis in
the first step was to identify the most promising sectors for import/export
from/to Netherlands and for outsourcing/investment from Netherlands
(see Annex 9 Analysis 1). The result achieved from the first step is to
specify the focus of the market analysis in this step. The focus areas for
this analysis include the following promising sectors:
A.
B.
1.2
Import direction from the Netherlands

Electronic manufacturing/assembly.
Electrical wires and cables, electrical equipment such as low/high
voltage panels, transformers, etc.
Mould manufacturing, moulding products.
Export direction from the Netherlands
Small agricultural machinery (agro sector, food processing
machinery, packaging machinery, and horticulture)
Turbines for wind energy (but only offshore oil, gas, wind etc.)
Equipment and machinery for the autonomous manufacture of
means of transport such as bicycles, mopeds, baby carriages etc.
Objectives
The target group for this market analysis is CBI, FME, Metaalunie,
Agentschap NL and the Dutch Embassy in Vietnam.
The market analysis provides an in-depth understanding of the promising
sectors for Dutch industries in order to identify potential areas for
partnering with Vietnamese industries in importing, exporting and
outsourcing. Through studies in different methodologies and from different
views, Dutch companies can set appropriate strategies for optimised
cooperation results and position Vietnam in relation to other regional
countries. Dutch companies are well equipped with insights into the
markets, potential partners and tips for ensuring success when doing
business within the Vietnamese market.
This analysis will give a full understanding about Vietnamese and Dutch
companies on their expansion plans to new markets and indicate what
support they need. It will help set the direction for the CBI and partners in
terms of providing the best services to these targeted sectors and
companies.
1.3
Approach and Methodology
Research methodology is a mix of 5 analyses and different methods (see

Annex 10 Methodologies). A diversified methodology can help verify the
15
results from different analyses and provide customers with the most
accurate results.
Analysis 1: Analysis to identify the most promising sectors for

trading from Vietnam to the Netherlands and for outsourcing
partnering/investment from Netherlands
Analysis 2: Analysis of the expansion plans of Dutch SMEs in the
metalworking industry in the next 3-5 years,, the significant factors
they consider when expanding and what support they need
Analysis 3: Analysis of Vietnamese trading/manufacturing
companies in the metalworking industry on their expansion plans
for overseas markets/European markets in next 3-5 years, the
significant factors they consider when expanding and what support
they need
Analysis 4: General study of legal regime which regulates
Metalworking Industry and industry overviews in relation to export
and outsourcing in those markets including Singapore, Malaysia,
Thailand, Indonesia, Philippines
Analysis 5: Market Analysis Metalworking/Metal parts and
components
in
Vietnam
Vietnamese economy overview
2.1
Historical overview:
Vietnam is a developing country and is considered to be an agricultural

country, with 70% of the population living in rural areas and earning their
living from the agriculture industry. After the reunification of the country
after the wars in 1975, Vietnam started to move towards the
industrialisation of the country with a focus on heavy industry. This
direction was very focused during the 1980s but was not very effective
because the foundation of agriculture, light industry and the service
sectors were not well established. This led to imbalances in the economy.
During a long period from 1975-1994, Vietnam had a closed economy with
very limited trade and communication with the world economy. It meant
Vietnam did not have the opportunity to access global technologies and
develop further.
In 1994, the US lifted its embargo; this is considered to be a turning point
for Vietnam in terms of joining in the world economy. Vietnam started to
actively carry out gradual domestic reforms and facilitate international
economic integration. Vietnam signed bilateral trade agreements with
some international trade organisations, joining ASEAN in 1995, WTO in
2007 and opening up to the global economy.
The 8th Party Congress in 1996 defined the goals of industrialisation and
modernisation for Vietnam until 2020, including selecting and focusing on
the key industries which require advanced skills and technology but not
16
much capital. Some of the industries are agriculture, food processing,

consumer goods, the electronics industry, information technology,
tourism, extraction and production of oil and gas. All the sectors are
encouraged to develop the capacity for exporting.
The legal system governing economic development and international
economic integration has been highly reformed and improved since 1986;
the Law on Foreign Investment was introduced in 1988. After the
implementation of the new Constitution (1992), a number of important
legal documents were enacted including the Labour Code (1995), Civil Law
(1996), Cooperative Law (1996), State Budget Law (1996), State Bank
Law (1997), Credits Organisation Law (1997), Trade Law (2005),
Enterprise Law (2005), and Investment Law (2005). In recent years,
many legal guidelines from government have been revised; this has made
the business environment more favourable to local businesses and foreign
investors or trading partners.
2.2
Vietnamese country data and economy

overview:
Over the last 20 years Vietnam has achieved significant development.

Together with other countries in Southeast Asia, the high growth engine of
the world economy, Vietnam has strong growth in different aspects of the
economy and has promising prospects in terms of sustainable and
integrated development within the global economy.
GDP growth: Vietnam became one of the fastest growing economies in
the world with a high and stable annual GDP growth rate.
17
Figure 1: Vietnam Gross Domestic Product from 1996-2012, 2013

estimates
Vietnam GDP (billion EUR)

120
100
80
60
Vietnam GDP (billion EUR)
40
20
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013 (est)
Source: Trading Economy Statistic, World Bank
The total export turnover of Vietnam has been undergoing rapid growth
in recent years. The export turnover of goods increased from EUR 10.95
billion in 2001 to over EUR 83.22 billion in 2012, included in the top five
largest exporters in ASEAN region in 2012. Vietnam's main exports
include: crude oil, textiles and garments, rice, coffee, rubber, coal,
aquaculture, processed forest products, agriculture, forestry and fisheries.
The number of countries and territories that import Vietnamese goods has
increased rapidly in the last ten years and includes more than 100
territories so far.
Total import turnover was EUR 11.83 billion in 2001, this increased
gradually to EUR 83.07 billion in 2012. Vietnams key import commodities
include: petroleum products, iron and steel, fertiliser and chemicals,
electronics, cars, medicine, machinery and equipment.
Vietnamese balance of trade returned to a surplus of EUR 569.40
million in 2012, the first time after 19 years of trade deficit. The country
forecasts that a trade deficit will likely re-emerge as the economy recovers
and in the investment period for growth so imports (in support of
production) will increase. But the magnitude of this gap will not be
sufficient to cause a disturbance in exchange rates. See more Annex 12
Trading between the Netherlands and Vietnam - first 6 months of 2013.
18
Figure 2: Vietnam import-export total value and trade balance, 2001-2012
Vietnam import-export total value

and trade balance, 2001 - 2012
Vietnam Import Revenue (billion EUR)
Vietnam Export Revenue (billion EUR)
Vietnam Trade Balance (billion EUR)
100
80
60
40
20
0
-20
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Vietnam Customs Statistics
Foreign direct investment has drastically increased. These capital

sources have made a huge contribution to the development of the
economy, the improvement of living standards and increased investment
among citizens. Some of the key investors include Singapore, Taiwan,
Korea, Japan, the US, and British Virgin Islands. The phenomenal increase
of FDI in 2008 was apparently a reflection of Vietnams accession to WTO.
Figure 3: Vietnam Foreign Direct Investment 1993-2012
Vietnam Foreign Direct Investment

Total registered capital (million EUR)
Implementation capital (million EUR)
60,000.00
50,000.00
40,000.00
30,000.00
20,000.00
10,000.00
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0.00
Source: Ministry of Planning and Investment
See Annex 14 Doing business in Vietnam for more information on how to

invest/open representative offices/expand into to the Vietnamese market,
legal entities, basic tax system, business tips
19
Labour force: Vietnam possesses a strong labour force as Vietnam has a

growing and young population. It has a so-called golden labour structure
where the percentage of the population at working age is higher than the
percentage of dependents and more than 50% of population is aged
between 15 and 35 years old.
One big comparative advantage of Vietnam is its cheap labour force.
Compared to the minimum wages of manufacturing industries in other
regional countries, Vietnam has very low labour costs.
Table 1: Minimum wages 2013
Country
Indonesia
Malaysia
Minimum
151.84
192.72
wages
2013 (EUR
monthly)
Philippines
167.90
Thailand
160.60
Vietnam
91.25
Sources: Labour Ministries of each country in the graph
Vietnamese industrial competitiveness: According to Regional

industrial competitiveness in East Asia and the Pacific and world ranking
Comparison 2012-2013 carried out by UNIDO, Vietnam is positioned 54th
on the world and 12th in the region in term of industrial manufacturing
development. The rankings are based on different factors: industrial
manufacturing technologies, capital and industrial export.
Table 2: Regional industrial competitiveness in East Asia and the Pacific
and world ranking Comparison 2012-2013
CIP
Regional
World
ranking
Country
CIP
Regional
World
ranking
Country
Japan
10
44
Philippines
Republic of
Korea
11
48
New
Zealand
China,
Taiwan
Province
12
54
Vietnam
Singapore
13
67
China,
Hong Kong
SAR
China
14
90
Cambodia
21
Malaysia
15
105
Fiji
23
Thailand
16
109
Mongolia
20
28
Australia
38
Indonesia
17
112
China,
Macao SAR
Source: Regional industrial competitiveness in East Asia and the Pacific and world
ranking Comparison 2012-2013 carried out by UNIDO
Vietnamese infrastructure: Vietnam's infrastructure development is in

the lowest group compared with other countries like China, Malaysia, the
Philippines, Thailand and Singapore. All of the infrastructure sectors in
Vietnam such as roads, railways, telecommunications, water, and
electricity supply are monopolised by the government. The governments
subsidies and lack of competitive pressure have slowed down the
development of the infrastructure.
In recent years, the government has put a great deal of effort into
developing infrastructure. This has included building industrial parks and
industrial zones in Vietnam to push manufacturing and draw foreign
investment. The government has also invested heavily in upgrading
physical infrastructure. Many world-class industrial zones have been built
up, however the infrastructure outside the Industrial Zones (IZs) remains
far from adequate.
Vietnamese supporting industries: In general, among Asian countries
such as China, Malaysia, the Philippines, Thailand, Indonesia and Vietnam,
supporting industries are rather young. Recently, some FDI enterprises
have emerged within the supporting sector; these are expected to change
the situation however, the effects are still limited.
Vietnamese geography: Vietnam is located in the south east of the
Indochina peninsula, belonging to South East Asia. It lies on the boundary
of two continents Europe-Asia and Oceania, and between the Pacific Ocean
and Indian Ocean. Vietnam is on the bustling West-East road and in the
middle of the sea-line connecting Hong Kong and Singapore, enabling the
construction of world-class deep-water ports and a centre for transaction
with national and international stature. The favourable location enables
Vietnam to reach trade centres more easily and is convenient in terms of
almost all ASEAN capitals such as Singapore, Kuala Lumpur, Bangkok,
Manila as well as Hong Kong and Taiwan. This is a big advantage for
Vietnam as a bridge to other nations in the region in transportation and
trading.
2.3
Overview of industry per region
Based on the Industrial Plan to 2020, the Vietnamese government is

aiming to map 6 industrial regions as follows:
Region I Northern Midlands and mountainous region:

hydropower, agro-processing, mineral processing, chemical,
21
fertilisers,
metallurgy,
construction
materials,
mechanical
engineering for agro-industry.
Region II Red river delta regions and Northern key
economic region: mechanical engineering (ship building,
electric
equipment,
transport
equipment),
thermal-power,
electronics and ICT, chemical, metallurgy, mineral processing,
construction materials, apparel, leather and footwear, agroprocessing.
Region III Central Coastal regions and Central key
economic
region: agro-processing, petrochemical, ship
building, mechanical engineering industry, machine tool,
construction materials, apparel, leather and footwear, electronics
and ICT industries
Region IV Central highlands region: hydropower, agroprocessing, mineral processing industries.
Region V Southern region and Southern key economic
region: petrochemical, power, agro processing, mechanical
engineering,
electronics,
software,
chemical
and
pharmaceutical, apparel, leather and footwear industries
Region VI Mekong river delta region: agro-processing,
natural gas utilised, engineering for agro-industry, ship building
industries
22
Map 1: Sector regional map
Source: Industrial Areas Plan to 2020
Although there is an Industrial Plan that runs until 2020 and which maps
the sectors with regions, each provincial government may have their own
strategies and incentives to draw investment to their provinces. So in
some sectors, manufacturing companies may not locate in line with the
Industrial Plan to 2020.
23
A.
Promising sectors for import from and

outsourcing services from Netherlands
Government policies: The metalworking industry includes sectors within

which primary manufacturing operations involve fabricating or assembling
metal parts; this is generally known as the Mechanical industry in
Vietnam. The Vietnamese government realised the importance of the
mechanical industry in terms of the industrialisation and modernisation of
the country soon after reunification. Until the mid-1990s, in the first stage
of openness to the global economy and in the light of reform and
integration, the government announced many open policies, setting a
strong direction and stimulating the development of Vietnamese
industries. The two most important decisions were Decree No. 186 in
2002 Approving the Strategy on Development of Vietnam Mechanical
Engineering Industry until 2010, with a vision to 2020, and Decree 10 in
2009 - Providing for the mechanism of support for the manufacture of key
mechanical products and the list of investment projects to manufacture
key mechanical products during 2009 and2015. The two Decrees
correspond to incentives and support from the government for the
Vietnamese mechanical industry, including many sub-sectors.
The government encourages the development of mechanical engineering
supporting agriculture, forestry, fishery and processing, ship-building
industries, automobile engineering - communications and transport
engineering, manufacturing machine tools, complete equipment, metal
structures for big construction and industrial projects, etc. Specifically, in
the sectors below:
Supporting industries: The government realised the importance

and started to prioritise the development of supporting industries in
general and moulding, forging and creation of large casts in
particular, in order to synchronise equipment and technologies and
meet the demand for manufacture of large and sophisticated work
pieces and assemblies.
Electric-electronic
technical
equipment:
The
government
encourages building a modern electric equipment manufacturing
industry reaching the advanced level in the region in electric
equipment and materials by 2020. The sector should meet the
domestic demand, reduce imported equipment and export to
regional and world markets.
Some of the focused sectors above, such as shipbuilding, automobile and

transport engineering, electric equipment, electronic outsourcing,
moulding, casting and forging manufacturing, have achieved relatively
good development.
Comparison to regional countries
24
The overview of the world electronics industry shows that Asian countries
(especially South East Asian countries) have great potential in the
development of the electronics industry. They are the biggest producers.
Their strengths are producing electronics components and consumer
products. The rapid development of these nations in consumer electronics
and semiconductor electronics is a good example for the future of the
Vietnamese electronics industry.
Singapore: Singapore has the most developed E&E industry in ASEAN. In
2012, manufacturing output in the electronics sector reached EUR 57.01
billion, contributing 25% to Singapores manufacturing. Singapores
electronics industry has 14 silicon wafer fabrication plants, 20 assembly
and test operations, 15 of the world's top 25 fabless semiconductor
companies and 40 IC design centres in Singapore. This includes four 12inch fabrication plants, the worlds top three wafer foundry
companies, three of the worlds top five assemblies and test subcontractor
companies, and nine of the worlds top 10 fabless IC design companies.
The current position of Singapore in the world E&E industry is undeniable.
It is because Singapore provides a perfect business environment with
clear intellectual property rights laws and a full suite of activities to meet
business requirements from R&D to development, manufacturing, supply
chain and logistics management, human resources development, etc.
Thailand: The electric and electronics industry in Thailand started in the
1960s and developed rather fast. Electronics is also one of Thailands key
manufacturing sectors. Now, Thailand is the biggest ICT and consumer
electronics manufacturing country in ASEAN and is now the leader in air
conditioners, refrigerators, printers and PC manufacturing in South East
Asia. Thailand is the No. 1 HDD and components manufacturing base,
producing 1.4million units annually, accounting for a 40%-45% share of
worldwide HDD production with an export value of EUR 14.60 billion.
The key factors which have led to Thailands development in these sectors
include excellent supporting industries and effective support from
government policies.
Malaysia: Malaysia has transformed itself since the 1970s from a producer
of raw materials into an emerging high technology, knowledge-based and
capital intensive manufacturing industry. The Malaysian manufacturing
industry now considers the electrical & electronic (E&E) to be the
industrys leading sector. Malaysia is currently the worlds leading
location for semi-conductor assembly and test operations.
Malaysias success can be attributed to a successful combination of
factors: a stable government, good economic policies, good infrastructure
and a skilled workforce.
25
The Philippines: The Philippine electric & electronics (E&E) industry began
in the mid-seventies. After nearly 40 years of development, the E&E
industry in the Philippines expanded its production in key segments such
as: semiconductors and integrated circuits, electronic data processing
equipment,
office
equipment,
telecommunications
equipment,
communications and radar, control and instrumentation, medical and
industrial, consumer electronics, solar/photovoltaic. In the semi-conductor
segment, the Philippines supplies 50% of the worlds demand for 2.5
HDD and 10% of world demand for 3.5 HDD.
The Philippines possesses competitive advantages to develop the E&E
industry: relatively competitive labour costs and the availability of
technical labour. The government provides very active support through
relevant investment policies with the Investment Priorities Plan.
Indonesia: The Indonesian electric and electronics industry started in the
early 1980s and significant foreign direct investment in the electronics
industry has been accepted by Indonesia since the 1990s. Indonesia's
export opportunities in electronic products were strongly influenced by the
rapid growth and trends of component outsourcing in the world E&E
industry especially in the segment of labour-intensive manufacturing.
Indonesia is currently facing some obstacles in their electronic
manufacturing sector development in government policies.
In Part A of this market analysis, the study will be focusing on the
promising sectors identified in the first stage:
Electronics manufacturing
Electrical equipment
Supporting industry (focusing on moulding)
26
Electronic manufacturing/assembly
sector
3.1
Overview of Vietnams electronics

manufacturing sector
The electronics industry today plays a vital and dynamic role in the
Vietnamese economy. The electronics industry has grown substantially
over the past decades with increased access to innovative technologies,
opportunities to function as outsourcing partners to hi-technology
corporations and rising customer demand for electronic goods and
services.
The sector includes many sub-sectors such as manufacturing of electronic
and mechanical electronic materials, components and parts, and
equipment. The manufacturing process consists of designing overall
equipment, designing electronic circuits, manufacturing components and
the assembly process (which plays a very important part of the whole
process). There are three types of assembly line: manual, semi-automatic
and fully-automated and three main levels of kit to assemble products
(knock down kit):
Semi knock down (SKD)

Complex knock down (CKD)
In-complex knock down (IKD)
This is also an extremely diversified sector with the participation of

manufacturers, suppliers, dealers, retailers, electrical engineers,
electricians, electronic equipment manufacturers, and trade unions.
The electronics industry is highly fragmented, comprising of key
segments:
Consumer electronics appliances: main products are audio

equipment, television sets, MP3 players, video recorders, DVD
players, digital cameras, camcorders, personal computers, video
game consoles, telephones and mobile phones.
Industrial electronics:
Information
technology
equipment
(computer
and
office
equipment)
Telecommunications equipment
Electronic components
Although the electronics industry has emerged very recently compared to

other traditional industries in Vietnam, it has achieved vigorous
development, especially in the past 20 years. The growth of the
electronics industry has been governed by some key descriptions and
27
trends:
3.1.1
Under pressure to develop new and innovative products in shorter

cycles, at lower costs, and with higher quality, big corporations in
the electronics industry are tending to move their manufacturing
bases and outsource/off-shore or transfer lower level assembling
technology to low-cost destinations, such as the Asia Pacific
countries in general and Vietnam in particular as it has a cheap,
abundant and skilled labour force.
The Asia Pacific region is emerging as one of the most attractive
areas for the development of such manufacturing bases. This is
also a very large consumer market for this industry.
This industry is therefore highly fragmented, comprising large
international companies and many small and medium-sized
enterprises.
The rapid pace of innovation in electronics technology and rising
incomes/living standards are resulting in a consistent demand from
Vietnamese consumers for newer and faster products and
applications.
As the technology and products are changed and updated very
quickly so their life cycles are short.
Government policies
See more in Annex 11- Regulations governing promising sectors

Besides the two Decrees 186 and 10, specifically for the electronics
industry, the government was also focusing on the development of
electronics industry with the Decree 75 in 2007 Approving the master
plan on development of Vietnams electronics industry up to 2012, with a
vision towards 2020. The objectives of the master plan include increasing
production turnover of EUR 2.92-4.38 billion and an export turnover of
EUR 2.19-3.65 billion, creating 300,000 jobs, and growing at an annual
rate of between 20% and 30%. The Decree has highlighted several
important areas in relation to implementing the Decree, such as
investment into research and development for the industry, calls for
foreign investment with technology transfer into the industry, human
resources development, tax regimes and the creation of IT and electronics
parks.
In 2010, the government also passed Decree 1755 Approving the
scheme to make Vietnam a country strong in Information and
Communication Technology. The Decrees objectives include the
development of Vietnamese ICT to supply the local market with integrated
circuits, software and digital content processing services, etc. The
important areas for implementing the Decree objectives include: taxation,
land policy for ICT projects and capital sources allocation.
28
In addition, there was Decree 698 in 2009 Approving the overall plan
on development of information technology human resources up to 2015
and orientation towards 2020. There are many plans to develop human
resources, including initiatives on research centres, high-tech parks and
human resources development joint programmes with developed
countries.
Many decisions and policies from the government have indicated that the
government understands the importance of the electronics industry in
economic development. The electronics industry has since undergone
restructuring and witnessed rapid development rates.
3.1.2
Manufacturing, Export, Domestic market, and

Foreign Direct Investment in the electronic sector
Manufacturing: In the 1990s, the number of electronic companies was

under 100 but this number increased to more than 500 enterprises by the
end of 2012, employing 200,000 people and generating 15-20% average
growth rate annually. Electronic manufacturing has increased steadily over
the years and is forecast to achieve strong growth in the future.
Figure 4: Manufacture of computer, electronic and optical products in
Vietnam (2005-2012)
Manufacture of computer, electronic and optical

products (EUR)
Manufacture of computer, electronic and optical products (EUR)
Billions
Linear (Manufacture of computer, electronic and optical products (EUR))

18.00
15.28
16.00
14.00
11.33
12.00
10.00
8.00
6.00
4.00
2.39
2.96
2005
2006
4.12
4.80
5.78
7.12
2.00
0.00
2007
2008
2009
2010
2011
2012
Sources: Vietnam Electronic Industry Association (VEIA)
Although there is stable development of electronic manufacturing, the

number of assembling companies supplying to international EMSs
(Electronic manufacturing services) or ODMs (Original Design
Manufacturers) accounts for nearly 90%, leaving a very small proportion
of companies which are local ODMs, designing and manufacturing their
own products for their brand names. Many ODM companies involve foreign
investments or are joint ventures (around 80%), indicating that Vietnams
capacity to design and market its own electronics products is quite limited.
There are only a few Vietnamese brand names (mainly in consumer or ICT
electronics) such as Hanel (brand name for TV), BTV, DENCO, CMS
29
Computers, FPT, Tien Dat amplifiers, recorders and karaoke machines,

with very limited market shares. Meanwhile many big consumer
electronics OEM brand names such as Sanyo, Toshiba, Hitachi, Sony, JVC,
LG, etc have entered and dominated the Vietnamese domestic market.
Among the large domestic electronics firms, many are still (partially)
state-owned (e.g. Hanel), however many of the companies, e.g. the FPT
Corporation, are moving towards privatisation.
Of the companies in the electronics industry which are involved in
assembling and supplying to EMSs or ODMs, 90% are Vietnamese or
companies with foreign investment. The starting point of the Vietnamese
electronics industry was the assembly process for the consumer
electronics sector, mainly in SKD, CKD and IKD. Over many years,
Vietnam has been expanding to the assembly process in industrial
electronics, information technology equipment and electronics components
for export.
Foreign direct investment: One-third of total electronic companies
involve foreign investments. Investment capital attracted in this industry
ranges from hundreds of millions to billions of US$. The strong foreign
investment in electronics is partially due to the reduction of the electronics
tariffs plan to 0-5% from 15-20%, following the commitment with the
ASEAN Free Trade Area (AFTA). This is evidenced in Vietnams
accelerating trade liberalisation and integration into the world economy.
This is one advantage for foreign companies and also for Dutch
companies when planning to invest in electronic manufacturing in
the Vietnamese market.
Although foreign invested companies account for only one-third of the
total number of companies in the industry, they possess a wealth of high
technologies and are the growth driver of the Vietnamese electronics
industry, making up 90% of the domestic shares and over 90% of the
export turnover of the industry.
Vietnamese electronics companies have exported complete products and
parts/components to more than 50 countries and territories. The export
turnover has rocketed by 20 times within the past 10 years. In 1996, it
was valued at EUR 65.70 million. In 2006, the turnover was EUR 1.29
billion. Since 2005, electronics has always been in top 10 industries in
export value from Vietnam with over 1 billion in export turnover. In the
past 4 years, export turnover has shown a continual increase with EUR
14.97 billion in 2012. Major export items are electronic and computer
components, printing machines, cell phones and integrated circuits. The
government has set a target to earn EUR 29.20 billion from electronics
exports by 2017 and this objective is considered achievable due to current
investment in the industry.
30
Figure 5: Vietnamese Electronic Export Turnover (2009 2012)
Vietnamese Electronic Export Turnover (EUR)

Vietnam Electronic Export Turnover (EUR)
Billions
Linear (Vietnam Electronic Export Turnover (EUR))

20.00
18.00
14.97
16.00
14.00
12.00
10.00
8.03
8.00
6.00
4.00
2.04
2.59
2009
2010
2.00
0.00
2011
2012
Source: General Department of Vietnam Custom (Vietnam Custom)
Although manufacturing and export figures have been very positive in

recent years and strong growth is forecast for coming years, Vietnam's
electronics industry is facing a big challenge to its development. The
sector's export value is high, however 90% is generated by the foreign
direct investment (FDI) sector and only the remaining 10% by domestic
companies. For example: Samsungs Vietnamese export value in 2012
doubled to EUR 9.27 billion, Intel exports amount to EUR 0.73 billion
yearly. Vietnamese local electronic companies play a negligible role and
there is a big technology hiatus between local and FDI firms. Local firms
work mainly in the assembly process of low-technology products, they are
weak in terms of technology, and research and development, have limited
capital and receive very little support from the government. To increase
the competitiveness of local electronic companies, Vietnam requires efforts
to be made by the industry itself. It needs assistance in the form of
government policies; international support in market expansion, human
resource training and increasing competitiveness; and cooperation in
terms of developing the support industries and participating in the global
value chain.
The Vietnamese electronics industry is facing a very imbalanced product
structure between consumer electronics (70%) and specialised electronics
(30%).
Moreover, there is a big gap between assembling and
manufacturing components, parts (80:20). Localisation only achieves 2030%.
Trading with the Netherlands in E&E (Electronic and Electrical
industry): The Netherlands mainly imports electronic and electrical parts
and components such as electronic printed circuits, electric
motors/generators. Imports from Vietnam into the Netherlands have
31
increased significantly over the last 3 years. Meanwhile Dutch exports

mainly concern equipment or complete consumer electronic products.
Figure 6: Trading in the E&E industry between the Netherlands and
Vietnam (US$) from 2010-2012
Trading in Electrical and Electronic

industry between the Netherlands and
Vietnam (EUR)
Import from Vietnam to Netherlands in Electronics and parts and components
Thousands
Export from Netherlands to Vietnam in Electronics and Electrical equipment
500,000.00
400,000.00
300,000.00
200,000.00
100,000.00
0.00
2010
2011
2012
Source: European Commission Export Help Desk
In terms of the domestic market demand, Vietnam's consumer

electronics industry has grown substantially and strongly over the past
few years. It accounts for a significant proportion and was worth about
EUR 3.80 billion in 2012. It is forecast to increase at an overall compound
annual growth rate (CAGR) of 14% through to 2016 and expected to
reach EUR 6.50 billion by 2016. Key products for this market are
computing devices, mobile handsets and video, audio and gaming
products, etc. Specific growth areas include smartphones and flat screen
TV sets (comprising more than two-thirds of TV set sales); these are
expected to provide the most dynamic development. Smartphone sales
were EUR 1.46 billion in 2012 and are expected to reach EUR 1.83 billion
by the end of 2013. Computer hardware sales were EUR 1.31 billion in
2012 and are expected to reach EUR 1.53 billion by the end of 2013.
Audio visual sales were EUR 1.02 billion in 2012 and are expected to reach
EUR 1.17 billion by the end of 2013. The high domestic demand
represents a huge opportunity for foreign companies in general
and Dutch companies in particular to invest in electronic
manufacturing in Vietnam as investors have a large domestic
market for their products. Dutch companies could also find export
opportunities to the Vietnamese market with high tech consumer
electronics. Moreover, Dutch companies can supply technologies
and materials to the Vietnamese electronics sector.
32
The country's vast, under penetrated rural market offers much growth
potential, with Hanoi and Ho Chi Minh City accounting for most
sales. However, the Vietnamese electronics industry is still in its infancy,
hence the dependence on imports and products of foreign firms in the
market. These firms account for a significant proportion of 80% of the
market.
According to the Industrial Areas Plan to 2020 (see Map 1, section 2.3),
the electronics industry is theoretically located in regions II, III and V in
which two evolving electronics clusters are located in three main growth
centres, the Ho Chi Minh City area in the South, the Hanoi area in the
North and Da Nang in Central. There are few connections between the
three geographic clusters. Ho Chi Minh City accounts for more than 50%
of electronics companies nationwide.
3.2
Value chain
In Vietnam, the electronics industrys value chain basically has two kinds
of firm, further described below. Dutch companies can cooperate with
contract manufacturers (CMs) in relation to chips, semi-conductors,
resistors, sensors, electronic circuit assembling, cell phone assembling and
automotive electronic part assembling:
Original Equipment Manufacturers (OEMs) focus on product

development, marketing and distribution; they carry brands and
sell branded products and systems in final markets to end-users.
They are also named lead firms. These firms initiate, or lead,
value chain activities by placing orders with suppliers.
Some OEMs which already have a presence in Vietnam include:
Samsung (consumer electronics), Kodak, Fujitsu, etc.
Contract manufacturers (CMs) focus on providing many of the

value chain activities that OEMs have outsourced. These activities
include manufacturing design, assembly, critical component
manufacture (e.g. semi-conductors and printed circuit board
memory) and micro-component manufacture.
The largest contract manufacturers which are involved in
production services alone (comprising component purchasing,
circuit board assembly, final assembly and testing) are Electronics
Manufacturing Service companies (EMSs).
The Contract manufacturers which handle both manufacturing and
product design services are Original Design Manufacturing (ODMs).
However, due to the complexity of many finished products that
contain multiple components, there are also specialised and more
localised contract manufacturers and suppliers which manufacture
33
or supply to CMs or EMSs or ODMs on simpler parts or assembling

processes. It means that in a supply chain for an electronic
product, there can be a large number of suppliers and
manufacturers using a variety of processes. This is where
Vietnamese electronics manufacturers have an opportunity to join
in the world value chain. This is also where Vietnamese
manufacturers in some other supporting products can join in the
value chain, e.g. plastic injection moulding for electronics. Dutch
companies can source from these Vietnamese electronic
manufacturers.
The value chain looks like a wide network with many companies acting
both as suppliers and customers to one another, depending on the
component and end product. Value chain relationships are therefore often
reciprocal rather than hierarchical.
Some electronics components can be used for different final consumer
products and the same manufacturers/suppliers can be involved in the
supply chains of many products.
34
Diagram 1: Electronic manufacturing sector value chain

Companies
Operations
R&D, design,
marketing, brand
management
Manufacturing of
Semi-conductors,
power supplies,
printed circuit
boards, hard disc
drives, optical
disc drives.
Original
equipment
Manufacturer
(OEM)
EMS/ODM
Component
supply chain
Component
supplier
Vietnamese
companies
join in value
chain as
CMs in
Inputs,
Manufacturin
g, Assembly
Function
Contract
manufacturer
(CMs).
CMs from
emerging
outsourcing
CMs
Assembly
EMS
Sub-assembly,
final assembly
Testing
CMs
Testing, logistics
Sales
EMS/ODM
Advertising, direct
sales, retail
OEM
After Sales
Manufacturing
Inputs
Design
Function
Returns, repairs,
supply chain
management
OEM
EMS
35
3.3
Internal/external factors affecting the

Vietnamese electronics manufacturing sector
3.3.1
Internal factors
a. Technology levels
According to the World Electronic Forum, the technological level of a
nation is evaluated on the basis of many elements such as total
expenditure for R&D, creativity in science, and technology, and the system
of technological development. There are 3 stages of development, from
emerging to developing electronics industries, in the world:
1st stage: assembling electronics products from imported parts

2nd stage: investing in manufacturing parts and components
3rd stage: researching and developing products, investing in high
technology, and increasing export
Vietnam is considered to be in the 1st stage and beginning to reach the 2nd
stage; Malaysia, Thailand, the Philippines and Indonesia are in the 2nd
stage, and Singapore is in the 3rd stage. This means that technology and
equipment within the Vietnamese electronics industry is 10 to 20 years
behind the other countries mentioned.
This situation is obvious as before 2000, Vietnam's economy was nearly a
closed economy. The exchange of goods and technology was very limited.
Only in the last 10 years has the technology transfer from foreign markets
increased gradually. Their technologies and facilities are 10-15 years older
than technologies in other regional countries. According to findings from
interviews with electronic manufacturing/assembling factories, they dont
purchase new technology due to limited capital, inexperience in
purchasing machines and lack of information on new technology or new
markets. They are also concerned about the return on investment and the
governments support. Therefore, currently both Vietnamese and foreign
companies consider investing in an assembly line a perfect strategy for
both sides. Foreign companies can gain benefits from Vietnamese cheap
and skilled workers and also reduce expenditure when penetrating the
local market, and Vietnamese companies dont have to invest much but
still can earn good profit from assembling activities.
There are only some names Vietnamese brand names such as Belco,
Hanel, Hoa Phat, and Tien Dat, FPT (which account for 6-8% market
shares) developing towards the direction of investing in R&D and
technology to move up to the stage of manufacturing electronic
components for exporting.
In recent years, there has been encouragement from the government
towards R&D activities in the electronics sector through many policies. The
first 3 IT high tech parks were established in the late 2000s. These include
36
Hoa Lac Hi Tech Park (Hanoi), Danang Hi Tech Park (Da Nang), Saigon Hi
Tech Park (Hochiminh City); they draw big investment in high technology
and the supporting industries. These 3 hi tech parks develop attractive
investment packages for domestic and foreign companies which invest in
high technology. They also develop R&D centres and training centres to
provide labour resources for companies in the hi-tech parks. Besides, Ho
Chi Minh City and Hanoi will be investing in 2 more software parks in the
coming years.
b. Labour force
The employees in the electronics industry total 250,000 people. The
Vietnamese labour force is plentiful, young, skilled and with high work
ethics. The wages of Vietnamese workers in the sector is around 50-60%
of wages of some regional markets such as Indonesia and the Philippines,
which are rather strong in electronics manufacturing industry. For high
level labour, the salaries in Vietnam are one-third to two-thirds compared
with other markets. Vietnams labour moreover has some strengths such
as nimbleness and good capacity for acquiring knowledge. This is highly
evaluated in terms of professional skills.
Skilled workers account for 36% of the total labour force. However, the
university system, with its 30 universities and 100 technical vocational
schools, has emerged as a major constraint. The issue is the education
system which is considered lacking training in critical reasoning, and
practical skills and only emphasising theory. These institutions are able to
supply plentiful skilled workers and engineers for the labour market.
However, this has only satisfied the demand in quantity not quality of the
Vietnamese electronics industry. Due to the old educational system, the
professional capacity and English level of these engineers and skilled
workers are rather limited. This is a challenge that all electronic
companies are facing. They have to re-train new staff upon recruiting
them.
There is a remarkable difference between employees working for domestic
enterprises and those working for FDI enterprises in professional ability as
FDI enterprises have strong resources for training. Upon recognising this
issue, the Vietnamese government has launched many programmes and
policies to improve the situation.
However, like many other policies and strategies, the direction is
absolutely correct and following the right track; the implementation of all
these policies however deliver low results or are very slow in nature.
There is a big gap between the directions/strategies and actual
implementation. The government is still slow to introduce fundamental
reforms, leaving technology students with low practical technology
knowledge. The implication is, therefore, that the Vietnamese electronics
industry still lacks sufficient high level labour for stable development.
37
c. Capital
According to the Vietnam Electronic Industry Association (VEIA), nearly
80% of domestic enterprises had investing capital under US$ one million
and although recognising their lack in technology, domestic enterprises
dont have much capital for technology upgrading and for research and
development activities. The percentage of investment in new technology is
low, approximately 0.3-0.5% of revenue. Generally, the capital of the
Vietnamese electronics industry is very small, and it leads to low
technology investment, ineffective business, limited movement into higher
value exports etc. The Vietnamese electronic companies are essentially
facing a raft of very tricky challenges.
3.3.2
External factors
a. Vietnamese global integration:

Since becoming an official member of WTO in 2007, and actively
integrating into the global economy, the Vietnamese electronics industry
has expanded significantly in relation to the international electronics
industry. This is a big opportunity for the industry to approach sources of
capital, technology, and management experience from other developed
countries. This also accelerates competition between electronics
enterprises and this is the motivation for reform in Vietnamese electronics
enterprises. However, joining the WTO has also led to several challenges
for the Vietnamese electronics industry, such as the Vietnamese
electronics industry, and even the domestic market if its productivity is
not strong enough, losing its market share. Manipulating opportunities and
advantages can create leverage to overcome challenges and create new,
greater opportunities.
b. Policies:
Vietnamese policies are not perfect but relatively certain. Vietnamese
policies and the legal framework to support the manufacturing industry
are quite good with many decisions and strategies to support the
development of local companies. However, many SMEs think those
strategies still dont offer much support for their companies. To most
companies, the supporting policies are beyond their reach and here is a
big gap between policies and actual implementation.
c. Infrastructure:
Infrastructure in Vietnam is still underdeveloped compared to the
infrastructure in other regional countries.
d. Supporting industries
The supporting industries in Vietnam are not well developed yet, the
sector is still very scattered and there is no collaboration among
supporting industry companies. This is a big weakness because in the
electronics industry, input mainly depends on supporting industries. If the
supporting industries are developed, it is a big advantage for the
electronics sector in terms of development as the manufacturing cost of
38
electronics products will be lower and delivery times will be shorter if the
input for electronics manufacturing is always available in the country. In
Vietnam, many FDI companies and Vietnamese companies in electronic
manufacturing are really in need of domestic input materials to reduce
manufacturing costs however, domestic suppliers cant satisfy the demand
of quality, price and delivery date. Vietnam can provide raw materials,
however they cannot be used in the electronic manufacturing industry as
the input materials for electronic manufacturing should be of a higher
quality and should be semi-processed. FDI companies therefore have to
buy supporting materials (semi processed materials) from Malaysia or
Thailand. This will increase their manufacturing costs in total.
3.4
SWOT Analysis of Vietnamese electronic

Strength
Weakness
S1: Labour resource is plentiful

S2: Labour cost is cheap
S3: Most Vietnamese workers are
skilful in basic technology and have
good work ethics.
S4: The policy system is fairly
certain and government's
continuous efforts to improve the
policy system will create new
opportunities for the integration of
the Vietnamese electronics industry
into the global electronics industry.
S5: The private sector is developing
very fast in quantity
S6: Vietnam has opened up to the
global economy and actively
engaged in multilateral relationships
(WTO, AFTA)
W1: The sector is in its infancy

and depends on imports
W2: Technology is hindered by a
lack of capital and R&D
development.
W3: Capital is small
W4: Vision strategy and
management level are weak
W5: High-tech labour is
insufficient because of the old
educational system
W6: Research and development
policies are weak due to the
Government's insufficient interest.
The idea that Vietnam should take
advantage of the R&D
achievements of newcomers is too
popular
W7: Supporting industries are
very young
W8: Infrastructure is not
developed especially outside IP,
IZs
W9: The policy implementation
from the government is slow and
not very effective.
W10: Unbalanced output structure
Opportunities
Threats
O1: There are more chances to

approach capital, new technology
and model management experience,
improved business environment,
T1: WTO accession increases the

pressure of competition
T2: Technology, service and
promotion policies determine the
39
expanded market, enterprise

reformation in the future if there is
an increasing trend of FDI being
poured into the sector.
O2: There are more chances to
expand into the global market by
joining the international value chain
O3: Associated trends to utilise
advantages increase
O4: Big domestic market potential
of large, young and receptive
population
O5: The government prioritises the
development of the electronics
sector.
success of competition, but

Vietnam's technology, service and
promotional policies are all weak
T3: The market is dominated by
foreign brands. This trend will
increase in 2018 when Vietnam
fully opens the market
O6: The electronics sector has

considerable potential to develop
3.5
Opportunities for Dutch companies in the

electronic manufacturing sector in Vietnam
Generally, development within the Vietnamese electronics industry is still

lagging behind compared to neighbouring, newly industrialised economies
such as Malaysia, Singapore, Thailand and the Philippines. The industry,
however, still has many advantages with cheap and skilled labour, and the
right strategies from the government in terms of catching-up with
technologies and manufacturing capacities of the more advanced
manufacturing markets, in order to grasp the opportunities and join the
global value chain. Vietnam has some comparative advantages and
disadvantages in terms of exporting, outsourcing and manufacturing in the
above sectors:
Advantages:
Cheap labour cost.
The labour force has a good working attitude and good skills.
Vietnams direction towards industrialisation and manufacturing
has achieved positive results.
Vietnam currently has the comparative advantage in manufacturing
products of labour-intensive sectors when other countries are
trying to shift to more technology-intensive sectors.
The fact that China is gradually losing its position as a
manufacturing base for many big OEMs has been advantageous for
some other markets such as Indonesia and Vietnam. Foreign
manufacturers looking for outsourcing/Import partners in low cost
countries should diversify their selection options and start
considering Vietnam as a potential manufacturing base for their
products.
40
Disadvantages:
The Vietnamese supporting industry is not well developed
compared to supporting industries in other regional countries such
as Malaysia, Thailand and Indonesia. This leads to high cost of
input (materials and parts) for manufacturers which look for
outsourcing partners in Vietnam, e.g. Japanese car manufacturers
can only outsource some parts of their cars to Vietnam, they still
have to import other parts from Malaysia with higher costs than if
they outsourced all parts and assembled in Malaysia.
Infrastructure in Vietnam is not well developed compared to
Malaysia, Singapore, Indonesia and Thailand.
Opportunities:
Although Vietnam has some disadvantages, the country still offers many
benefits to Dutch manufacturers which are looking for
importing/outsourcing partners in Vietnam in some niche markets which
are in high demand in the Netherlands. These include low technology
value but high skilled assembling, labour intensive products such as chips,
semi-conductors, resistors, sensors, electronic circuit assembling, cell
phone assembling and automotive electronic part assembling. From
Malaysia and Thailand, the Netherlands imports products of a higher
technology value such as semi-conductors, machines, electrical goods,
electronic high tech parts, and from Vietnam, the Netherlands can import
and outsource products of a slightly lower technology value. Vietnamese
electronic manufacturing/assembling companies would really like to build
cooperation with Dutch companies which require the standard level
technologies that they can offer (see Annex 3a Interview result
Electronic manufacturing companies).
Besides, Dutch companies also have opportunities to invest in the
electronic manufacturing sector as the Vietnamese government is
encouraging foreign companies to invest in high technology manufacturing
companies in Vietnam and providing incentives for investors in terms of
income taxes and equipment import taxes.
There is also an opportunity for Dutch companies to supply technologies
and material support to electronic manufacturing sector. The electronic
manufacturing is a priority sector and there will be substantial
development of electronics manufacturing in Vietnam economy in the
coming years.
One more opportunity is for Dutch companies to export high technology
consumer electronics, such as smartphones and laptops, to Vietnam as
there is a large consumer market for electronic products.
See Annex 14 Doing business in Vietnam for more information on how to
invest/open representative offices/expand into the Vietnamese market,
legal entities, basic tax system, business tips
41
3.6
Next step recommendations
Dutch companies can participate in a mission to Vietnam to meet with

electronic manufacturing/assembling companies, hi tech parks and
electronic manufacturing associations in Hanoi and Ho Chi Minh City. The
mission can be organised in one week for mission members to also visit
Nepcon Vietnam 2014 - Exhibition on Manufacturing & Testing
Technologies and Supporting Industries for Electronics Manufacturing
7th edition organised from 9-11 October 2014 in Ho Chi Minh City. The full
activity programme and tailored programmes for each mission member
will help Dutch companies identify suitable opportunities for their
companies and potential business partners.
Dutch companies can also obtain further support from other organisations
as mentioned in the Executive Summary, Annex 15 Guidance for Dutch
companies to get support on Vietnam market, and also Annex 2 List of
supporting organisations in promising sectors.
Dutch companies can also refer to Annex 3 Lists of interviewed
companies Electronics to look for possible appropriate useful contacts for
their business expansion into the Vietnamese market.
42
Electrical equipment manufacturing

sector
The promising electrical manufacturing sector in this market analysis is

the manufacture of products that generate, distribute and use electrical
power, including some sub-sectors such as electrical lighting equipment,
electric household appliances and other electrical equipment, and
components manufacturing.
4.1
Overview of the Vietnamese electrical

equipment manufacturing sector
The growth of electrical equipment sector is governed by some key

descriptions and trends:
The electrical equipment industry supplies products for a diverse
customer base in all industries and consumer markets.
Products include electrical motors, commercial and industrial
lighting fixtures, electrical power equipment.
Imported raw materials including copper, aluminium and steel, the
prices of which are influenced by the world market. Therefore,
fluctuations in world commodity prices have a big impact on local
industry's performance. Some companies with big manufacturing
capacity engage in hedging. Effective hedging strategies can bring
volatile commodity prices under control.
Business operations require high fixed costs invested in
technologies and operating capitals. Therefore many Vietnamese
companies are facing a lack of capital for their investment capital
and operating capital.
This sector is fragmented and there are a few members that lay
claim to a sizable portion of sales.
This is a global industry similar to the electronics industry.
Emerging nations have provided motivation for growth via low-cost
labour, production, operation facilities and land. Vietnam is one of
these markets.
In contrast to the electronics sector, the life cycles of electrical
equipment are long. The long lifecycles and durability are
considered to be key indicators of a good product. Therefore,
Vietnamese companies work to keep up with shrinking product life
cycles and attain standardisation to maintain cohesiveness and
save money.
Top and bottom-line trends in the industry often track the broad
economic cycle. When the economy is growing and developing, the
customers are comfortable expanding their capital budgets and
spending on electrical equipment. When the economy slowdowns,
product sales immediately decrease. Companies try to repair and
replace equipment during regular, seasonal or cyclical slack periods
or will select products with lower technologies and quality for a
lower price. The Vietnamese market is in a developing and growing
43
4.1.1
period so the domestic market is considered to have great

potential.
Operating efficiency is crucial for these companies to succeed.
Vietnamese companies are beginning to focus on efficiency and
cost-reduction methods such as Six Sigma, 5S, Lean Manufacturing
and common production platforms.
Government Policies
See Annex 11- Regulations governing promising sectors

The Vietnamese government considers the industry a very promising
export sector and has launched master plans to develop the industry.
Decree No.186 in 2002 (see in Part A.), approving the strategy on
development of Vietnams mechanical engineering industry till 2010 with a
vision towards 2020, has set the direction for the mechanical industry in
general and the electrical equipment manufacturing sector in particular.
Besides this, and specifically to regulate the sector, the government has
also implemented a master plan to develop the sector in Decree 48 in
2008 Approving the planning on Development of the Electric Equipment
Manufacturing Industry in the 2006-2015 period with a vision towards
2025 (see Annex 11- Regulations governing promising sectors).
To achieve the master plan objectives, the government is encouraging
foreign investors into the sector to develop high technology and focus on
research. Some of the key products that the Vietnamese government is
targeting for development are static electric machines, different kinds of
transformers, rotary electric machines, motors/generators for household
and industrial uses, electric wires and cables, electric instruments, electric
boxes and panels, measuring equipment, etc. The sector also has plans to
build up a system of centres for inspecting the quality of electric
equipment to national standards, ensuring conformity with international
standards. This will help the local sector meet the requirements of
international standards and expand to overseas markets.
The government is also offering many incentives to companies which
create energy-efficient products and equipment items that are used to tap
renewable energy resources as well as those which conduct research for
energy conservation purposes. Specifically, the State is creating
favourable conditions so that businesses can seek preferential loans from
development banks, the assistance fund for science and technology
development, the national fund for technological renovation, and the
national energy efficiency and conservation programme.
44
4.1.2
Manufacturing, the Domestic market, Export, and

FDI
Manufacturing: Vietnam forecasts a bright future for electric equipment

sector. The industry has achieved significant success, with an increasing
number of companies capable of manufacturing electric motors, low and
medium-voltage instruments, and insulation porcelain and wire harnesses.
Manufacturing has steadily increased in the last 10 years with a wide
range of products supplied domestically and exported. The average growth
rate of the industry is around 15% in recent years and targeted to
accelerate to 18% in the next five years.
Research on product and technology improvement receives continuous
financial support from companies. For example the Power Engineering
Joint Stock Company (PEC) under the Electricity of Vietnam Group (EVN)
has built new factories and purchased modern equipment items such as a
distribution transformer assembly line and the CNC automatic corrugated
iron cutting machine; the Electrical Equipment Joint Stock Company
(THIBIDI) has successfully manufactured epoxy cast resin transformers
(this type of transformer is safer for buildings than other types of
transformer), THIBIDI also manufactures components and accessories of
epoxy cast resin transformers for export to Laos and Cambodia; the
Vietnam Electric Cable Corporation (CADIVI) has launched a new product fireproof medium-voltage underground cable which is suitable for
underground works. Moreover, there are some other products from the
company, which are of high technical standards, such as heatproof, oilresistant, fireproof cables. LS Vina Cable has launched hi-tech products
such as high-voltage electric cables (170KV), high-voltage underground
cables (230KV); this company is one of the first Vietnamese companies
that have successfully applied ERP (Enterprise Resource Planning)
software in production and business activities. The Wind Turbine
Generator Manufacturing Plant successfully manufactured the first wind
power generator in May 2010 (although there is much to be improved on
these wind power generators).
The quality certification draws a great deal of attention from companies.
Most of the companies involved in exporting have achieved TCVN, IEC,
VDE (European standards certification).
Electrical equipment manufacturing companies are concentrated in three
key economic regions II, III and V located in the North, the Central and
the South of Vietnam (see Map 1).
45
Figure 7: Vietnam manufacture of electrical equipment (2005-2012)
Figuream manufacture of electrical equipment

(million EUR)
Vietnam manufacture of electrical equipment (million EUR)
Millions
Linear (Vietnam manufacture of electrical equipment (million EUR))

6,000.00
5,000.00
4,000.00
3,000.00
2,000.00
1,000.00
0.00
2005
2006
2007
2008
2009
2010
2011
2012
Source: General Statistics Office, Vietnam
Export:
Besides supplying to the domestic market and accounting for 95% of local
market shares, Vietnamese electrical equipment is also becoming popular
in the international market. Transformers are being exported to the Middle
East, Japan, and Africa, insulation porcelain is going to the US and the
Middle East, compact fluorescent lamps and wires to Latin America, the
Middle East, Myanmar, and the Philippines and electrical cables find their
way to the US, Europe and most of the Asian countries. The main export
markets now include Japan, Korea, Hong Kong, ASEAN countries. Export
turnover has been growing and is forecast to continue growing well in the
coming years.
Currently, many Vietnamese companies are focusing on the two
neighbouring markets which are considered to have huge potential. These
are Laos and Cambodia. Laos has a population of 7.2 million; the potential
for hydropower production in Laos is 23,000MW but the installed capacity
of hydropower plants in Laos currently totals only 3,200MW and Laos has
set an objective to increase the number to 12,500MW in 2020 and
electrify 90% of its rural areas by 2020. The huge increase in power
production capacity relies on eight hydro plants and one lignite-fired
power plant becoming operational over the next seven years. Cambodia
has a population of 14 million however, only 22.47% of households in
Cambodia have access to the national power grid, of which 82.53% live in
urban areas and 9.31% in rural areas. The objective of Cambodia's
electricity development plan is that by 2030, 70% of rural households will
have access to the national power grid. Vietnamese companies are also
looking for expansion into other markets throughout the world.
According to the plan for the 2011-2015 period, export growth of the
electrical equipment industry will be 18% a year and 15% in the 2016Source: CBI Market Information Database URL: www.cbi.eu Contact: marketintel@cbi.eu www.cbi.eu/disclaimer
46
2025 period. Particularly, exports of electrical wires and cables will rise
35% annually during these periods. This proves that the electrical
equipment industry in Vietnam is receiving substantial, central financial
support and is being developed with the support of government. This is a
very optimistic sign for the sector.
Figure 8: Vietnamese electrical products, spare parts and components
Export Turnover (2009 2012)
Vietnamese electrical products, spareparts and

components Export Turnover (million EUR)
Millions
Vietnam Electrical products, spareparts and components Export Turnover

(million EUR)
7,000
5,722
6,000
5,000
3,403
4,000
3,000
2,621
2,017
2,000
1,000
0
2009
2010
2011
2012
Source: Vietnam Custom Statistic
Wires and cables sub-sector/wire harnesses:

Among other electrical equipment products, the export of wires and cables
has very positive prospects with the increasing trend of export and
particularly the successful expansion of the product to the US market and
the Japanese market which are considered to be very demanding markets.
The manufacturing capacity is high however export turnover accounts for
less than 10% of manufacturing so far. There is much room to improve
exports. Vietnamese cable and wires are of a good quality.
According to HECA, there are more than 200 companies in Vietnam
involved in the manufacture of electrical wires and cables. More than 75%
is made up of small and medium-sized enterprises, the remaining 40
companies are companies with foreign investment from Japan, Taiwan,
Korea, etc. The number of FDI companies is small but they account for a
large proportion of export turnover.
There are 3 levels of technology in relation to wire and cable
manufacturing companies:
100% companies with foreign investments which specialise in car

cables (no Vietnamese companies are able to manufacture these
high level cables). These companies are mainly from the US, Japan
and Korea (the two biggest names being Furikawa, Sumitomo) and
47
have set up manufacturing bases in Vietnam to enjoy the cheap

labour source. The products will then be re-exported to its car
industries.
Companies with foreign investment from Korea, Taiwan or
Singapore with high level technologies manufacture other electrical
equipment (not car cables). Their products are mainly to be
exported and account for around 27% export turnover in the
sector.
Vietnamese companies which are expanding in domestic and
foreign markets.
Wire harnesses in Vietnam are supplied for different product
manufacturing processes, including the manufacture of air
conditioners, telecom devices wiring harness, power cables,
motorbike wiring, generator/engine wiring, car wiring and UPS
wiring. Vietnamese companies supplied wire harnesses for almost
all demand. Vietnamese companies possess good technologies for
wire harnesses. This is an area where Dutch companies could
source from Vietnamese companies.
SME domestic electrical equipment manufacturers have tried to work out

strategies and many solutions to improve their competitiveness. They
have launched many kinds of products that meet market demands locally
and internationally.
One big problem is that wire and cable manufacturing companies are
facing import taxes for some of the key materials for their production that
have increased significantly in the last years. Some imported materials
that Vietnamese wire and cable companies totally rely on include
galvanised steels (import tax has increased from 0 to 5%, VAT from 5% to
10%), insulation varnish (import tax increased to 15%), XLPE (import tax
20%), etc.
In addition, slow VAT refund processes for enterprises have also caused
many difficulties for enterprises as the amounts are quite high and
companies have to borrow working capital with high interest rates when
their capital is held up in the VAT refund process.
See below Figure 9. Although there was a drop in 2012 exports due to
the fluctuations of the copper price on the world commodities market, the
sub-sector electrical wires and cables is still forecasting rapid growth in
next 5 years.
48
Figure 9: Vietnamese electrical Cables and Wires Export (2004 2012)
Figuream Electrical Cables and Wires Export (Million

EUR)
Millions
Vietnam Electrical Cables and Wires Export (Million EUR)

1,200.00
1,122.74
1,000.00
949.00
800.00
740.22
641.67
620.50
600.00
511.00
400.00
451.14
379.60
281.05
200.00
0.00
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source: Ho Chi Minh City Electrical Cables Association(HECA)
Domestic market:
Vietnams electricity demand is highest in East and South Asia. The
development plan of national electricity for period 2011-2020 and toward
2030 (Electricity Plan VII) was approved by the Prime Minister. According
to that, the electricity output will be about 194-210 billion kWh in 2015
and about 330-362 billion kWh in 2020. Total estimated investment for
the whole electricity sector from now to 2020 is about EUR 35.62 billion,
the average annual need is about EUR 3.56 billion. The growth rate of
electricity demand in Vietnam is the highest in East and South Asia.
Table 3: Electricity output to 2030
Year
2010
2015
2020
2025
2030
Total electricity
output
100.9
TWh
194.3
TWh
329.4
TWh
489.6
TWh
695.1
TWh
Hydroelectricity
38.8%
33.0%
25.7%
19.7%
14.4%
Oil and gas

Thermoelectricity
38.6%
24.3%
17.3%
17.3%
11.9%
Coal
thermoelectricity
16.2%
35.3%
46.9%
44.5%
52.7%
Renewable
Electricity
2.6%
5.0%
6.1%
8.1%
9.3%
1.4%
5.9%
7.4%
2.6%
4.5%
4.3%
Nuclear Power
From import
3.8%
2.4%
Source: Electricity Plan VII
49
The volume of transmission lines and substations that are expected to be

built in the period 2010-2030 (Electricity Plan VII)
Table 4: The volume of transmission lines substations that are expected to
be built in the period 2010-2030
Item
Unit
20112015
20162020
20212025
20262030
500kV Station
MVA
17.1
26.75
24.4
20.4
220 kV Station
MVA
35,863
39,063
42,775
53,25
500kV
Transmission
line
Km
3,833
4,539
2,234
2,724
220 kV
Transmission
line
Km
10,637
5,305
5,552
5.02
Capital investment in electricity development (Electricity Plan VII)

Table 5: Capital investment in electricity development
Period
2011-2015
2016-2020
2021-2030
Investment in power
plants (Billion EUR/1
year average)
2.30
2.44
3.58
Investment in power
grid (Billion EUR
/1year average)
0.96
1.41
1.89
Total investment
(Billion EUR /1 year
average)
3.26
3.85
5.48
Regarding the domestic market, the demand for electrical equipment

products is due to increasing demand and manufacturing. The demand for
equipment is particularly high in areas that still have no access to the
national power grid, including highland, remote areas and islands. In
these areas, electrical equipment manufacturers must take full advantage
of natural conditions and utilise the potential for new and renewable
energy development to generate power on site. These areas are a
potential market for manufacturers of electrical equipment, renewable
energy equipment and clean power production equipment. Dutch
companies can also find opportunities to supply equipment and
technologies in renewable energy and clean power production to Vietnam.
50
4.2
Value chain
There are some key players in the electrical equipment manufacturing

value chain. Opportunities for Dutch companies in importing can be found
with manufacturing companies (in 4.2.2) which supply wires and cables,
wire harnesses, transformers, electric boxes and panels and electric
components.
4.2.1
Input:
a. Companies which supply materials (both imported and local) to
manufacturing companies. The material can be metal including
copper, aluminium, alloy and steel, plastic and/or insulated
porcelain.
b. Companies which supply machinery/technologies for the sector
c. Companies which supply parts for the manufacturing companies
(supporting industry)
4.2.2
Manufacturing:
The companies could be involved in manufacturing parts, equipment or

assembly devices. Companies with assembly business can then deliver the
assembled parts to their contractors.
In this process, together with manufacturing companies, there can be subcontractors for the manufacture of spare parts or for special technologies
such as plating or painting.
During this process, there are also testing centres or companies which
conduct quality testing for products. Some big manufacturers can carry
out testing themselves.
4.2.3
Sales/Export and installation:

a. Trading companies which supply the electrical equipment to
end-users (consumers) or to engineering companies.
b. Companies in this process can be engineering companies which
do the designing, supply solutions and carry out installation and
maintenance for customers (normally industrial factories, etc).
c. Manufacturing companies can do the distribution themselves to
foreign markets.
4.2.4
Customers:
Customers of products of this sector include electricity, construction

industries, or consumers (end users), or trading companies from foreign
markets, or contractors of assembly products.
51
Diagram 2: Value chain for the electrical equipment manufacturing sector

Companies
Operations
R&D, design
Electrical device
manufacturers
Manufacturing/assembling
Input
s
Material
suppliers
(porcelain,
Testing
Vietnamese
companies
join in all
aspects of
the value
chain from
design,
input,
manufactur
ing,
testing,
sales,
export and
after-sales
Design
Function
Purchasing or
importing
materials and
equipment/techn
ologies
Manufacturing
or outsourcing
the subassembly, final
assembly
Electrical
device
manufacturers
Electrical
device
manufacturers
Electrical
devices parts
manufacturers
/assemblers
Testing
organisations
Testing, logistics
Advertising,
direct sales,
retail
Sales/Export
Machinery/
technologies
Exporting to
foreign markets
Electrical
devices
manufacturers
Distributors
sell to
domestic
market
Contractors
for electrical
projects
Installation for
projects
After Sales
Foreign
markets
Returns, repairs,
maintenance,
warranty
Electrical
device
manufacturers
Distributors
sell to
domestic
/foreign
markets
Contractors
for electrical
projects
4.3
Internal/external factors for electrical

equipment manufacturing companies
4.3.1
Internal factors:
52
a. Technology: Vietnamese electrical equipment manufacturing

technologies are relatively good and have received substantial
investment by government and business. Vietnamese
companies can manufacture a wide range of products for the
sector with high quality. Vietnamese products can meet the
quality requirement of demanding markets such as Japan, US
and Europe.
b. Labour force: Labour is abundant and cheap. This is what
foreign companies are looking for when they think of setting up
a manufacturing base in Vietnam.
c. Capital: Capital is always a challenging issue for Vietnamese
companies especially in sectors with high capital requirements.
d. Domestic market: The domestic market is quite large as
Vietnam is a developing country with a high demand for
electrical equipment. There is increasing demand in terms of
energy, not only electricity but also other energies such as oil
and gas, etc.
4.3.2
External factors:
a. Policies: The Vietnamese government has realised the great
potential for the development of the sector and set priority
strategies to develop it. However, there is still not much
support from the government as implementation is always far
behind the policies. There are also inconsistencies in terms of
control by the government of parallel departmental policies.
b. Tax: There are big challenges for companies due to tax policies.
Although the sector itself is encouraged to develop, the tax
enforcement on imported material conflicts with the
encouragement policies. Some vital, imported materials
correspond to high import tax rates which cause great
difficulties for enterprises.
c. Competition: There is huge competition between Vietnamese
companies and FDI companies in the local market. This is a
threat to local companies in the Vietnamese market.
4.4
d. Foreign markets: the competition on the export market is

considered high. However, Vietnamese products have tried to
gradually find the way to penetrate some niche markets of high
quality demand such as heatproof, oil-resistant, fireproof wires
and cables, transformers, electric panels and rotary electrical
equipment.
SWOT Analysis of the electrical equipment

Strength
S1: High quality (particularly the
wire and cable sub-sector has
Weakness
W1: Import dependence in some
input materials
53
already built up a good reputation

on the world market). This is a
product that Dutch companies could
source from Vietnam.
S2: Reasonable prices.
S3: Production lines are relatively
adequate, meeting the sectors
requirement
S4: Manufacture a wide range of
electrical products and widen the
product portfolio
S5: Large domestic market
S6: Electrical equipment
manufacturing in Vietnam currently
hold large market share in domestic
market
S7: The government places a high
priority on this sector with much
support
W2: High import tax rates

W3: This is a sector of high
working capital, and companies
have to borrow money from
banks. The total manufacturing
cost has to include the interest
which can push the product prices
up.
Opportunities
O1: Growing demand from
neighbouring countries
O2: Growing demand of other high
demand markets to which Vietnam
can supply, such as the US, Japan.
Threats
T1: Long VAT refund process
4.5
Conclusion - Opportunities for Dutch

companies in the electrical equipment
Generally, the Vietnamese electrical equipment manufacturing sector is

developing strongly with many achievements. The government has issued
many policies which are helping the sector develop in order to meet with
local market demand and expand to international markets. Vietnam has
some comparative advantages and disadvantages in exporting,
outsourcing and manufacturing the above sectors:
Advantages:
Vietnamese electrical products, especially wires and cables, panels
and high quality boxes, dominate the domestic market and are
expanding into foreign markets successfully.
Vietnam has a cheap labour force. This factor contributes to the

competitive prices of electrical products which help Vietnamese
companies compete on export markets, especially nearby markets
such as Laos or Cambodia.
The government is prioritising this sector with much support
through many government policies.
The technology in the sector is relatively well developed.
54
Disadvantages:
Due to discrepancies in policies, Vietnamese companies currently
face difficulties in terms of high import taxes on some imported
materials, tax refunds and land policies.
Opportunities:
Dutch companies can import wires and cables, wire harnesses, electrical
panels and boxes and transformers from Vietnam. Vietnamese companies
welcome opportunities to expand their export markets to the Netherlands
and are very interested in finding out about the technological
requirements and electrical infrastructure conditions of the Netherlands in
order to expand the market if they meet these requirements (see Annex
4a Interview results Electrical equipment manufacturing companies).
4.6
A mission of Dutch importing companies could be organised to attend The

7th International Electrical Technology & Equipment Exhibition Vietnam ETE 2014 from 16-19 July 2014 in Ho Chi Minh City. The
exhibition showcases Vietnamese companies which manufacture Electrical
Technologies & Equipment, Lights & Lighting Systems and Complete
Equipment Contractors. Dutch companies can meet with Vietnamese
companies in different sub-sectors of electrical equipment manufacturing.
The mission may also include business tours, meetings and working
programmes at electrical equipment factories, projects and power plants
in the southern area of Vietnam.
Dutch companies can also get further support from other organisations as
mentioned in Executive Summary, Annex 15 Guidance for Dutch
companies to obtain support in the Vietnamese market, and also Annex 2
List of supporting organisations in promising sectors.
companies Electrical equipment to look for possible useful contacts for
their business expansion to the Vietnamese market.
55
Moulding manufacturing sector
Dies, and moulds are fundamental to the manufacture of durable-goods.

Dies are metal forms used to shape metal in stamping and forging
operations. Moulds, also made of metal, are used to shape plastics,
ceramics, and composite materials. A jig is used to hold the metal while it
is being drilled, bored or stamped. Most of the products of major industrial
industries, such as the automotive sector, consumer electronics and
electronic gadgets, are mass produced through mould and die
manufacturing processes. Moulding is a significant sector in supporting
industries.
Machinery capacity:
Generally in supporting industries, the machine capacities of Vietnamese
companies are relatively average depending on the companies equipment
investment.
Machinery and technologies in the Vietnamese supporting industry mainly
come from Japan, South Korea, Taiwan and China. Some German, Italian
and US machinery manufacturers have started to enter the market in the
last 7 years and gradually expand their market shares. Some of the brand
names include:
US: Flow, JSW, etc
Italy: Davi, Sodick, Spinner, Pama, Eurstamp, etc
Germany: Siemens, Deckel Maho, etc
Austria: Engel
Japan: Shibuya, Komatsu, Amada, Moriseiki,
South Korea: Woojin, Hyundaiwia
Taiwan: Excetek, Argo, Denver, Proma, etc
China: many different machines used
The Vietnamese can equip themselves with a wide range of new foreign
machines or used machines:
CNC MACHINE TOOLS: CNC Lathe Machine, CNC Milling Machine,

CNC Drilling Machine, CNC Grinder, CNC Wire Cut Machine, CNC
Electrical Discharge Machine,
Machine tools: Lathe, Milling, Drilling, Grinder, Boring Machine,
Slotting Machine, Shaping, Bandsaw, etc
Sheet metal processing machines: Pressbrake, Shearing, Punching
Machine, Plasma/ Laser Cutting Machine, Press/Hydraulic Press
Machine, Plate Bending Roller/Bending Machine, Steel Processing
Machine, Engraved Machine, Shaw, Welding, etc
Injection moulding/die casting machines: Plastic Injection, Die
Casting Machine, Die Spotting Machine, etc.
56
Overview of the moulding manufacturing

sector
5.1
There
are some key kinds of moulding:

Plastic injection moulds
Press dies, stamping
Die casting moulds
Forging dies
Rubber moulds
Metal moulds
Powder metallurgy moulds and glass moulds
Jigs and fixtures
Vietnamese companies are able to provide all of the moulding types

mentioned. Their products are used mainly in machine tools, automotive,
mechanical products and machinery manufacturing. Dutch companies
manufacturing automotive, machinery and machine tools can cooperate
with Vietnamese moulding companies for sourcing parts and components.
Some key trends and descriptions of the Vietnamese moulding
manufacturing sector include:
The nature of the die and mould business is based on each tailormade contract. This is not a mass production industry.
Rising industrial mould imports originate largely in Japan, the US,
and South Korea. Firms have been outsourcing highly-skilled jobs,
such as tool and die making, from lower-wage countries such as
South Asian countries, China, etc because these markets can offer
lower labour cost for highly skilled jobs.
But import and export data among these countries does not give a
complete picture of performance and competition in the tool, die,
and mould industries because the performance of moulding and die
sectors is mainly influenced by the development of the industries to
which they supply.
The moulding and die casting industry is primarily made up of
small and medium-sized enterprises using skilled employees. The
minimum qualification of workers should be college graduation or
higher. Experience is also considered a very important factor for
moulding company staff. Mould and die makers are machinists who
understand how to use complex machines such as lathes, laser
cutting machines, and milling machines, precision machinery, hand
tools, heat-treating, plating, etc.
Therefore, basic high-technology training is necessary for mould
and die makers to work with CAD/CAM and CNC machines. Even
after apprenticeships, workers will continue training and usually
specialise in a particular area, choosing certain types of tools, dies,
and moulds with which to apply their expertise.
To meet market demands, mould and die makers must endeavour
to
improve
their
technologies
continuously.
Vietnamese
57
5.1.1
manufacturers are trying to move towards production of more

complex and customised products.
Cheap labour costs alone are will gradually decrease in importance
in the future. Manufacturers should therefore attain certain
technology levels and continuously upgrade them. Vietnamese
companies in the sector have endeavoured to equip Taiwanese or
Japanese businesses gradually in order to follow the trend.
Government policies
See Annex 11 Regulations governing promising sectors

The Vietnamese government considers the die and mould sector as a key
area for development in the supporting industry. Besides Decree 186 to
support Vietnamese mechanical industry, specifically the mould and die
sector, there is one further strategy to develop die casting and moulding Decree 583 in 2012. With this Decree, the government approved the
master plan to develop the die and mould sector from 2009-2020 with a
vision to 2030. The Decree states that the mould and die sector is a very
important part of the mechanical industry and that the development of the
sector should be in line with the overall plan for the mechanical industry.
So far, the government has introduced a range of policies (master plan for
supporting industry, die casting development plan strategy, etc), however,
it has not yet backed this up with a concrete action plan for development.
5.1.2
Manufacturing/export:
Currently, there are no official figures from the government or related

organisations for measuring the development of manufacturing and
outsourcing capacity in the moulding sector in Vietnam. The moulding
sector falls under the mechanical industry in general. According to
unofficial figures from VAMI Vietnam Association of Mechanical Industry,
there are more than 100 companies in the sector in Vietnam. The
companies are mostly Vietnamese SMEs with different manufacturing
capacities. Companies can employ from ten to many hundreds of staff and
have manufacturing capacities from 20 moulds/month to hundreds of
moulds/month. On average, it takes around 240 260 hours to
manufacture 1 mould in Vietnam. The timing is only average compared to
100 hours in Japan and around 200-300 hours to make a mould in Asian
markets (according to unofficial estimates from moulding companies). This
gives Vietnam an advantage in terms of developing the sector.
The technology applied in the moulding industry in Vietnam is diversified.
Small Vietnamese companies can equip themselves with Chinese or
Taiwanese technologies. However, bigger companies tend to equip
themselves with Japanese machinery or US and European technologies.
More than half of the companies focus on the large domestic market with
low technology requirements and a low end market. Meanwhile the
remaining companies continuously upgrade with higher technologies and
quality to find ways to join the value chain of different sectors, such as the
58
supporting industry for electronics, automotive, etc or become an

outsourcing partner for foreign customers.
The Japanese moulding sector and automotive and electronic industries
play a vital role in the Vietnamese mould sector. Not only the output
demand but also the input demand of Vietnamese mould companies is
served by Japanese technologies. According to draft estimates from
experts in moulding (not official estimates), 60% of moulding companies
in Vietnam use Japanese technologies and equipment for the
manufacturing process. The imported equipment/machinery is either
brand new or second hand. According to forecasts from one Japanese
moulding equipment manufacturer, between 2012 and 2015 Vietnam will
buy 2,000 to 2,800 injection moulding machines. This is very positive sign
that companies themselves are trying to increase the competitiveness of
the sector effectively.
Another reason for Japanese role is that Japan is expanding to South Asia
for outsourcing moulding products and they provide very good training
and technical support to the target markets in order to help the
manufacturing companies make moulds using Japanese technology. One
Japanese ODA is planning to contribute towards human resources in order
to enter the mould sector in Vietnam from 2014. JETRO Japan External
Trade Organization, JICA Japan International Cooperation Agency and
other agencies have played a central role in the Japanese long term
strategy.
Standardisation factor: as in some other manufacturing sectors,
Vietnamese companies are not fully qualified by international standards
with unified ISO. According to interviews with moulding companies, only a
few companies are trying to equip themselves by adopting relevant
international quality certificates. Around 70% of other companies dont
bother to follow any because the sector tends to adopt the Japanese
standards 5S, Kaizen, etc and, as their customer bases are now mainly
from Japan, the customers only pay attention to the 5S standard and
product quality. Vietnamese companies therefore normally dont try to
obtain international quality standards.
Recruitment and training labour in the sector is also a big issue for
Vietnamese companies. There are universities/colleges/vocational schools
providing training for mechanical engineers/machinists however the
education quality is considered very low and cannot meet the average
requirements of human resource standards for the moulding sector. Many
companies recruit staff and accept the fact that they will have to be
retrained in even basic practical skills and/or working with some basic
technologies or machinery. Many companies interviewed raised this issue
as the challenge that they are facing in the business. This is a problem
which needs the support from government.
Another challenging factor for moulding companies is that there is no
59
development research institution in the sector to support small and

medium enterprises with learning and/or developing new technologies.
The situation could delay the moulding sectors development.
The input materials for mould manufacturing partially rely on imports.
Some metals with high processing values are imported from regional
countries such as Malaysia, Thailand and Indonesia. This is a big factor
and increases costs and delivery times for the Vietnamese moulding
industry. By importing Malaysian or Thai materials or parts, producers in
Vietnam incur additional costs in transportation, storage and handling.
This is a big disadvantage for Vietnamese moulding manufacturing
companies.
In addition, in some industries, Vietnam imports high technology moulds
from Japan and Malaysia which Vietnam cant produce itself. Some of the
higher technologies that Vietnam is lacking include surface treatments,
powder coating and precision moulding for some parts in electronic
products, such as parts for hand phones, etc.
Vietnamese moulding companies are facing very hard competition from
Chinese companies, especially in prices. To compete with China in the
sector, Vietnam is moving towards integral manufacturing, i.e. each
product has specifically designed, unique parts.
Moulding companies are concentrated in three key economic regions, the
North, the Central and the South of Vietnam (see Map 1).
The moulding sector is starting to see interest from foreign investors.
Viedam, a Vietnamese-Danish joint venture was granted an investment
certificate to set up Viedam Mould R&D Center at Saigon Hi-tech Park
(SHTP) in Ho Chi Minh City.
5.2
Value chain
Vietnamese or foreign companies in electronic, electrical, automotive, etc

industries which need moulding can be customers for moulding
companies. Moulding customers are involved in contracting with moulding
companies from the very early stages.
After securing the contract, moulding companies go through all stages of
designing, manufacturing, assembling, testing, sales and after sales. They
may outsource the CAD/CAM design services, or some moulding parts.
Moulding companies get their input materials and equipment from plastic,
metal or equipment suppliers.
Dutch companies can cooperate with Vietnamese companies at any stage
of the value chain.
60
Diagram 3: Value chain of mould manufacturing
Inpu
ts
After Sales
Sales/Export
Testing
Manufacturing/assembling
Vietnamese
companies
join in all
function of
value chain
from design,
inputs,
manufacturi
ng, testing,
sales/export
/after-sales.
Design
Function
5.3
5.3.1
Companies
Operations
Designing following
technical requirement
from customers
Customers:
Automotive,
electronic ,
etc
companies
which need
molding
Molding/casting
companies
Purchasing or importing
materials and
equipment/technologies
Manufacturing or
outsourcing the subassembly, final assembly
Machinery/
technologies
Molding/casting
companies
CAD/CAM/servic
e providers, or
Plating, surface
treatment
service
providers, or
Mold parts
providers
Molding/casting
companies
Testing, logistics
Delivering molding to
customers which ordered
Molding/casting
companies
Customers:
Automotive,
electronic , etc
companies
which need
molding
Returns, repairs,
maintenance, warranty
Material suppliers
(metals, plastics)
Molding/casting
companies
Internal/external factors on moulding

Internal factors:
Limited qualified labour resource output from universities, colleges
for the moulding sector
Moulding technologies and equipment are invested individually by
each company
Moulding companies can manufacture a wide range of products
supplied to the automotive, machinery manufacturing and machine
61
5.3.2
5.4
tools sectors. These are product segments which Dutch companies

could source from the Vietnamese market.
There is fragmented cooperation among moulding companies which
specialise in different processes within moulding manufacturing
External factors:
The government provides full support by launching development
strategies for the sector
Competition from other moulding sectors in regional markets
Initial interest from foreign advanced moulding sectors in Vietnam
Material imported from other markets can be hard to source and
correspond to high prices
SWOT Analysis:
Dutch companies can cooperate with Vietnamese companies in

outsourcing moulds from Vietnam.
Strength
S1: Labour force is abundant and
cheap
S2: Government realises the
importance of supporting industry
and especially mould sector.
Government launches policies to
support the sector.
S3: Technology is reasonably good
with over 50% of moulding
equipment and technologies coming
from Japan which are popular in the
market
Opportunities
O1: The strong support from
Japanese moulding sector which
provides opportunities for
Vietnamese companies to approach
advanced technologies.
O2: Initial interest from foreign
moulding sector in Vietnam
5.5
Weakness
W1: Lack of proper training from
universities or vocational courses
for graduate machinists.
Vietnamese companies have to
retrain people upon recruiting.
W2: In particular, die-related
SMEs are especially insufficiently
developed.
W3: The import dependence on
some kinds of materials.
W4: The development of moulding
sector is fragmented, not
consistent across the sector
Threats
T1: The competition of Chinese
moulds with cheap prices.
T2: The substitute products from
Thailand and Malaysia
Comparison with two key competitors
The Vietnamese moulding sector has not had sufficient investment from
the government. This situation is the same as other sectors in supporting
industries. This is a big disadvantage for Vietnam compared with other
markets. In other markets, there are relevant governmental organisations
to closely monitor and support the companies in the sector such as Japan
Die & Mould Industry Association, Thai Die & Mould Industry Association,
etc. Among regional competition, Malaysia and Thailand are two key
competitors in the sector. Japan is shifting the many parts in mould
62
manufacturing to Malaysia as the labour force in the sector from Malaysia

is highly skilled and can carry out much of the detail work. Japan, of
course, still maintains some key technology in Japan only.
Diagram 4: Position of Vietnams moulding manufacturing sector
STAGE ONE
Simple
manufacturing under
foreign guidance
STAGE TWO
Have supporting
industries, but still
under foreign
guidance
STAGE FOUR
Full capability in
innovation and
product design as
global leader
STAGE THREE
Technology &
management
mastered; can
produce high quality
products
Japan, US, EU
Korea,
Taiwan
Thailand,
Malaysia
Vietnam
5.5.1
Malaysia
Malaysia's engineering supporting industries, which include the moulds

and dies, machining, metal stamping, casting, heat treatment and
plating/surface treatment industries, have developed rapidly over the last
three decades in tandem with the overall growth of the country's
manufacturing sector. Malaysia is a major outsourcing destination for
MNCs in the E&E, automotive, machinery manufacturing, oil and gas,
aerospace, medical, defence and photovoltaic industries. Malaysia's mould
and die companies have the capacity to fabricate most types of moulds,
dies and tools to cater to the diverse tooling needs of the manufacturing
sector.
5.5.2
Thailand
The Thai mould sector is quite well developed in terms of supporting
automotive assembly and electronic manufacturing. According to a Thai
Tool and Die Industry Association (TDIA) survey, there are approximately
1,061 mould and die factories in Thailand. They can manufacture a wide
range of moulds with the required high degree of technology.
5.6
Opportunities for Dutch companies in the

moulding sector
Generally, the Vietnamese moulding manufacturing sector is lagging

behind Thailand and Malaysia and facing tough competition from the
Chinese mould industry due to some internal and external factors.
63
However, companies in the sector have made good progress in improving

the technologies to meet domestic and foreign demand. Vietnam has
some comparative advantages and disadvantages in terms of exporting,
outsourcing and manufacturing the above sector, as set out below.
Advantages:
Vietnamese companies are aware of the importance of equipment
in the sector, therefore they have gradually invested in equipment
to increase their competitiveness. Japanese equipment is popular in
the market especially with moulding companies which want to join
the international value chain or wish to expand their outsourcing
market overseas.
The government puts a high priority on this sector with much
support.
The Vietnamese moulding sector has received the interest and
support of Japanese industries when they have been expanding
their outsourcing of supporting industries in South Asia.
Disadvantages:
Companies in the sector are facing challenges with respect to
labour resources as there is a lack of proper training from
vocational schools and universities in skilled machinists. Companies
normally have to retrain machinists when employing them.
The sector still depends on some import materials.
Opportunities:
Dutch companies in automotive, consumer appliances and high technology
appliances can outsource moulding manufacturing in Vietnam. Vietnamese
companies welcome opportunities to receive enquiries from Dutch
companies on moulding requirements especially with medium-sized orders
(see Annex 5a Interview result Moulding manufacturing companies).
5.7
Dutch companies can attend Vietnam Manufacturing Expo 2014 the

most comprehensive Machinery and Technology event in manufacturing
and supporting industry from 27-29 August 2014 in Hanoi. The exhibition
unites a large number of Vietnamese companies in the supporting industry
to showcase their manufacturing capacity and look for customers. Dutch
companies will have opportunities to meet with different moulding, die
casting, jig, etc manufacturers and identify potential Vietnamese partners.
After the exhibition, Dutch companies can visit the factories of Vietnamese
companies to see the manufacturing process and management
techniques. Dutch companies can also discuss potential cooperation with
Vietnamese companies.
Besides the mission described above, a buyers/sellers mission can be held
where the mission programme is tailored for each Dutch company to meet
with moulding companies (see Annex 5) which match their technological
64
requirement. In this mission, Dutch companies cannot meet with many

different companies, however they can meet with specific Vietnamese
companies which can offer the technology they require.
In order to help Dutch companies to cooperate with the appropriate
companies with strong labour resources, Dutch industries can also
organise seminars/training for Vietnamese companies on new
technologies. This is very useful for Vietnamese companies to be updated
with new technologies. These courses can help them to develop and meet
the requirements of Dutch industries. Also in a long term view, supporting
programmes for Vietnamese companies are very useful. This type of
cooperation programme, between Dutch industries with some key
vocational schools or universities, provide short courses on basic
technique on machinery application for graduates before they get a job in
the moulding or metalworking sectors.
Dutch companies also can get further support from other organisation as
companies to obtain support on Vietnam market, and also Annex 2 List
of supporting organisations in promising sectors.
companies Moulding to look for possible appropriate useful contacts for
their business expansion to the Vietnamese market.
65
B.
Promising sectors for exports from

the Netherlands
In Part B of this market analysis, the study will be focusing on the

promising sectors identified in the first stage:
The agricultural industry (focusing on agricultural machinery, agro

processing and packaging, horticultural equipment)
Turbines for wind energy (but only offshore oil, gas, wind etc.)
Equipment and machinery for the autonomous manufacturing of
means of transport such as bicycles, mopeds, baby carriages etc
Agricultural industry
The agricultural sector is traditionally a key sector in the Vietnamese

economy, accounting for nearly two-fifths of Vietnam's gross domestic
product.
The economys transformation in the 1990s, once the openness to the
global economy had been established, is largely due to agricultural
development. The land laws and market reforms in agriculture fostered a
transition moving from a system of production controlled by public
ownership towards one in which farm households possess effective
property rights over land and farm assets and can decide on production
following market demand.
In 1993, the government made a big improvement in privatisation of land
rights with a new land law and issuance of land use certificates. Although
land still remained the property of the state, under the new law, usage
rights could legally be transferred, sold, leased, bequeathed and used as
collateral for loans. The duration of tenure rights was extended to 20
years for the production of annual crops and to 50 years for perennials.
The impressive transformation of Vietnamese agriculture in terms of land
reform, de-collectivisation and the opening of the agricultural sector to
market forces has permitted Vietnams rise from its net importer status to
the second-largest rice exporter in the world. Besides rice, key exports are
coffee, tea, rubber and seafood, fruit and vegetables.
This analysis will focus on 4 key exports which strongly influence the
growth of agricultural machinery (section 6.1): rice, fruit and vegetables,
fisheries, and livestock. After this, the agricultural equipment sector is
described (6.2), as well as agro processing and packaging (6.3) and
horticultural equipment exports from Netherlands to Vietnam (6.4).
66
6.1
Background study:
6.1.1
Rice production:
Vietnam is known as one of the most important rice producers and

exporters in the world; it is the second largest rice exporter in the world
after Thailand and India. After the transformation in agriculture, the
country started to export rice from 1987 and switched from a net rice
importing country to a net rice exporting country in 1989. According to the
Vietnam Food Association (VFA), rice exports from Vietnam in 2012 hit a
record of 7.72 million tons with a value of EUR 2.59 billion, contributing
significantly to the total export revenue of the country. Vietnam has
currently exported rice to about 120 countries around the world. Two main
consumption markets of Vietnam are Asia and Africa, accounting for 7080% of total exported rice.
Figure 10: Vietnam Rice Export Import (1962 2010)
Source: FAO, VFA, GSO
Despite being one of the leading rice exporters in the world, in recent
years, Vietnams rice manufacturing and exporting sectors have faced
difficulties and challenges, such as post-harvest losses, which have
prevented the industry developing its full production capacity. The
government, particularly the Ministry of Agriculture and Rural
Development and the Ministry of Industry and Trade, together with many
departments and research institutions, have worked on plans and
strategies for developing Vietnamese agriculture. One of the key parts of
these strategies is about technologies and the mechanisation of the
agricultural industry. This is an opportunity for Dutch companies to supply
agricultural machinery to Vietnam.
67
6.1.2
Fruit and vegetables:
The potential of fruit and vegetable production and export in Vietnam,

together with challenges in terms of lacking high technologies in the
sector are big factors leading to opportunities for Dutch companies to
supply agro processing and packaging technologies/equipment to the
Vietnamese market.
Production: Vegetable production in Vietnam has an advantageous
geographical position across many latitudes, tropical climate zones and
even some special sub-climatic temperate regions such as Sa Pa, Tam
Dao, Da Lat; this is favourable for vegetable production. Vietnam can
grow 120 tropical, sub-tropical and temperate vegetables types and,
together with technological advances for off-season vegetable production,
can meet domestic demand and export processing. The increased
consumer demand for vegetable products and export demand leads to the
fact that the area and production of vegetables is increasing. Vietnam is
paying a great deal of attention to quality control and food hygiene and
safety.
Key vegetable species are plants including baby cucumber, mushrooms,
peas, chillies, onions, eggplant, tomato, cabbage, beans, broccoli,
cauliflower, asparagus, fine bean, snow pea, baby corn, okra, baby carrot,
ginger, garlic, taro, etc. Some of the above products are produced by the
production team in gardens or on organic farms, and also involves the
export of processed frozen vegetables.
Beside vegetables, Vietnam also has big potential for fruit production with
many key tropical fruits such as banana, citrus, longan, pineapple, litchi,
rambutan, mango, dragon fruit, persimmon, avocado, passion fruit,
tamarind, mangosteen, pomelo, grapefruit. The average fruit yield in 2011
of the whole country reached 10 tons/ha, an increase of 40% compared to
2005 (7 tons/ha). The total quantity is estimated at 7 million tons.
Export: Vietnamese fruit and vegetables are exported to approximately
40 countries and territories, including the United States, Russia, Japan,
China, etc. Based on the information provided by Vietnam Fruit
Associations in 2011, there are 25 governmental companies, 7 joint
venture companies, 129 private companies and more than 10,000
households taking part in the processing of fruits and vegetables.
Potential trends in the development of Vietnam horticulture in the
next 5 years: The Mekong Delta is the main area of fruit production in
Vietnam and is providing 70% of fruit for the domestic and export
markets. The government targets for fruit production development until
2020 of the Mekong delta include 290,000 ha-310,000 ha planting area
and 3.64-4.25 million tons in fruits. The objectives until 2020: total areas
for fruit plantation in the Mekong Delta grow from 290,000.0 ha
to310,000.0 ha, total output rises from 3.64 to4.25 million tons of fruit,
total export revenue from fresh and processed fruits increases to EUR
68
182.50 million. This strong development raises the potential demand for
horticulture equipment.
Food hygiene and safety requirements for vegetables provided to
domestic markets: The Government of Vietnam has paid much attention
to food hygiene and safety. Several regulations for safe vegetable
production comply with the VIETGAP principles which require four basic
criteria: as food safety, worker safety, environmental protection and
traceability. This is a sign of increasing demand for processing and
packaging equipment.
Requirements for vegetable products exported to international
markets:
Production areas must meet the GlobalGAP standards, ISO
9001:2008, HACCP certified by prestigious international
organisations in Switzerland, France, the US.
Advanced technology and equipment for storage and processing.
The companies have to meet the quality and SPS (Sanitary and
Phytosanitary Measures Agreement), Codex Alimentarius (a
collection of internationally recognised standards, codes of practice,
guidelines and other recommendations relating to foods, food
production and food safety) from specific importing countries.
The difficulties faced by exporting and processing companies:
Producers lack capital for high-tech vegetable production.
Pre and post-harvest technologies have not been widely applied;
the quality of vegetables only just meets market requirements.
A powerful link between producers and collectors hasnt been
established; there is no synchronisation between production,
processing and marketing of products.
The technology and equipment of these companies is of a low level,
therefore leading to the products being less competitive in the
markets.
They lack well-skilled, capable workers to apply modern
technologies and operate the advanced equipment lines to meet
the standards of ISO 9001- 2008, HACCP and other requirements
for quality, hygiene and safety of each importing country.
Therefore, aside from some companies that are capable of directly
exporting vegetable products to international markets by the FOB and CIF,
most export under the mandate of the foreign companies or processing for
foreign companies. For example, Lam Dong Agricultural Product Export
JSC has 80% of products exported under the customers labels, such as
Japan and Australia. Only about 20% is produced by the companys
names. Vietnamese companies are endeavouring to overcome
these challenges by investing more in technologies that meet with
international standards for key export products, i.e. frozen and
processed products. This is a very promising market in which
69
Dutch processing and packaging equipment companies and

technology manufacturers could sell their equipment to Vietnam.
6.1.3
Fisheries:
The fisheries sector is one of the most important economic sectors as

Vietnam has a coastline of more than 3,200 km with an Exclusive
Economic Zone (EEZ) of more than 1 million km2. The countrys extensive
network of inland waterways also offers an excellent location for an
expansive aquaculture system that supports the country's very large fish
and seafood export industry.
Today, marine products make up the 4th biggest export item (after crude
oil, textiles and garments and footwear). The Ministry of Agriculture and
Rural Development has approved Vietnams master plan for developing
the seafood industry, with plans to increase the countrys seafood exports
to EUR 7.30 billion by year 2020. One of key focus areas in the master
plan is upgrading processing technologies and equipment to meet the
requirements of international markets.
Fishery processing is a priority sector, however it has not had sufficient
investment. Currently, fishery processing companies can apply more than
20 sets of standards that are used for fish farming and processing units,
including SQF 1000, BAP, ACC, GlobalGAP, MSC and ASC. Processing
technologies are still very simple and not yet very highly developed.
The current situation within the sector, the fact that the
government is prioritising this sector, and the export demand
create opportunities for Dutch companies to supply technologies
and equipment in fishery processing and packaging to Vietnam.
6.1.4
Livestock:
The Vietnamese are big consumers of pork and prefer pork to chicken and
beef. Besides supplying to the domestic market, Vietnams livestock
products are not expected to have held much of a position in the
international market. The country cant meet the current requirements of
high quality products and prompt deliveries, including the requirements
for food safety.
Mechanised processing equipment is very under-developed (primarily
manual slaughtering), or not reliable nor efficient, and production subprocesses are not efficiently engineered. More importantly, most firms
are undergoing a transition from manual to mechanised
production. This is an opportunity for Dutch companies to provide
meat processing equipment to Vietnam.
70
6.2
Vietnamese agricultural equipment sector:
6.2.1
Overview of agricultural equipment sector:
Since 2004, the Vietnamese government has issued policies to increase

agricultural mechanisation, supporting farmers to buy machines for
agricultural production using province budgets. In 2008, 30 provinces and
cities implemented the supporting policies of loans with a low interest
rates and extended payback periods and training courses on the operation
and maintenance of machines for farmers. Under the Programme of
Mechanisation, manufacturers of tractors and agricultural machines are
given priority in investment. After WTO integration, tax rates were
implemented: for imported agricultural machines from ASEAN countries,
the tax rate since 2010 has been 0% and 5% in some cases.
The agricultural machinery market then formed rapidly. There are various
types of equipment such as engines, tractors with a capacity of 18-35 HP
(either locally manufactured or imported) and a wide range of services
(outlet, after-sale service) to serve all agricultural production activities.
There has been rapid growth in terms of the number and different types of
machinery and equipment used for agricultural production, mainly because
of the growth in rice production towards the domestic market and export.
Average rate of mechanisation in Vietnamese agricultural production
activities as follows:
Table 6: Mechanisation rate in the agricultural sector (2010)
Agricultural production activities

Soil preparation for rice cultivation
Mechanisation
rate (%)
72
Soil preparation upland crop
65
Active irrigation for rice
85
Transport in agriculture
66
Rice drying in summer-autumn season in Mekong

River Delta
38.7
Rice harvester
15
Rice thresher
84
Rice milling
95
Irrigation
50
Source: Vietnam Institute of Agriculture Engineering and Post Harvest Technology

(VIAEP)
71
Despite the support from government, there are still many challenges in
the agricultural machinery sector:
Low level and incomplete development of agricultural

mechanisation
Low quality of agricultural and rural infrastructure makes it difficult
to apply machines and equipment (farm land use of each
household: 0.7 ha with 7-8 plots)
Post-harvest technology is still poor with a high post-harvest loss
rate for rice (12%), (corn: 18-19%), soybean (6.2-14%), peanuts
(8.5-15%)
The agricultural mechanic section does not meet the demand of
agricultural production activities
Low quality labour source, untrained operators/users of agricultural
machines
Machinery in the market is mostly imported. Some main import
markets include China, Taiwan and Japan. China and Taiwan have
a strong price advantage while Japan has advantages in terms of
quality and strong and professional distribution networks. There
are a few EU brand names from Spain such as APR.
Moreover, in the past 3 years, a new production model, i.e. large scale
farming, has been introduced and proven to be effective. This is forecast
to drive the agriculture sector's growth in coming years. The model
introduces large scale rice cultivation - a "closed chain" that covers
production, processing, distribution and trading, cooperatives, and a
cooperation arrangement between farmers and enterprises. The links
between farmers and businesses will help farmers concentrate on
production, and enterprises will ensure stable outlets for farm produce.
This management method in agricultural production for nationwide
expansion has helped farmers reduce production costs while increasing
productivity and quality, enabling them to raise profits significantly. To
develop this model in the coming years, there will be a high demand for
high-techn agricultural equipment for medium and large sized farms in
Vietnam;this could be an opportunity for Dutch companies to participate in
the market.
6.2.2
SWOT analysis for Dutch agricultural equipment in

Vietnam
Strength
Weakness
S1: High technology in agricultural

equipment especially in medium to
large scale farm production
S2: Strong reputation on the world
market has been developed. Some
interviewed companies knew about
Dutch agricultural equipment.
W1: Dutch agricultural equipment

may not be suitable for
Vietnamese small scale farming
which requires appropriate
machinery (not too heavy
machinery/equipment)
72
Opportunity
Threats
O1: Together with the development

of large scale rice cultivation in the
future, Dutch agricultural
equipment has good opportunities
to expand to Vietnam.
O2: The Vietnamese government
has prioritised the development of
rice production and exports which is
a good sign for the development of
the sector in future.
T1: Competition with low price

equipment from China or Taiwan.
6.3
Agro processing and packaging market
6.3.1
Overview of the agro processing and packaging

sector
Although the demand for machinery and equipment is huge, the agro and
food processing and packaging equipment (AFPP) sectors in Vietnam are
still in their infancy. The domestic AFPP machinery industry cannot satisfy
internal demand because (despite some skills in copying and reverseengineering), it has proven poor in design and quality. Domestic
equipment is used in small scale processing factories only. Around 7095% of all of the equipment and technologies used by local FPP companies
is imported.
Most large and medium sized food processing and packaging companies,
and even small companies, focus on high segment import equipment and
technologies for their manufacturing demand. They can import from
Europe, US, Japan, China, Taiwan or Korea.
Small size firms on the other hand, tend to rely on locally made food
processing and packaging equipment or can also import from China (with
lower prices) or even buy second hand equipment from high technology
countries. The government, however, has a policy of discouraging imports
of used AFPP equipment. This is because these companies provide mainly
to domestic consumption hence the standards required are not as high as
products provided for international market. Cost is a key consideration as
well for the small size firms.
There is a small amount of locally made AFFP equipment but, in general,
manufacturing activities relating to AFFP equipment in the country are
able to handle customised assembly and fabrication only. Vietnams AFPP
equipment manufacturing technology is around 30 years behind the global
average.
There are no trade statistics available on AFPP equipment for Vietnam
except estimated figures from Vietnam Plastic Association and Vietnam
73
Garden Association that Vietnam AFPP has a stable growth of 15% per
year.
Opportunities: From interviews with companies in the sector (see Annex
6 List of Interviewed companies Agriculture), there are signs of
demand in Vietnam within markets in the sub-sectors below. Dutch
companies could exploit opportunities to supply these kinds of equipment
and technologies.
6.3.2
Small volume equipment targeting the large SME population,

particularly those producing high quality products in small volume.
Packaging equipment to produce plastic packages.
Storage technologies to store fresh fruit
Specialised fruit transport vehicles to reduce post-harvest losses
Seafood processing equipment
Equipment suitable for soft drink production.
SWOT analysis for Dutch FPP technologies and

equipment in the Vietnamese market:
Strength:
Weakness:
S1: Dutch agro processing and

packaging technologies are of high
quality.
W1: Dutch processing and

packaging equipment possibly
has a relatively high price.
Meanwhile, Vietnamese
customers are very price
sensitive upon purchasing new
technology as this is a big
investment for the companies.
Opportunities:
Threat:
O1: Supply of food processing

machinery and equipment is a
growing sector in Vietnam due to the
expansion and importance of the
processed food sector in the country.
There are clear needs from the
Vietnamese market for equipment
and technologies mentioned in
Opportunities above.
O2: The domestic market has an
increasing trend for processed and
packaged food consumption
O3: Supply of higher technology
machinery and equipment is
dominated by foreign suppliers.
Vietnamese customers easily accept
and consider new brands of
technologies/equipment.
T1: Many foreign suppliers/

manufacturers entered the
market a while ago; they have
already built up brand name
awareness from Vietnamese
customers, and built up a
customer base. They can reap
the rewards of being the early
birds.
T2: Likewise, the number of local
suppliers catering to the local
needs has increased.
T3: In addition, there is an active
used and refurbished equipment
market
T4: There is some competition in
the market such as FPP
equipment from Japan, China,
74
O4: The Vietnamese government

encourages the industry to apply
high technologies and equipment to
follow international standards for
exporting. They are currently taking
a number of initiatives to develop the
FPP sector in Vietnam. This includes
encouraging foreign direct
investment and
technologies/equipment into this
sector.
O5: The Ministry of Agriculture and
Rural Development has approved
Vietnams master plan for developing
the seafood industry and
encouraging the application of
modern technologies in fishery
processing for export.
Taiwan and India. Japanese

products are known for their
quality and durability. Other
markets offer products with
cheap prices.
T5: Companies financial
capacities are relatively limited.
Government or state owned
enterprises may rely on budget
allocation for equipment
upgrades. However for private
enterprises, access to bank
financing is difficult and they
often rely on internal financing to
import equipment.
O6: Vietnamese medium sized

companies invest in high
technologies for their manufacturing
and European equipment is one of
the best options for companies to
consider buying.
O7: The Vietnam government is
actively encouraging foreign
investments into the agricultural and
food processing sector.
6.4
Horticultural equipment
6.4.1
Overview of horticultural equipment
Similar to agro processing and packaging equipment, horticultural

equipment is relatively under developed. Small individual farmers used to
rely mainly on a manual labour force in farming for activities such as
seeding, irrigating, harvesting, etc but these are becoming too labourintensive. Besides, when expanding product ranges and productivity to
meet with export demand, there is an increasing demand for high
technology horticultural equipment in Vietnam.
The horticultural equipment market is still narrow and immature. A few
early birds have entered Vietnam in the past 5 years, including Israeli,
Spain, France, Korea and Taiwan. Main supplies include:
Greenhouse
Control Systems
Irrigation Systems
Fertiliser Dosing Systems
75
Drainage water recycling

Accessories
These brand names enter the market through their sole distributors which
can also provide design, installation and maintenance services to
customers. After some years, a few local companies are even able to
design and supply greenhouse structures made in Vietnam to local
markets. Locally made greenhouses are mainly made out of plastic or
fibreglass of low/average quality. The target segment of this level of
product is among low investment technology end-users. Brand name
suppliers will target large scale farms with higher technology investment.
Local manufacturers can only produce low-tech horticultural equipment;
the high end market and high technology equipment sector are still
dominated by foreign brands. Dutch farming technologies are well known
among professional farmers as the high class technology product. They
welcome opportunities to approach new technology from advanced
markets in order to develop the Vietnamese sector. According to
interviews with Vietnamese horticultural equipment trading companies
(see Annex 6), opportunities for Dutch companies are in supplying high
technology equipment to these sub-sectors:
6.4.2
Temperate Control Systems

Irrigation Systems
Fertilizer Dosing Systems
Specialised tools for fruit harvest
SWOT analysis of Dutch horticultural equipment in

Vietnam:
Strength:
S1: High technology and quality
S2: Strong reputation of high
quality equipment has been
established in the market
Weakness:
Opportunities:
O1: The Vietnamese government is
prioritising agro product
manufacturing with export focused
targets which require much
Threats:
T1: The possible competition with
low end equipment in price
(Vietnamese consumers are quite
price sensitive).
W1: High quality goes together

with high price which may cause
challenges when making initial
investments to purchase
equipment
W2: The possible differences in
the manufacturing scale of farms
in two markets. Dutch farms are
normally industrial farms of a
large size and large scale in
production. Vietnamese farms are
still relatively small-scale.
76
upgrading with higher technologies.

O2: The market is still narrow, to
some extent. If they find their way
to Vietnam very soon, Dutch
companies still can enjoy the first
comer position in the market.
O3: The growth of the Vietnamese
horticultural sector is forecast to
accelerate in coming years due to
the increase in exporting and
domestic demand.
O4: Supply of higher technology
machinery and equipment is
dominated by foreign suppliers.
6.5
T2: It is not always easy to

identify distributors. Sometimes,
its a long process for both sides
to get to know each other and
build up trust.
Distribution Channels for

agricultural/horticultural/agro processing and
packaging equipment to Vietnam
The most common type of distribution channel in Vietnam involves

traders, distributors/agents and direct sales through branch offices.
Sometimes, with large projects conducted by big companies, end users
may also use contractors (Engineering Company/Installation Company) to
procure their FPP equipment.
Diagram 5: Equipment Distribution Channels
Foreign manufacturer
Via Locally based

traders/agents
Via turnkey contractors
Vietnam customers:
vegetable/fruit/rice
farmers, processing and
packaging companies,
exporting companies in
agricultural products
Direct sales through Local

branch office
77
6.6
Market Entry Strategies for

agricultural/horticultural/agro processing and
packaging equipment to Vietnam
Equipment manufacturers can use the help of local distributors, agents or

traders to supply their equipment to the end users. Another method is to
set up sales office. The most popular option is to appoint a reliable
distributor, who knows the market and the industry well to identify good
sales and build up trust from customers. These distributors should be
capable of also providing consultation, design, installation, repair and
maintenance services and after-sales services for the equipment. After
being appointed a distributor, the company then can establish its own
network of agents within the region. (See Annex 14 Doing business in
Vietnam for more information on how to invest/open representative
offices/expand into the Vietnamese market, legal entities, basic tax
system, business tips)
The manufacturer will then also provide training and a useful manual and
installation guide to the distributors so that they can familiarise
themselves with the products. It is important to understand local business
and procurement practices. Some other activities to promote the brand
names could include:
6.7
Working with national trade associations to organise product

introduction seminars (see Annex 2),
Participating in regional/ local trade shows (see Annex 1)
Sending representatives to business meetings with prospective
national/ regional partners (see Annex 6)
CBI and partnering associations can organise seminars on Dutch

technologies in the sub-sectors equipment and technologies. Seminars are
for Vietnamese distributors and customers to familiarise themselves with
Dutch equipment brand names and identify suitable technologies for the
Vietnamese market. Seminars should be organised together with meeting
programmes for potential Vietnamese distributors (see Annex 6), end
users (medium and large processing and packaging companies) and key
agricultural exporters.
In addition, Dutch companies providing agro processing and packaging
equipment/technologies can also exhibit in Propak Vietnam from 4-6
March 2014 Trade fairs on post-harvest and food technology,
processing and packaging industries. The main area of focus for
exhibition extends to all related processing, handling and packaging
industries, from pharmaceutical and healthcare to chemical and cement.
Dutch companies could exhibit and organise a Holland Pavilion in the trade
fairs.
Dutch companies also can get further support from other organisations as
78
companies to obtain support on the Vietnamese market, and also Annex 2

List of supporting organisations in promising sectors.
companies Agriculture to look for possible useful contacts for their
business expansion into the Vietnamese market.
79
Oil and gas
Over the last two decades, Vietnam has emerged as an important oil and
natural gas producer in Southeast Asia. Oil and gas contributes taxes of
up to 18-20% of the state budget per annum and generates revenue up to
nearly 30% of the GDP.
Vietnam is a promising energy market from both the supply and demand
side. From the supply side, Vietnam possesses large natural mineral
resources. Vietnam ranks third in proven oil reserves in the Asia Pacific
region and is ranked seventh in gas reserves. Besides, strong domestic oil
and gas demand and fast-growing refining capacity have shown Vietnam
as an attractive upstream and downstream market for exporters,
importers and manufacturers in the Asia Pacific region.
The upstream oil sector is also commonly known as the exploration and
production (E&P) sector.
The midstream sector involves the transportation (by pipeline, rail, barge,
or truck), storage, and wholesale marketing of crude or refined petroleum
products.
The downstream sector commonly refers to refining petroleum crude oil
and processing and purifying of raw natural gas.
7.1
Upstream and Midstream
7.1.1
Reserve potentials
According to OGJ (Oil & Gas Journal) and statistics from the US Energy
Information Administration (EIA), Vietnam ranks third in the Asia Pacific
region in terms of proven oil reserves with 4.4 billion barrels by end 2012
after China and India.
Figure 11: Vietnam proved oil reserve (1992 2013)
Vietnam Proved Oil Reserves

(billion barrels)
Vietnam Proved Oil Reserves (billion barrels)
5
4
3
2
1
0
Source: US Energy Information Administration statistics
There are also a large confirmed amounts of natural gas and associated
gas of 24.7 trillion cubic feet (Tcf) by end 2012, up from 6.8 Tcf in 2011.
80
Increased foreign investment since 2007 has led to greater exploration,

significantly increasing Vietnam's proved natural gas reserves.
Figure 12: Vietnam proved natural gas reserve (1991 2013)
Vietnam natural gas proven reserves (trillion cubic

feet)
Vietnam natural gas proved reserves (trillion cubic feet)
30
25
20
15
10
5
Source: US Energy Information Administration statistic
Vietnam's efforts to intensify the exploration and development of its

offshore fields have contributed to the growth in reserves. Ongoing
exploration activities could increase this figure in the future, as Vietnam's
waters remain relatively underexplored. About 100 hydrocarbon-bearing
prospects have been found in 50 fields with estimated reserves of
approximately 643 million tons of crude oil and 680 billion cubic meters of
natural gas. There are 6 operational oil and gas basins in Vietnam,
namely:
Song Hong Basin

Phu Khanh Basin
Cuu Long Basin
Nam Con Son Basin
Malay Basin (Malay Tho Chu Basin)
Tu Chinh Vung May Basin
There are 2 more basins in the East Sea namely Truong Sa basin group
and Hoang Sa basin. These basins have not yet been explored. The two
basins which show the most hydrocarbon potential and accommodate
most of the exploration and production activities are Cuu Long (80%) and
Nam Con Son.
81
Map 2: Major Oil and gas Basins in Vietnam
Source: Petro Vietnam Corporation
7.1.2
Exploration and production
Vietnam ranked third in Southeast Asia after Malaysia and Indonesia and
thirty-first in the world for crude oil and gas production in 2012.
According to Petro Vietnam:
Crude oil output:
16.7million tons (increase 11.6% compared
with 2011)
Natural gas output: 9.3 billion cubic meters (decrease 10.2%
compared with 2011)
LPG production:
800 thousand tons (increase 26.3% compared
with 2011)
Fuel production:
6,804 thousand tons (increase 11.2%
compared with 2011)
82
In 2012, Vietnam exploited 290 million tons of oil and 80 billion

cubic meters of gas.
By 2014, Vietnam will provide 4.19% of the Asia Pacific regions
supply.
Figure 13: Vietnam Oil Production and Consumption (1990 2012)
Vietnam Oil Production and Consumption

Vietnam total oil production (thousand barrels per day)
Vietnam oil consumption (thousand barrels per day)
450
400
350
300
250
200
150
100
50
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Specifically in terms of gas production: Vietnam produced 272 billion cubic

feet (Bcf) of dry natural gas in 2011, all of which was domestically
consumed. The country is currently self-sufficient in natural gas, but
PetroVietnam predicts that there will be a natural gas supply gap of 1.3
Bcf per day by 2025 as demand surpasses supply.
The Vietnamese government has considered importing liquefied natural
gas (LNG) in the future to meet growing natural gas demand.
PetroVietnam Gas (PV Gas) has signed a memorandum of understanding
and a front-end engineering and development (FEED) contract with the
Tokyo Gas Company to develop the Thi Vai LNG terminal in the Vung Tau
province.
83
Figure 14: Vietnam Gas Production and Consumption (1990 2012)
Vietnam Gas Production and

Consumption (1990 2012)
Vietnam natural gas production (billion cubic feet)
Vietnam natural gas consumption (billion cubic feet)
400
300
Production = Consumption
200
100
0
1980198219841986198819901992199419961998200020022004200620082010
Vietnam produced about 49,079 thousand short tons of coal in 2011, of

which almost half (23,739 thousand short tons) was domestically
consumed. Vietnam exports a large portion of its coal and also imports a
small amount. In 2013, the Vietnamese government increased the coal
export tax to 13 percent from 10 percent to reduce exports and satisfy
growing energy demand with domestic production, particularly in the
power sector. Electricity consumption nearly quadrupled from 22 billion
kilowatt hours (KWh) in 2000 to 86 billion KWh in 2010 and was
generated almost entirely by hydropower, natural gas, and coal. Vietnam
anticipates power demand to more than triple to 330 billion KWh by 2020.
On the demand side, as Vietnam has continued to industrialise and
increase higher power capacities, consumption doubled from 176,000
bbl/d in 2000 to 388,000 bbl/d in 2012. It is forecast to increase 5-7%
yearly to 2014; demand will be approximately 460,000b/d by 2014.
Vietnam oil and gas exploration and production also partially supply to
domestic demand and contribute a great deal towards export and import.
Vietnam is a net exporter of crude oil, but is a net importer of oil products.
With oil consumption, the country must import a majority of refined
products to satisfy demand.
Vietnam has boosted exploration activities, allowed for greater foreign
company investment and cooperation in the oil and gas sectors, and
introduced market reforms to support the energy industry. These
measures have helped increase oil and gas production.
84
7.2
Downstream
PetroVietnam is planning to develop 3 refinery-petrochemical centres in

the North, South and Central Vietnam. So far, Vietnam has one operating
refinery called the Dung Quat refinery which came on stream in 2010,
with a capacity of 148 KBPD (thousand barrels per day), meeting around
30% of local demand. PetroVietnam owns 100% of this refinery with Frech
Technip as the EPC contractor, using UOP technology. PetroVietnam is
looking to boost crude distillation capacity to around 200KBPD by 2017
and develop Dung Quat's ability to handle sweet and less expensive sour
crude oil from Russia, the Middle East, and Venezuela. Vietnam plans to
offer 49 percent of Dung Quat's equity to foreign investors in order to
finance the expansion of Dung Quat.
The other two planned centres, Nghi Son Refinery ($5.8bn, 200 KBPD) in
the Centre, and Long Son Refinery ($7-8bn, 200 KBPD) in the South are
under preparation. There are some financial and land clearing issues that
have prevented the completion of these refineries.
With the Nghi Son Refinery in the Thanh Hoa province in the North of
Vietnam, PetroVietnam established a JV in 2008 with Kuwait Petroleum
International (KPI 25.1%), Japanese refiner Idemitsu Kosan Co.
(35.1%) and Mitsui Chemicals (4.7%). The total investment is EUR 5.11
billion. The project owners are working to select the EPC contractor and
construction is expected to start by the end of 2013. Nghi Son Refinery
and Petrochemical complex will be able to process 8.4 million tons of
crude oil per year when it is completed in 2014. It is expected that Dung
Quat Refinery, along with Nghi Son Refinery will be able to supply 60% of
domestic demand by 2016.
Another oil refinery slated to be built soon is the Long Son refinery and
petrochemical complex in Ba Ria-Vung Tau Province. The Long Son
refinery needs investment capital of EUR 5.84 billion and will be able to
refine 10 million tons of crude oil per year. Two local partners, PVN and
Vinachem, have been negotiating with foreign partners including Thailandbased TPC and SCG about setting up a joint-venture. Companies from
Qatar and Japan (Itochu) have also shown interest.
Apart from these oil refinery projects which have received investment
from PetroVietnam, there are several others which have received
investment by private companies and which are ongoing or under
development such as Can Tho Refinery (2 million metric tonne per annummmtpa), Vung Ro Refinery (4 mmtpa), Nam Van Phong Refinery (10
mmtpa), and Petroleum Authority of Thailand (PTT PLC) refinery project in
Binh Dinh province (EUR 20.95 billion)).
PetroVietnam is also involved in downstream activities via various
subsidiaries such as Petechim and PetroVietnam Oil Processing and
Distribution Company (PV Oil).
85
7.3
Sector organisation
The Vietnamese oil and gas industry is dominated by the state owned
Vietnam Oil & Gas Corporation (PetroVietnam). PetroVietnam is the key
company in the oil and natural gas sectors and serves as the primary
operator and regulator of the industry. PetroVietnam comes under the
authority of the Ministry of Industry and Trade (MOIT).
Oil and natural gas production is either undertaken by PetroVietnam's
upstream subsidiary, PetroVietnam Exploration and Production (PVEP),
through PetroVietnam's joint ventures with other companies (JVs) or
through production sharing contracts (PSCs) in which the national oil
company (NOC) has at least a 20% equity interest. International Oil
Companies (IOCs) such as ExxonMobil, Chevron, and Zarubezhneft must
receive approval from the Prime Ministers Oil and Gas Department and
must negotiate upstream licenses with PVEP if they want to join in with
Vietnamese oil exploration and production.
So far, regarding oil exploration and production, Petrovietnam has
signed more than 80 Production Sharing Contracts (PSC), Business
Cooperation Contracts (BCC), Joint Venture (JV) and Joint Operating
Contracts (JOC) with more than 50 international oil and gas companies.
The total contract values are over EUR 10.22 billion. Currently, 58
contracts remain effective, involving international companies such as
SOCO, Premier Oil, Salamander Energy, BP, RVO Zarubezhneft,
ConocoPhilips, Nippon Oil, Petronas Carigali, OMV, Idemitsu, KNOC,
Talisman, Amerada Hess, Samedan, Pertamina, PTT E&P, ONGC,
Maurel&Prom, ATI and Vamex.
Regarding oil distribution, Petrolimex is the primary company in charge
of importing and distributing petroleum products in Vietnam and accounts
for about 60 percent of the country's total petroleum distribution market.
Petrolimex also operates 300 miles of petroleum product pipelines,
although much of the country's fuel supply is transported by road. Two
other state-owned fuel oil distributors in Vietnam are PV Oil and Saigon
Petro. There are plans to eventually sell equity stakes in Petrolimex and
provide greater competition for the domestic market. So far, only 3
percent of the company's shares have been sold off in a partial
privatisation to Vietnamese buyers.
Regarding gas production, the situation is the same as the oil sector, i.e.
PetroVietnam dominates the natural gas sector. PetroVietnam's main
foreign partners involved in the production and development of natural
gas resources are TNKBP, Chevron, KNOC, Gazprom, Petronas, Thailand's
PTTEP, Talisman, ExxonMobil, Total and Neon Energy. Chevron is likely to
become a major gas producer in Vietnam following the development of
fields in the Malay basin in south eastern Vietnam. Other IOCs such as BP
and ConocoPhillips recently divested their upstream assets in the Nam Con
Son basin, allowing other firms to purchase the shares. Shell has also
expressed interest in entering Vietnam's upstream and downstream
86
natural gas markets, including liquefied natural gas (LNG), and is in the
process of signing a memorandum of understanding with the country.
PetroVietnam and Gazprom formed a strategic JV, Vietgazprom, which is
now exploring undeveloped natural gas fields in both countries.
Regarding gas distribution, PV Gas is the major gas distribution arm of
PetroVietnam. PetroVietnam and its JV partners directly negotiate
domestic gas rates with power generators and industrial users on a
project-by-project basis. Natural gas prices are kept generally low
compared to international market rates mainly because wholesale
electricity prices remain low. Transportation costs vary by gas pipeline and
are approved by the Ministry of Industry and Trade. As Vietnam's gas
market evolves and LNG enters the market, gas prices may lift to more
market-average rates.
7.4
Regulatory environment
According to the National Strategy for Energy Development in 2007,

Vietnams energy policy is to improve oil and gas capacity to serve
domestic demand and contribute to export.
Only PetroVietnam and its subsidiaries can conduct exploration activities
as primary contractor. However PetroVietnam can directly negotiate with
foreign corporations in many different kinds of cooperation. Decree 115 in
2009 listed the entities which are allowed to join the Vietnam oil and gas
industry.
Together with exploring new offshore basins, Vietnam encourages foreign
investment to the industry in different activities upstream, midstream and
downstream. Decree 115, together with Petroleum Law 2008, and
Petroleum Bidding Regulation 2001, clarified the investment process,
bidding regulations, licensing process and tax issues.
Currently, the Vietnamese government and particularly the Ministry of
Finance manage a so-called Fuel Price Stabilisation Fund to support
wholesale and retail petrol distribution companies. This fund helps oil
distributors to absorb the losses when they distribute to the local market
as retail and wholesale oil prices are controlled by the government and are
lower than international market prices. The policy to control the prices is
to sustain a growing economy and manufacturing industry. Decree 84 in
the oil and gas industry has implemented minor reforms which allow petrol
retailers to increase prices by 7% within 30 days when international prices
increase by the same rates.
7.5
SWOT analysis
Strength
S1: Dutch companies have a good
reputation in the offshore
equipment and maritime industry.
Weakness:
W1: This is the sector which
requires long-term planning and
frequent visits to the market to
87
build up a strong relationship with

local companies in the sector.
With some key projects, it
requires appropriate lobbying as
well. This is a challenge for foreign
companies in general, in terms of
entering the market.
Opportunities:
O1: Vietnam has strong reserves
and production processes in the oil
and gas sector; this creates high
demand in equipment and
technology in upstream oil and gas.
O2: Vietnam is also starting to
focus on the downstream area with
projects involving the construction
of refineries. This is a big
opportunity for supplying
downstream equipment and
technology.
O3: The Vietnamese government is
open for cooperation with foreign
investors and equipment suppliers.
7.6
Threats:
T1: Hard competition from other
equipment suppliers in the
market. They may already know
Vietnam quite well and have good
connections with key players.
Market entry
For opportunities linked to the supply of equipment and services, foreign

companies are advised to enter the market through selecting local
distributors or agents or opening representative offices. These distributors
and agents or chief representatives have extensive local knowledge and
networks and are able to support the foreign companies to enter oil and
gas projects through direct selling or bidding. (See Annex 14 Doing
business in Vietnam for more information on how to invest/open
representative offices/expand into the Vietnamese market, legal entities,
basic tax system, business tips).
For investment opportunities, the recommendation is to partner with
PetroVietnam and/or other local or foreign oil and gas companies which
have been operating in Vietnam. If companies want to invest in exploring
oil and gas blocks, they must go through a bidding process managed by
PetroVietnam.
As the Vietnamese oil and gas industry is a large but narrow industry
with only some key players in the market, foreign companies that want to
enter Vietnam should make market visits to meet with key players, obtain
market information and set up relationships before making any concrete
moves. Besides, its also beneficial for foreign companies to get the
support from high level governmental organisations through missions to
visit the Vietnamese market.
88
7.7
Opportunities for Dutch companies in the Oil and

gas sector
Vietnams expanding offshore exploration and production has created a

steadily growing market for supplying offshore oil and gas equipment and
services and consultancy services, which were estimated at EUR 2.56
billion in 2013. Sales opportunities for Dutch companies are in the
following areas:
Oil and gas equipment (not only turbines), accessories, chemical,

services for the upstream, midstream and downstream segments
Offshore enhanced oil recovery
Deep-water technology development such as drilling
Seismic surveying for oil and gas exploration
Engineering, construction and production facilities
Drilling and production technologies, including drilling rigs (70200m)
Oil spill management
Training and education in all aspects of the industry
Health safety and environmental waste management
Under its WTO commitments, the Vietnamese government has also

opened its oil and gas sectors to foreign companies. This will help Vietnam
to gain support in terms of capital, expertise and technology for the
industrys development. PetroVietnam plans to focus on the five crucial
areas:
Petroleum exploration, exploitation,
Oil refining,
Gas
Electric industries,
High quality petroleum services.
Key projects: According to Vietnams Oil and Gas Master Plan Toward
2015 and Vision to 2025, the industry will require an investment of EUR
148.19 billion up to 2025 (PetroVietnam will contribute a 40% share, i.e.
EUR 59.52 billion). There are also big opportunities in investments in the
industry, and in terms of joining partnerships with PetroVietnam along
upstream, midstream, downstream activities. PetroVietnam is working to
promote key projects below:
Upstream: There are opportunities in exploring a number of
undiscovered blocks in Song Hong Basin, Phu Khanh Basin,
Onshore Mekong Delta, Nam Con Son Basin, Phu Quoc Basin,
Malay-Tho Chu-Phu Quoc Basin
Song Hong Basin Blocks 101 & 100/04
Song Hong Basin Blocks 108/04 & 116
Song Hong Basin Blocks Hanoi Trough (MVHN), MVHN-01KT &
03KT
89
Phu Khanh Basin Blocks 122 & 124

Onshore Mekong Delta (DBSCL) Blocks DBSCL-01, 02, 03 & 04
Nam Con Son Basin Block 06/94, 22/03
Phu Quoc Basin Blocks 31, 32, 33, 34, 35 & 36/03
Phu Quoc Basin Block 37, 38, 41, 43, 44 & 47/01
Malay Tho Chu Phu Quoc Basin Block 48/05
Midstream: PetroVietnam is calling for investment in Nam Con

Son No. 2 Gas Pipeline (EUR 0.95 billion), Ca Mau Gas Processing
Plant (EUR 511.00 million), East-West Gas Connection Pipeline
Project, etc
Nam Con Son 2 Gas Pipelines: The Nam Con Son-2 gas pipeline project
includes a 334 km offshore pipeline connecting gas fields in the Nam Con
Son Basin, offshore southern Vietnam, with an onshore gas processing
plant in the southern province of Ba Ria - Vung Tau. The gas plant will
take 20 million cubic meters of natural gas per day from Hai Thach - Moc
Tinh and Thien Ung Mang Cau fields in the Nam Con Son basin to
process condensate and liquefied petroleum gas (LPG). The pipeline is also
planned to transport imported gas from other ASEAN countries in
response to demand in the Southeast area of Vietnam. This EUR 0.95
billion project is expected to be operational in 2015.
East-West Gas Connection Pipeline Project: This 30 inch-diameter pipeline
will connect Nam Con Son 2 Gas Pipeline with the ASEAN gas supply
network. The capacity is 3.0 bcm (Phase 1) and 7.6 bcm (Phase 2). The
project is at the basic design and investment report stage.
Downstream: PetroVietnam is calling for investment in Refinery

and Petrochemical projects such as the Dung Quat Refinery
(Expansion) Plant (EUR 292 million), Long Son Refinery (EUR 5.84
billion), Ca Mau Fertiliser Plant (EUR 657 million), etc
Dung Quat oil refinery expansion: this project will cost EUR 2.19 billion to
increase the existing oil refinery capacity to 10 million tons per year by
2018 and includes petrochemicals.
Long Son oil refinery and petrochemical complex: This oil refinery and
petrochemical complex in Ba Ria-Vung Tau Province needs investment
capital of EUR 5.84 billion and will be able to refine 10 million tons of
crude oil per year. Two local partners, PVN and Vinachem, have been
negotiating with foreign partners including Thailand-based TPC and SCG
about setting up a joint-venture. Companies from Qatar have also shown
interest. PVN is still looking for strategic foreign partners and the
commercial operation would be expected to start after 2020.
90
Van Phong Oil Refinery: a new oil refinery in Khanh Hoa Province is
developed with the investment of EUR 3.65 million to refine 10 million
tons of crude oil per year.
Thi Vai LNG receiving and re-gasification terminal: this facility will be built
in Cai Mep Industrial Zone, Ba Ria-Vung Tau province using the utilities of
LPG storage project and Jetty of Thi Vai Port with a capacity of 1 million
mtpa. This project developer is working on the Front End Engineering
Design (FEED) and additional geological survey for FEED. The investment
capital is approximately EUR 180 million and the project is expected to
come into operation in late 2015.
Son My LNG receiving and re-gasification terminal: this facility will be built
in Binh Thuan province with the capacity of 3mmtpa in the initial phase
and is expected to be operational at the end of 2018.
7.8
Dutch equipment suppliers can attend and exhibit at Oil & Gas Vietnam
(OGAV) 2014 - oil and gas event in Vietnam for both upstream and
downstream oil and gas companies and also its supporting industries 21
23 Oct 2014 in Vung Tau oil and gas area in Vietnam.
The mission of Dutch equipment suppliers can also visit governmental
officials and key players in the Oil and gas sector (see Annex 8 Key
contacts in Oil and gas industry in Vietnam).
The mission should also visit potential distributors in Vung Tau (oil and
gas industry areas) and Ho Chi Minh City.
Dutch companies wanting to enter Vietnam should make market visits to
meet with key players to obtain market information and set up
relationships before making any concrete moves (see Annex 8 Key
contacts in Oil and gas industry in Vietnam). Besides, it is also beneficial
for foreign companies to get the support from high level governmental
organisations through missions to visit the Vietnamese market.
91
Equipment and machinery for the

autonomous manufacture of means of
transport such as bicycles, mopeds,
baby carriages etc.
The sector was identified in step 1 of the Analysis to be a promising

sector. There may be interest from Dutch companies to export equipment
and machinery to Vietnam. However, there is not much interest from
Vietnamese companies for Dutch equipment in the sector. Likewise, there
are only some bicycle manufacturing companies thinking about exporting.
The export market is still very limited.
There are possible opportunities for Dutch companies to collaborate with
Vietnamese companies as supporting industries for the car and vehicle
manufacturing sectors.
The Vietnamese domestic markets for personal means of transport are
shared among: motorcycles (nearly 80%) and cars, mass transportation,
bicycles.
The car manufacturing sector in Vietnam is not developed; it has

only just reached the assembly level for international brands.
Therefore, technologies and equipment for those companies should
be imported in line with the requirements of international branded
manufacturers. Normally the equipment should originate from the
manufacturers countries. There are no opportunities for Dutch
companies in this segment.
The bus/coach manufacturing sector in Vietnam is also at a very
low level. There are 9 manufacturing companies in the sector
however their manufacturing capacities are not high enough to
purchase Dutch machinery or equipment. They mainly assemble for
some Japanese coach companies, such as Isuzu or Suzuki. Some
other Vietnamese brand names such as Vinaxuki, Thaco (Truong
Hai) may be interested in Dutch equipment but in practice this is
unlikely as they are more familiar with Japanese technologies in
the sector. The domestic market is dominated by Japanese,
Taiwanese, and Chinese buses or second-hand buses from
advanced countries.
Bicycle manufacturing sector: the domestic market for bicycles is
quite small. Besides, Vietnamese bicycles have lost some key big
markets (Hanoi, Hochiminh, Da nang) to foreign bicycles
(especially Japanese and Taiwanese bicycles). The bicycle
manufacturing sector is therefore very weak. Some Vietnamese
bicycle manufacturers have strategies to develop the technologies
to increase their competitiveness. However, their capital is
insufficient to afford Dutch equipment. They mainly consider
92
technologies from regional countries such as Japan or Taiwan or

Malaysia.
In conclusion, there may be only slight interest from bus/coach
manufacturers in Dutch equipment (around 3-5 companies only).
However, it also depends on the price of the equipment. The market is
thus very small to consider a mission of distributors to Vietnam at this
stage. If there is interest from Dutch companies to identify end-users or
distributors, there are only around 3-5 end-users in this market (List of
companies is in Annex 9).
Next step recommendations:
There is no activity to be recommended as there are no clear opportunities
from the Vietnamese market for supplying equipment and machinery for
the manufacture of means of transport. If there are individual enquiries
from Dutch companies, a tailored meeting programme for them with a few
end-users should be effective enough (see Annex 9).
Dutch companies which are interested in working with industries that
support car/automobile manufacturing can also refer to MTA Vietnam
from 8-11 July 2014 in Ho Chi Minh City. This is the 12th International
Precision Engineering, Machine Tools and Metalworking Exhibition and
Conference (Annex 1 List of Vietnamese trade fairs in promising
sectors).
93
Annex 1 - List of Vietnamese tradefair in

promising sectors
No
1
Trade Fair
NEPCON
Vietnam 2014
Industry sectors
Electronics
Date/Venue
Electronic
9 11 Oct 2014/Ho Chi Minh
City
www.nepconv
ietnam.com
2
METALEX
Vietnam 2014
Metalworking
9 11 Oct 2014/Ho Chi Minh

City
www.metalex
vietnam.com
Vietnam
Manufacturing
Expo 2014
Mechanical/support
ing industries
2. Mechanical
27 29 August 2014/Hanoi
Describe
Vietnams only exhibition of
SMT & Testing Technologies
and Supporting Industries for
electronics
manufacturing 7th Edition
Vietnams International
Exhibition on Machine Tools &
Metalworking Solutions for
Production Upgrade
8th Edition
The most comprehensive

machinery and technology
event in manufacturing and
the supporting industries
www.vietnamm
anufacturingexp
o.com
2
MTA Vietnam
2014
www.mtavietna
m.com
Linkage
Metalworking
Metal & Weld
Metalworking/supp
orting
industries/mechani
cal
8 11 July 2014 in Ho Chi

Minh City
Machine tool and

Automation
Metal Cutting Machine Tools,

Metal Forming Machines,
Production and Process
Automation
Metalworking
industry
Technology/Machinery/Engine
ering/Automation/Other/Cons
truction/Building/Architecture
This is the 12th International

Precision Engineering,
Machine Tools and
Metalworking Exhibition and
Conference.
Linkage Vietnam focuses on
industrial automation,
metalworking, as well as
electricity engineering and the
energy industry. Its the most
anticipated and largest trade
fair in Vietnam, introducing
state-of-the-art equipment
and technologies. This
customised one-stop-shop
exhibition will include
injection moulding machines,
circular looms and bag
making machines, bottle blow
moulding machines, several
packaging machines, food
processing machines,
numerous printing machines
and various rolls.
International Exhibition on
Metalworking & Welding
Technology Vietnam is a
professional forum to create
opportunities for local and
international metal and
welding enterprises displaying
new products and
technologies.
94
Vietnam Motor
show
Automotive
industry
An exhibition for the

automobile industry,
automotive supporting
industries, spare parts
companies and firms from
other related fields.
Saigon
Autotech &
Accessories
Automobile
industry
All kinds of automobile and

motorcycle products and
products from corresponding,
supporting industries.
Vietnam Expo
Transportation/Log
istics/Supply Chain
Management,
Technology/Machin
ery/Engineering/Au
tomation/Other
Vehicles & Spare parts:

Bicycles,
electric
bicycles;
Motorcycles; Auto & auto
parts
Machinery & Electronics
Machinery & Equipment;
Construction machinery;
Chemical products;
Electronic
&
Electrical
products;
Computer & Communication
products;
Consumer electronics;
Handtools & Hardware
Electrical
Technology &
Equipment
Vietnam ETE
Electrical
www.cisvietn
am.com.vn
Propak
Vietnam 2014:
www.propakviet
nam.com
Processing and
Packaging
3. Electrical
16 19 Jul 2014/Ho Chi Minh
City
Vietnam Motor Show is the

most highly anticipated
automobile event of the year.
The exhibition attracts the
participation of the most
prestigious automobile brands
available in Vietnam and
promises to bring consumers
a wide range of choices.
Saigon Autotech is a unique
professional and large-scale
exhibition with a total
displaying area of thousands
of square metres. The Show
is expected to attract a huge
number of domestic and
overseas enterprises,
displaying and introducing
their technological products,
accessories, spare parts,
services to the Vietnam
Automobile/Motorbike
Industry and Supporting
Industries
This exhibition covers the four
main displaying areas, e.g.
International Pavilions. It
covers Machinery Electronics, Vehicles - Spare
Parts and Home Living and is
believed to provide
Vietnamese and overseas
enterprises further
opportunities to use the highquality products from
companies throughout the
world.
The 7th International

Electrical Technology &
Equipment Exhibition
Many leading brands and

enterprises in the electrical
industry and electrical
equipment fields in the
country participate in Vietnam
ETE. It is the largest
specialised electrical
technology and equipment
event in Vietnam.
4. Agricultural equipment
4 - 6 March 2014/Ho Chi Minh Trade fairs focussing on postCity
harvest and food technology,
industries. ProPak Vietnam is
an international processing,
filling and packaging
exhibition and conference for
95
Food pack
Vietnam 2014
Processing and
Packaging
26 28 June 2014/Ho Chi

Minh
Plastic, packaging,
printing
technologies
Blow Moulding Machinery

Chemicals and Raw materials
Coating compounds,
Extruders and extrusion lines
Extruders, Printing Machinery
Heat and Control equipment
hydraulic and pneumatic
Injection Machinery
Laboratory
Machinery auxiliary industry
Moulds & Dies
Parts & Accessories
Plastic & Rubber Processing
Machinery
Professional publications
rubber goods
Raw Materials
Recycling machine
Semi-Finished & Finished
Products
http://www.
machineryvietnam.com/
3
VietnamPlas
The
International
Plastics &
Rubber Industry
Exhibition.
VnPackPrint
The
International
Packaging &
Printing
Industry
Exhibition
VnPrintLabel
The Vietnam
International
Print & Label
Industry
Exhibition.
VnFoodtech
The Vietnam
International
Food Processing
&
Pharmaceutical
Industry
Exhibition.
Oil & Gas

Vietnam
(OGAV) 2014
www.oilgasvietn
am.com
Vietship
Oil Exploration, Oil

Industry,
Petrochemicals
Logistics, Marine,
Shipbuilding,
Shipping,
Transportation
5. Oil & Gas

21 23 Oct 2014 in Vung Tau
Financing proposals,
maintenance technologies,
materials for shipbuilding,
offshore facilities, ship repair
products, shipbuilding
equipment, shipyard facilities,
...
Vietnams rapidly expanding

manufacturing sectors for
food, pharmaceutical,
beverage, cosmetic, industrial
and general consumer
products.
Food Pack Vietnam is an
exhibition related to the food
processing industry in
Vietnam.
Exhibition attended by
companies from Australia,
Belgium, China, Germany,
India, Indonesia, Italy, Japan,
Korea, Malaysia, Netherlands,
Singapore, Turkey, Taiwan,
Thailand, UK, and Vietnam
taking up around 450 booths
every year.
The exhibition is organised by
Ministry of Industry & Trade Vietnam National Trade Fair &
Advertising Joint-stock
Company, and Yorkers Trade
& Marketing Service co. Ltd.
The show benefits from the
cooperation of Chan Chao
International Co. Ltd., Paper
Communication Exhibition
Service, Vietnam Plastics
Association (VPA), Vietnam
Rubber Association (VRA) and
Vietnam Printing Association
(Vinaprint).
Oil and gas event in Vietnam

for both upstream and
downstream oil and gas
companies and the supporting
industries
Vietship is an international
trade fair for shipbuilding and
marine technology. The
Vietship is a communication
and information platform in
the industry and offers the
exhibiting companies the
opportunity to present
themselves to a professional
audience. They expect
96
Inmex
Vietnam
Marine,
Shipbuilding,
Shipping
Dredging, marine equipment,

marine offshore technology,
ocean engineering, port
equipment, port technology,
ship repair, shipbuilding,
underwater robotics, ...
thousands of visitors,
international public and
private organisations and
hope to attract lucrative new
business deals. Visitors can
find in-depth and
comprehensive information
about the latest
developments, trends,
services and products in the
field of shipbuilding and
marine technologies.
Thousands of professional
visitors will be expected from
public and private
organisations from Vietnam
and abroad. There will be
opportunities to form
promising and lucrative new
business relations and
partnerships.
97
Annex 2 - List of supporting organisations in

promising sectors
No
Name
Ministry of
Industry and
Trade Institute
for Industrial
Policies and
Strategies (IPSI)
Vietnam Chamber
of Commerce and
Industry (VCCI)
Embassy of the
Kingdom of the
Netherlands in
Vietnam
Address
Website
Telephone
Ministries/Trade promotion organisations
R.801, 23 Ngo
www.ipsi.org.vn
+84 4
Quyen Str., Hoan
39369593
Kiem, Hanoi
9 Dao Duy Anh St,

Hanoi, Vietnam
Or 171 Vo Thi Sau,
Dist 3, Hochiminh
City, Vietnam
Daeha Office Tower,
6/Fl, 360 Kim MA
St, BA Dinh Dist,
Hanoi, Vietnam
www.vccihcm.org.vn
+84 4
35742022
www.hollandinviet
nam.org
+84 8
39320033
+84 4
38315650
Email
Saigon Tower, Suite

901
29 Le Duan
Boulevard, District
1, Ho Chi Minh City,
Vietnam
Embassy of the
S.R of Vietnam
261 Laan van Nieuw

Oost-Indie
2593 BR The
Hague, The
Netherlands
Saigon Hi-Tech
Park (HTP)
Vietnam Electronic
Industries
Association
Lot T2-3, D1 Road

Saigon Hi-tech
Park, Dist 9, HCMC
11B Phan Huy Chu
Str., Hanoi
Hochiminh City
Association of
Mechanical
Engineering
(HAME)
Vietnam
Association of
Mechanical
Industry (VAMI)
Vietnam Steel
Association
3
4
Vietnam
+31 643498835
Electronic
www.shtp.hochimi
nhcity.gov.vn
www.veia.org.vn
Mechanical
291 Dien Bien Phu
Str., Dist. 3, HCMC
F.2 21 story Tower,

124 Minh Khai Str.,
Ha Ba Trung Dist.,
Hanoi
91 Lang Ha Str.,
Dong Da Dist.,
Hanoi
401 room, 37 Trang
+84 8 3736
0293
+84 4 3933
2845
+84 8 3842
9329
www.vami.com.v
n
+84 4 3936
8503
www.vsa.com
+84 4 3514
7245
www.vami.com.v
+84 4 3936
98
vphh@vami.com.
vn
vphh@vami.com.
Mechanics
Development
Consultancy
Center
Vietnam
Automation
Association (VAA)
Vietnam
Electrotechnical
Industry
Association
Electric Wire and
Cable Association
Hochiminh City
(HECA)
The Vietnam
Gardening
Association
(VACVINA)
Vietnam
Petroleum
Institute (under
Vietnam national
oil and gas group)
Thi Str., Hoan

Kiem, Hanoi
8503
vn
105 Hoang Van Thai http://www.auto

Str., Thanh Xuan,
mation.org.vn/
Hanoi
Electrical
P.302, building
www.velina.org
CTM, 299 Cau Giay
Str., Hanoi
+84 4 2215
7058
tudonghoa@hn.v
nn.vn
+84 4 2220
1520
velina@fpt.vn
70-72 Nam Ky Khoi

Nghia Str., Dist.1,
HCMC
+84 8 3829
9443
Agricultural equipment
58 Nguyen Binh
Khiem Str., Dist.1,
HCMC
4 Nguyen Thong
Str., Dist 3, HCMC
Oil & Gas

www.pvpro.com.v
n;
www.vpi.pvn.vn
+84 8 3829
6098
vacvinas@vnn.vn
+84 8 3930
3323
info@pvpro.com.
vn;
pvpro@vpi.pvn.v
n
99
Annex 3a - interview results electronic

manufacturing companies
Quantitative analysis - Analysis of market expansion plans in next
3-5 years for Vietnamese trading/manufacturing companies in
Metalworking
Electronic companies: Interviews with 63 companies which are
members of VEIA
1a. What sectors correspond to your companys core businesses?
1b . To which sectors do you supply your products?
(Answer the open question and tick one or more answers for the multiple
choice questions as appropriate)
Electronic companies: In 63 interviewed electronic companies, which
are members of VEIA, 42 companies (66%) are involved in trading
consumer electronic products in the market and repairing and installing
electronic equipment for (mainly) consumer use with some industrial use.
The remaining 33% of companies manufacture computer, electronic and
optical products. Around half of the manufacturing companies interviewed
are companies that involve foreign investment (joint ventures). There is a
worrying trend that is seeing small and medium-sized Vietnamese
companies in the industry, due to lack of capital and technological
capacity, switching from manufacturing to trading. Another reason for this
is that current tax policies, according to interviewees, are more
advantageous for manufacturers with foreign investors than they are for
local ones. Under investment law, and commitment from AFTA, companies
with foreign investors can enjoy extensive income tax exemptions and
flexibility from customs authorities when they import equipment/materials
for manufacturing.
33% of the companies manufacture/assemble for the electronic appliance
and industrial machinery sectors. Some can supply to both.
There are only 5 Vietnamese electronic manufacturing companies that
supply their own products (under their own brand names), the remaining
Vietnamese manufacturers only assemble for EMSs or ODMs.
100
Agro and
food
2
3
4
5
6
7
8
Manufacture of
fabricated metal
products, except
machinery and
equipment
Manufacture of
computer, electronic and
optical products
Manufacture of electrical
equipment
Manufacture of
machinery and
equipment
Manufacture of motor
vehicles, trailers and
semi-trailers
Manufacture of other
transport equipment
Repairs and Installation
of machinery and
equipment
Architectural and
engineering activities;
technical testing and
analysis
Others
Horticulture
Automotive
Consumer
appliances
Industrial
machineries
20
15
High-tech
systems
and
materials
Energy
42
2. Does your company engage in international business in one or some of the areas mentioned below? (Answer
the open question and tick one or more answers for the multiple choice questions as appropriate)
3a . From which countries does your company currently import/export/outsource products or parts or receive
investment? Choose one or more answers.
3b . What products/parts does your company currently import/export/outsource and what investments do you
receive from the selected countries?
101
Others
Electronic companies: Of the 42 companies involved in trading consumer electronic products in the market,
most import mainly from US, Japan, Korea, Malaysia, Thailand, Taiwan, UK, China, Hong Kong - for consumer
electronics and office electronics, i.e. smartphones, laptops, printers, PCs, hard disks, etc. One company can
supply different brand names to domestic markets.
Most of the companies which are manufacturing computer, electronic and optical products, assemble EMSs and
ODMs from Japan, Malaysia, Thailand, Korea, Taiwan. They assemble electronic parts for the consumer
electronics, electronic appliance and industrial machinery sectors. Some can supply to both.
There are only 5 Vietnamese electronic manufacturing companies that supply their own products (under their
own brand names). They export consumer electronics, e.g. infrared cookers, amplifiers, karaoke systems, to
Cambodia, Laos, Mianma, Cuba.
None of the interviewed companies exports or outsources to European countries.
import of products
or parts thereof
export of products
or parts thereof
Outsourcing/captive
outsourcing
activities such as
(parts of)
production and/or
service (sales,
repair etc.) abroad
invest in companies
abroad
US
Japan
22
26
ASEAN
countries
15
Europe
Australasia
36
18
20
Specific
markets
US, Japan,
Korea,
Malaysia,
Thailand,
Taiwan, UK,
China, Hong
Kong
Cambodia,
Laos, Mianma,
Cuba
Japan,
Malaysia,
Thailand,
Korea, Taiwan.
102
Specific
products
Consumer
electronics and
office
electronics:
smartphones,
laptop, printers,
PC, hard disk
Consumer
electronics:
infrared cooker,
amplifiers,
karaoke system
Electronic parts
for consumer
electronics
4. Does your company have plans to expand imports from/ exports to, outsourcing to or investment in
international markets in the next 3-5 years? (Multiple answers possible)
5a . Does your company plan to expand its exports or outsourcing activities to any or some of the countries
below in the next 3-5 years? (Choose one or more answers)
5b . Why are you planning to expand exports or your outsourcing activities to specified markets?
..
Electronic companies: Vietnamese trading companies in the electronics sector are willing to have more trading
partners to bring new brand names to the market. US and Japanese products are most welcome. They are open
to trade more European products in general and Dutch products in particular as they are sure product quality
from Europe is guaranteed and corresponds to good brand names. They do not have special awareness of specific
products or brand names from Netherlands. Electronic products where they see good potential for domestic
markets include consumer electronics and industrial electronics, such as testing equipment.
Regarding electronic manufacturing companies, all of the interviewed companies want to expand their markets in
the next 3-5 years however most of them dont have a clear strategy on what markets to penetrate and what
steps to follow in market expansion. They passively follow the market trends and rely on contracts with existing
customers. The Japanese and US markets are very large and influential in terms of Vietnamese companies. Local
companies normally try to join the value chain of Japanese companies. Once they successfully achieve an initial
contract, opportunities will be open for them to access other customers in the same markets. The business
development division in these electronics companies only manage relationships with existing customers; they do
not yet focus on exploring new markets.
Europe is a relatively new market to electronic manufacturing/assembling companies. None of the companies
interviewed exports or outsources to any countries in Europe. Local companies dont yet have any practical
market information on Europe and especially the Netherlands; they do however characterise European markets
as having high requirements in terms of technologies and strict quality control standards which they feel would
be hard to follow. Some companies, which supply their product brand names to consumers and currently only
export to Cambodia, Lao, Cuba, Myanmar, do not consider Europe to be a target market in the next 3-5 years,
however they would like to know more about the market if possible.
103
Alongside the companies which do not have a clear strategy in market expansion, some others are clear in their
vision to expand to Europe (as assemblers) and enthusiastic about getting to know the Dutch market better.
yes , in import
activities;
42
42
ASEAN
countries
15
yes , in
outsourcing
activities;
12
15
yes , in export
activities;
yes , in
receiving
investment;
do not know
(Continue with
question 6)
US
Japan
Europe
Ho
20
16
Specific
markets
US, Japanese
products are
most
welcomed.
Trading
companies are
open to
trading more
European
products in
the
US, Japanese,
Dutch, Finnish
markets
Expand in the
same markets
Cambodia,
Laos, Mianma,
Cuba
Why
Consumer
electronics;
industrial
electronics such
as testing
equipment.
Companies
welcome
opportunities to
outsource to
new markets if
they have
opportunities to
approach these
markets.
The
manufacturing
capacity can
only meet
requirements
from existing
markets
6. In terms of factors that are significant within expertise of international business, please evaluate the
importance of each factor (rating them from 1 5, from less important to very important).
104
Electronics companies: There are some factors that Vietnamese electronics companies consider very
important, including the local tax and regulatory environment; customs policies and procedures; technological
innovation within the new market; supply chains; intellectual property rights; identifying suitable business
partners; knowledge of the new market and technical standards and norms.
Both manufacturing and trading companies consistently emphasise the importance of local tax and regulatory
environments and customs policies and procedures because these factors strongly influence business.
Vietnamese electronic manufacturing companies currently suffer many difficulties as a result of the local tax
regime and customs. Companies with foreign investors are granted income tax exemptions, preferential land
policies for large investment and rapid support in customs procedures. Local companies, however, are not offered
similar advantages and this leads to high manufacturing costs for local products.
In terms of market expansion, electronic companies value three factors: identifying suitable business partners;
knowledge of the new market; technical standards and norms. These are also areas where Vietnamese
companies lack information. They need support in terms of new market information on market demand, technical
standards required and the business-matching approach.
Companies also consider the supporting industry to be very significant for the development of Vietnamese
electronics. Currently, the Vietnamese supporting industries are very young and fragmented and this adds to
Vietnams disadvantaged position compared to other countries. In other markets, such as Malaysia and Thailand,
the cost of manufacturing is lower than Vietnam as they can source parts for the electronics industry locally and
with reasonable prices. Meanwhile, in Vietnam, nearly all parts are imported from Malaysia or Thailand, leading
to high costs and delays in the manufacturing schedule
No
1
2
3
4
5
6
7
8
9
10
Factors
Global trends
Political and social climate
Local tax and regulatory environment (Vietnam)
Customs policies and procedures
Legal and regulatory systems for the new market
Innovation
Location and infrastructure
Cultural compatibility/language adaption
Labour market conditions
Supply chain development
Mean
3.190476
3.634921
4.68254
3.746032
2.904762
4.047619
2.777778
2.920635
2.952381
3.539683
Standard Deviation
0.644008
0.48532
0.469227
0.80258
0.755929
0.633184
0.728331
0.768358
0.727979
0.758296
105
Median
3
4
5
4
3
4
3
3
3
3
11
12
13
14
15
16
Intellectual property
Living cost
Identifying suitable business partners
Knowledge of the new market
Technical standards and norms
Others: supporting industry
3.47619
1.984127
4.460317
4.492063
4.444444
4.285714
0.644008
0.832642
0.502426
0.503953
0.500895
0.455383
3
2
4
4
4
4
7. Do you or your company normally receive support from governmental (Vietnam or foreign) trade-promoting
organisations, associations, or chambers of commerce, such as FME-CWM, NL Agency, CBI, Koninklijke
Metaalunie, etc?
Electronics companies: Most trading companies do not receive support from governmental organisations when
they expand their network with foreign business partners (39 answers rarely and never are mainly from
trading companies or companies with foreign investors). The remaining companies have received support from
different governmental organisations such as Jetro (The Japan External Trade Organization), Jica (Japan
International Cooperation Agency), Kotra (Korea Trade Investment Promotion Agency), VCCI (Vietnam
Chamber of Commerce and Industry), ITPC (Investment and Trade Promotion Center), Taiwan Excellence and
trade departments within the embassies or consulates of foreign countries in Vietnam.
Options
always (Continue with question 8a)
usually (Continue with question 8a)
sometimes (Continue with question 8a)
rarely or never (Continue with question 9)
do not know (Continue with question 9)
1
2
3
4
5
Answers
2
12
10
39
8a . For what activities do you receive support from such organisations?
Business matchmaking in many functions such as receptions, meetings;

Support at exhibitions, trade fairs;
Technical support in manufacturing;
Training in production processes.
8b. Are you generally satisfied or dissatisfied with the support provided by these organisations?
8c. What can be improved in terms of the support provided by these organisations?
106
Electronics companies: Some companies (42%) are satisfied and very satisfied with the support as either the
support is relevant to their businesses or they are open to every opportunity for expanding their networks.
Some companies (58%) dont have specific comments on the support as they think the support is not really
relevant to the real business situation.
What can be improved in the support of
these organisations?
1
2
3
very satisfied, (Continue with question 9)

satisfied (Continue with question 9)
neither satisfied nor dissatisfied (Continue
with question 8c)
2
8
14
The support should be more practical and

relevant to businesses
Some courses are not applicable
Too many meetings which do not lead to genuine
results
4
5
dissatisfied (Continue with question 8c)

very dissatisfied (Continue with question
8c)
9. Have you/your company ever considered doing business (import/export/outsourcing) with or receiving
investment from the Netherlands?
10. Are there any particular reasons why you have never considered the Netherlands?
11. If you are considering or already doing business with or in Netherlands, what are your general views on the
Dutch market?
Electronics companies: Most companies (86%) welcome opportunities to be connected with Dutch markets if
they have the support or relevant information. According to trading companies views, the Netherlands is a high
technology market which will offer many trading opportunities to Vietnamese markets. According to
manufacturing companies, the Netherlands with its high-tech requirements will offer manufacturing companies
many opportunities to upgrade and learn.
Some other companies (14%) dont want to expand to the Netherlands in a timeframe of 3-5 years because they
think that the products are inadequate to approach Dutch markets; Dutch markets are part of the European
107
market so technology requirements are too high for their companies.

Are there any particular reasons
why you have never considered the
Netherlands?
1
no (Continue with question 10)
If you are considering or already

doing business with or in the
Netherlands, what are your general
views on the Dutch market?
Products made by the companies are

inadequate for Dutch markets.
Dutch markets are part of Europe so
technology requirements are too high
for their companies to access.
The current focus is on other markets.
yes; (Continue with question 11)
54
Companies welcome opportunities to be

connected with Dutch markets if they
have support or the relevant
information.
The Dutch market is a high-tech market
which will offer many trading
opportunities to Vietnamese markets.
The Netherlands, with its high
technology requirements, will offer
manufacturing companies many
opportunities to upgrade and learn.
12. Would you like to get information about the Netherlands for further expansion in the future?
13. What kind of information would you most like to receive?
Electronics companies: All of the companies that want to expand their business relationships with the
Netherlands would like to receive information about Dutch markets. They need:
More information on market demand

Information on technology requirements
Information on companies with a genuine interest in Vietnamese companies
108
Response options
1
yes (Continue with question 13)
What kind of information would you most like

to receive?
Technology requirements
Companies with genuine interest in

Vietnamese companies
54
14. If you have concrete plans to expand to, or do business with companies from the Netherlands, would you like
to receive support from organisations working for the trade, such as NL Agency , CBI , FME - CWM and
Metaalunie ?
1
2
3
Response options:
Yes
No
Maybe
50
4
109
Annex 3b - List of interviewed companies - Electronics

No
Company
Sao Kim Electronics JSC
VIMETCO,.JSC
C.TECH CO, LTD
Vinasino Electrical
Equipment JSC
ETS Electronic Co., ltd
VNPT TECHNOLOGY
Mach In Mai Hung Co., ltd
Phuc Loc Electronics Co.,

ltd
Thivanlabs
Address
178/18 Phan
Dang Luu
Phu Nhuan,
HCMC
S 20A/5 .Hong
Quc
Vit,Dist.C
u Giy,H
Ni,Vit
Nam.
Web
124 Hong
Quc Vit
Cau Giay,
Hanoi
248A, N
Trang Long,
P. 12, Dist.
Bnh Thnh,
Tp. H Ch
Minh
54 Lot M,
Str. 3A, C
X Bnh
Thi, W. 8,
Dist 11, Tp
HCM
40/8 Trn
Quang Diu,
W. 14, Dist
3, TP. H
Ch Minh,
Vit Nam
Email
http://www
.saokim.vn/
+84
37517733
saokim@saokim.vn
http://www
.vimetco.co
m.vn
04.66.727.42
4/
04.66.749.33
2
sale@vimetco.com.
vn
(08)
38337792
vo3000@gmail.co
m
36 Trn Ph,
W. 4, Dist.
5,Tp. H Ch
Minh
(TPHCM)
L H.08,
Str.1,
Khu Cng
Nghip Long
Hu, Huyn
Cn Giuc
Tnh Long
An.
S 4 Ng
595/5
ng Lnh
Nam Hong Mai H Ni
Tel
www.vinasi
no.vn
08438734630;
08438734631;
08438734632
info@vinasino.vn
http://dient
uets.vn
04
667.563.99
dientuets.ltd@gmai
l.com
http://viva
s.vn/index.
php/contact
43.7480921
contact@vivas.vn
(08)
35165720
www.phuclo
caudio.com.
vn
http://thiva
nlabs.com
08. 2215
0269
0918699361
thivanlabs@gmail.c
om
110
Note
Vietnam Mechanical
electronic JSC
12/1 - ng
898 Str
Lng, W
Lng
Thng,
ng a, H
Ni.
http://www
.nangluong
vadieukhien
.com
http://www
.invt.org.vn
(04) 3 2595
370
Thun Pht IMOSO JSC
Km 27,
Highway
Lng- Ha
Lc
http://ww
w.thuanpha
t.com
462956935
Khai Tri JSC
67- 69 Cch
Mng Thng
8, Dist 1,
HCM
http://www
.khaitri.com
.vn
13
Minh Vit JSC
72, Ngch
95/8, Cha
Bc, ng
a, HN
14
Huetronics JSC
5-7 Hong
Hoa Thm,
Thnh ph
Hu
Viettronic Da nang JSC
181-185
in Bin
Ph, Thanh
Kh,
Nng
Hi Huy JSC
7 Nguyn
Tri, Dist.
Ninh Kiu,
TP. Cn Th
http://www
.haihuy.co
m
http://www
.haihuy.net
(84-71) 825
455
haihuycorp@haihu
y.com
17
POSTEF JSC
61 Trn Ph,
Dist. Ba
nh, TP. H
Ni
http://www
.postef.com
(84-4) 845
5946; 823
4128
postef@hn.vnn.vn;
contact@postef.co
m.vn
18
Cng ty TNHH Mt thnh

vin in t Sao Mai
27 Hong
Sm, Ngha
, Cu
Giy, H Ni
(84-4) 756
4183; 756
4699
mschn@fpt.vn
19
VIETCOM Company
18 Nguyn
Ch Thanh,
Ba nh, TP.
H Ni
(84-4) 834
4665 /
7715126
vninfor@hn.vnn.vn
vifcom@vnn.vn
GVECO Company
168 Ngc
Khnh,
Qun Ba
nh, TP. H
Ni
(84-4) 835
4363; 834
5479
gveco@hn.vnn.vn;
gvecokd@fpt.vn
10
11
12
15
16
20
thanhtuyencdc@ya
hoo.com
(84-8) 3844
5343 / 9
256 169
nkhaitri@hcm.vnn.
vn
http://www
.minhviet.c
om.vn
(84-4)
3972 1550
office@minhviet.co
m;vnautomation@
minhviet.com.vn
kinhdoanh@minhvi
et.com.vn
www.huetro
nics.vn
(84-054)
826 081
huetronics@dng.vn
n.vn;info@huetroni
cs.vn
(84-0511)
3659183/84
(511)
830421823801
vtrdanang@dng.vn
n.vn
111
21
22
Vnh Trinh Co., ltd
94 Trn
Quc Ton,
Qun Hon
Kim, TP.
H Ni
http://www
.vinhtrinh.c
om.vn
(84-4) 942
3558
support@vinhtrinh.
com.vn
info@vinhtrinh.com
.vn
BDC JSC
61 Th
Nhum,
Qun Hon
Kim, TP.
H Ni
http://www
.bdc.vn
(84-4) 825
4771; 826
8430
bdc@fpt.vn;sales@
bdc.vn
www.misa.c
om.vn
(84-4)
762.7891
/1900 8677
Sales@misa.com.v
n;support@misa.co
m.vn
http://www
.mitec.com.
vn
(84-4)
6.2734 616
lanmitec@hn.vnn.v
n
headoffice@mitec.c
om.vn
http://www
.vishipel.co
m.vn
(84-031)
842 073/
(+84-31)
3746464 /
3569136
vishipel@hn.vnn.vn
;contact@vishipel.c
om.vn
truyenthong@vishi
pel.com.vn
Nh I,
Khch sn
La Thnh,
218 i
Cn, Ba
nh, H Ni
Floor 2,
Building 381
Ph i Cn,
Phng Liu
Giai, Qun
Ba nh, H
Ni, Vit
Nam
2 Nguyn
Thng
Hin, Qun
Hng Bng,
TP.Hi
Phng
23
MISA JSC
24
Cng ty CP ng dng Tin

b Khoa hc - Cng ngh
(MITEC)
25
Cng ty TNHH MTV Thng

tin in t Hng Hi VN
(VISHIPEL)
26
Cng ty CP in t Hi
Phng (HAPELEC)
73 in Bin
Ph, Qun
Hng Bng,
TP Hi
Phng
http://www
.hapelec.co
m.vn
(84-031)
745 383
hapelec@hn.vnn.v
n;hapelechp@vnn.
vn
27
Trung tm cng ngh

phn mm TP. H Ch
Minh
(Thuc Cng ty in t
Tin hc Si Gn)
200 V Vn
Tn, Qun
III, TP. H
Ch Minh
http://www
.ssp.com.vn
(84-8) 834
1018
hhien@chm.vnn.vn
;sales@ssp.com.vn
28
Cng ty CP in t Bin
Ho
52-54
Nguyn Hu,
P. Bn
Ngh, Qun
1, TP. H
Ch Minh
http://www
.veic.com.v
n
(84-8) 829
8100 /
8296 017
belcohcm@hcm.vn
n.vn
29
Cng ty Cng ngh Thng

tin Genpacific
391A Nam
K Khi
Ngha, Qun
3, TP. H
Ch Minh
http://www
.genpacific.
com.vn
(84-8) 848
3255
gpc@genpacific.co
m.vn;gpc@hcm.vn
n.vn
Tn Thnh Co., LTD
Tng 5, 1416 Hm
Long, P.
Phan Chu
Trinh, Q.
Hon Kim,
HN
(84-4) 945
4058
tran_huu@hn.vnn.
vn;sale@tanthanh.
vn
30
112
X nghip T doanh in
t TQT
42 Trn
Nht Dut,
TP Nha
Trang, tnh
Khnh Ho
http://www
.tqtbroadca
st.com
(84-058)
871
155/(+8458)
871155,
874399
tqt@dng.vnn.vn
CNG TY TNHH PHT

TRIN CC CNG NGH
IN T CNG SUT
Tng 2, Ta
nh 6 tng,
Km2+500
Phan Trng
Tu, Thanh
Lit, Thanh
Tr, H Ni.
http://powe
rtech.com.v
n/?u=cnt
(04)
37931642
powertech@hn.vnn
.vn
Cng ty C phn Bng n

in Quang
125 Ph
Hm Nghi,
P. Nguyn
Thi Bnh,
Q. 1, HCM
http://www
.dienquang.
com
(08-8) 8
290 135
info@dienquang.co
m
34
4P Co., LTD
a ch: Vnh
Khc- Vn
Giang- Hng
Yn
www.4p.co
m.vn
(84) 3213
729 317
4pcompany@4p.co
m.vn
hoangminhtri@4p.c
om.vn
35
Cng ty C phn Tp on
IDC
17 L Nam
, Qun Ba
nh, TP. H
Ni
in thoi :
(84-4) 3823
4905; 747
2090
sales@idc.com.vn
welcome@idc.com.
vn
36
Cng ty C phn Thit b

Hng Hi ( MECOM )
30 Hm
Nghi,
Phng Bn
Ngh, Qun
1, TP. HCM
http://www
.mecom.co
m.vn
(84-8) 8213
639
mecom@hcm.fpt.v
n
hcm@mecom.com.
vn
37
Viet An JSC
Lot A5,
Phung IZ,
Dan Phuong
Ha noi
http://vietan.vn
04 3363
5443/5/6
viet-an1@vietan.vn
38
X nghip T doanh in
t TQT
42 Trn
Nht Dut,
TP Nha
Trang, tnh
Khnh Ho
http://www
.tqtbroadca
st.com
(84-058)
871
155/(+8458)
871155,
874399
Tng Cng ty C phn

in t v Tin hc Vit
Nam (VEIC)
15 Trn
Hng o,
Qun Hon
Kim, TP.
H Ni
197 Nguyn
Th Minh
Khai,
P.Nguyn C
Trinh, Qun
I, TP.HCM
http://www
.veic.com.v
n
(84-4) 3825
6404; 8 255
197
31
32
33
39
http://www
.idc.com.vn
veic@hn.vnn.vn
113
40
Cng ty TNHH My tnh

CMS
Tng 13,
CMC Tower,
L C1A cm
sn xut
tiu th
cng nghip
va v nh,
Cu Giy H
ni
41
Cng ty TNHH Mt thnh

vin HANEL
2 Cha Bc,
Qun ng
a, TP. H
Ni
http://www
.hanel.com.
vn
(84-4) 3852
4555; 572
5174
42
Cng ty in t Tin t
405 in
Bin Ph,
Phng 4,
Qun III,
TP. H Ch
Minh
http://www
.tiendat.vn
(84-8) 839
8757/8359
412
tiendataudio@hcm.fpt.vn
43
Cng ty CP in t Tn
Bnh (VTB)
248A N
Trang Long,
Qun Bnh
Thnh, H
Ch Minh
http://www
.vtb.com.vn
(84-8) 3516
3885
vtb@saigonnet.vn
Cng ty CP in t Bnh
Ho
204 N
Trang Long,
Qun Bnh
Thnh TP.
H Ch Minh
http://www
.viettronicsbinhhoa.co
m
(84-8) 843
2472 / 843
2458
binhhoaco@hcm.fp
t.vn
vbh@viettronicsbinhhoa.com
45
Cng ty TNHH Sn Phm

Cng ngh FPT
a ch: S 5
o Duy
Anh,Phng
Lin, ng
a, H Ni.
http://fptpr
oduct.com.
vn
(84-4) 3
73007575
46
Cng ty TNHH TMDV Tin

hc Anh Phng
104 Nguyn
Tri, Qun
1, HCM
www.anhph
uong.com.v
n
(84-8)
39250199
aptrading@hcm.vn
n.vn
aptrading@anhphu
ong.com.vn
47
Cng ty CP u t Pht
trin Cng ngh ROBO
25 Phm
Vit Chnh,
Qun 1,
HCM
http://www
.robo.com.v
n
(84-8) 39
253 709
robocorp@robo.co
m.vn
08 35886496
catvanloi@vnn.vn
(84-8) 865
3978
phuthohoa@hcm.fp
t.vn
44
http://www
.cms.com.v
n
48
Cng ty thit b in CN
Ct Vn Li
504 Le
Quang Dinh,
Go Vap
http://catva
nloi.com/gi
oi-thieuthiet-bidien-catvan-loi.html
49
Cng ty C phn C kh
in t Ph Th Ho
(VIEMCO)
1026B Lu
Bn Bch,
Phng Ho
Thnh, Q.
Tn Ph, H
Ch Minh.
http://viem
co.com
nphai@cms.com.vn
hanel@hanel.com.v
n
114
Cng ty CP Xut Nhp

khu in t Vit
(VIETTRONIMEX)
74-76
Nguyn Hu,
Qun 1, TP.
H Ch Minh
http://viettr
onimex.com
.vn
(84-8) 829
8201
viettronimex@hcm.
vnn.vn
51
TIE JSC
52 Thnh
Thi,
Phng 12,
Qun 10,
Tp. H Ch
Minh
http://www
.tie.com.vn
(84-8) 833
0855
tie@saigonnet.vn
52
Hung Dung Co., ltd
km42 Hai
Duong
www.hungd
unghd.com.
vn
0320 378
2396
hd1@hungdunghd.
com.vn
53
Thanh Long
Electronic production JSC
Hap Linh IZ,

Bc Ninh
P105 Nh
B7-KTT
Thanh Xun
bc, Thanh
Xun, H
Ni
http://www
.thanhlongp
cb.com.vn
0241 3720
668
04 3629
0660
54
Equipment and
Technology CEVT JSC
Village 2,
Van Phuc,
Thanh Tri,
Ha Noi
http://www
.cevtjsc.com/
Thanh Long Electronic

production JSC
Industrial
cluster Hap
Linh - Bac
Ninh City Bac Ninh Vietnam
http://www
.thanhlongp
cb.com.vn/
EN/
(+84)241.3720
668
dientu@thanhlongp
cb.com.vn
http://www
.v-nc.com.vn/H
ome/Congty
/TuyenDung
/tabid/98/la
nguage/viVN/Default.
aspx
(08) 3950
6666
info@v-n-c.com.vn
http://www
.haidang.co
m.vn/
(84-8) 3863
21 59 (6
lines)
haidang@haidang.
vn
http://www
.elinco.vn/e
n/
84.4
38350021;
069.556446
elinco@elinco.com.
vn;
50
55
56
VIET NHAT Electronics

Corporation
57
Hai Dang Co., ltd
58
ELINCO Co., ltd
21 K Ha,
Phng 11,
Qun 5,
Tp.HCM
666/64/30
Ba Thang
Hai St., Dist.
10,
Hochiminh
City,
Vietnam
19 Ph
Hong Sm
- Phng
Ngha Qun Cu
Giy H
ni
115
59
60
61
62
Thai Son Technology

development Co., LTD
B1 Tui trHong Quc

Vit - Cu
Giy-H Ni.
http://www
.thaison.vn/
webs/users/
default.aspx
04.37545222
Power Electronic
Technology Co., ltd
Tng 2, Ta
nh 6 tng,
Km2+500
Phan Trng
Tu, Thanh
Lit, Thanh
Tr, H Ni
http://powe
rtech.com.v
n/index.asp
x
04.
37931642
anhnh@powertech.
com.vn
Binh Anh Electronics Co.,

ltd
S 62, ng
88/61, ph
Gip Nh, P.
Thnh Lit Hong Mai H Ni
http://binha
nh.com/
(84-4) 3 642
5008
binhpt@binhanh.co
m
FSC Company
Tng 1, Ta
nh 3B, Ph
Phng Lit,
Thanh Xun,
H Ni
http://fsc.v
n/gioithieu/gioithieuchung.aspx
04.3868
8809
info@fscvietnam.co
m
116
Annex 4a interview results electrical equipment manufacturing

companies
Electrical equipment companies: Interviews with 45 companies which are members of VELINA or HECA or
VAMI and some other companies
(Answer the open question and tick one or more answers for the multiple choice questions as appropriate)
Electrical equipment manufacturing companies: Forty-five companies were interviewed; these are mainly
members of VAMI, HECA and VELINA. All companies interviewed are manufacturing companies. They supply to
consumer homes and/or for industrial uses. Their products vary widely, from electrical wires, cables and
transformers to electrical equipment such as boards, boxes and panels.
Response options
2
3
4
5
6
Manufacture of
fabricated metal
products, except
machinery and
equipment
Manufacture of
optical products
equipment
Manufacture of
machinery and
equipment
semi-trailers
transport equipment
Agro and
food
Horticulture
Automotive
Consumer
appliances
Industrial
machineries
High-tech
systems
and
materials
40
10
117
Energy
Others
7
8
Repairs and installation

of machinery and
equipment
Architectural and
analysis
Others
Electrical equipment manufacturing companies: Of the 45 companies, around one-third do not yet export,
they currently only supply to domestic markets. Some of them supply to foreign value chains domestically. Some
of the export markets for the remaining companies are Laos, Cambodia, Myanmar, Philippines, Indonesia, the
US, Japan, Latin America and the Middle East.
1
2
import of products or
parts thereof
export of products or
parts thereof
Outsourcing/captive
outsourcing activities
such as (parts of)
production and/or
US
Japan
ASEAN
countries
Europe
Australasia
Specific
markets
Specific
products
20
Laos,
Cambodia,
Myanmar,
Philippines,
Indonesia, US,
Japan, Latin
America,
Middle East.
Mainly electrical
wires and
transformers,
electrical boxes
and panels
Outsourcing
activities
concern
electrical high118
service (sales, repair

etc.) abroad
invest in companies
abroad
tech products
4. Does your company have plans to expand imports from/exports to, outsourcing to or investment in
..
Electrical equipment manufacturing companies: The target export markets in which to expand differ for
smaller companies with limited exporting experience and larger companies which have an export background.
The US is promising and encompasses companies which already have exporting experience. Some Asian
(Myanmar, Laos, Philippines, Indonesia, Thailand) and African markets have great potential and are accessible
for companies with limited export experience.
US
1
2
3
yes , in import
activities
yes , in
outsourcing
activities
yes , in export
activities
Japan
ASEAN
countries
Europe
Australasia
Specific
markets
Why
25
The countries
to which many
companies
would like to
expand
include the
US, Asia
(Myanmar,
Laos,
Philippines,
Indonesia,
The US looks
promising, with
companies
which already
have exporting
experience.
2
8
119
Some of the
Asian and
African markets
have great
Thailand) and
Africa
(Nigeria).
potential and
are accessible
for companies
with limited
export
experience.
yes , in
receiving
investment
do not know
(Continue with
question 6)
importance of each factor (rating them from 1-5, from less important to very important).
Electrical equipment manufacturing companies: There are some factors that Vietnamese electrical
equipment manufacturing companies consider very important, e.g. the local tax and regulatory environment,
customs policies and procedures, technological innovation in the new market, legal and regulatory systems in the
new market, location and infrastructure, identifying suitable business partners, knowledge of the new market and
technical standards and norms.
Besides the prominent factors that influence company business, such as tax, customs and technological
innovation, one further, important factor is the infrastructure in the new market. This is due to the fact that the
electrical equipment manufacturing supplies sector depends on the different demand from the various
infrastructures in each relevant market.
Two more factors that companies believe to be very significant for development are supporting industry and
material input prices, and the requirements of the new market.
No
1
Factors
Global trends
Mean
3.8
Standard Deviation
0.814639
Median
4
3.955556
0.824499
4.155556
0.638021
120
4.355556
0.570309
4.488889
0.505525
Innovation
4.044444
0.705677
4.355556
0.48409
2.177778
0.386646
2.955556
0.73718
10
2.777778
0.420437
11
3.133333
0.726135
12
13
Living cost
2.4
4.377778
0.495434
0.49031
2
4
14
4.177778
0.833636
15
4.155556
0.767391
16
4.222222
0.794552
17
Others: input material prices and requirements
4.177778
0.7772
Metaalunie, etc?
Electrical equipment manufacturing companies: Most companies dont receive support from governmental
organisations (55%), the remaining companies (45%) receive support from different governmental organisations
such as Jetro (The Japan External Trade Organization), Jica (Japan International Cooperation Agency), Kotra
121
(Korea Trade Investment Promotion Agency), VCCI (Vietnam Chamber of Commerce and Industry) and the
trade departments within the embassies or consulates of some foreign countries in Vietnam.
Options
1
2
3
4
5
Answers
2
6
12
25
Business matchmaking in many functions such as receptions, meetings

Technical support in manufacturing
Training in production processes
Directories of companies in sector
Electrical equipment manufacturing companies: Some companies (42%) are satisfied and very satisfied
with the support as either the support is relevant to their businesses or they are open to every opportunity for
expanding their networks.
Some companies (58%) dont have specific comments on the support as they think the support is not really
relevant to the real business situation and not durable:
The support lacks consistency and durability; it usually takes place on a one-off basis.
Achieved no real results so far in terms of business figures.
The support is not relevant to the companys development. Company needs real business partners.
122
What can be improved in the support of

these organisations?
1
2
3

with question 8c)
5
15
The support lacks consistency and durability; it

usually takes place on a one-off basis.
Achieved no real results so far in terms of
business figures.
The support is not relevant to the companys
development. Company needs real business
partners.
4
5

very dissatisfied (Continue with question
8c)
11. If you are considering or already doing business with or in the Netherlands, what are your general views on
the Dutch market?
Electrical equipment manufacturing companies: 42% of companies dont consider The Netherlands as part
of their market expansion plans because:
Do not consider The Netherlands at this stage as it is too far away. Do not yet have any market
information.
The companies electrical equipment may not suit the market demands.
The technical requirements could be very high. Companies cannot meet these.
58% companies are willing to consider The Netherlands in their expansion plan as:
Companies welcome opportunities to be connected with Dutch markets if they have support or the
relevant, necessary information.
The Netherlands is a high technology market which will offer many trading opportunities to Vietnamese
markets.
123
The Netherlands, with its high technology requirements, will offer manufacturing companies many
If there is support from the Dutch government, the process will be efficient so the companies will think
about expanding to The Netherlands.
Are there any particular reasons why
you have never considered the
Netherlands?
19
If you are considering or already doing

business with or in the Netherlands,
what are your general views on the
Dutch market?
Dont think about The Netherlands at

this stage as the market is so far away.
No market information yet.
The companies electrical equipment
may not suit the demands of the
market.
The technical requirements could be
very high. Companies cannot meet
them.
26
Companies welcome opportunities to be

connected with Dutch markets if they
have support or the relevant
information.
The Dutch market is a high-tech market
which will offer many trading
opportunities to Vietnamese markets.
The Netherlands, with its high
technology requirements, will offer
manufacturing companies many
Electrical equipment manufacturing companies: All of the companies that want to expand their business
relationships with The Netherlands would like to receive information about Dutch markets. They need:
124

Information on technology requirements
Information on companies with a genuine interest in Vietnamese companies
Information on next mission to Vietnam
Response options
What kind of information would you most like

to receive?
Technology requirements
Companies with genuine interest in

Vietnamese companies
Next mission
26
Metaalunie ?
1
2
3
Response options:
Yes
No
Maybe
26
125
Annex 4b - List of interviewed companies - Electrical

equipment
No
Company
Web
Tel
Email
Vietnam Electric Cable

Corporation
70-72 Nam
K
Khi Ngha,
Q.1, HCM
http://www
.cadivivn.com
08 3821
4732/
38292971
(ext:1133)
Tan Cuong Thanh Electrical Wire

Cable Corporation
426-430
Nguyn Tri,
Dist..5, HCM
http://ww
w.tancuong
thanh.com.
vn/lienhe.p
hp
08 39236418
Dai Long Cables
D17/26 p
4, inh c
Thin,
Bnh Chnh
www.dailon
gcables.co
m
08 37605
134
dailong@saigonnet.
vn
Tin Thanh Company
D20/532L
Phong Phu
Commune,
Binh Chanh
District,
www.tintha
nh.com
www.tithac
o.com
08 37612
513
sales@tithaco.com
Thinh Phat Company
114 A H
Hc Lm,
W. AN Lc,
Dist.. Bnh
Tn
http://www
.thiphaco.co
m
www.thinhp
hatiz.com
08 38753395
thinhphat@thipha.c
om.vn
Lin t Company
401 An
Dng
Vng, P.3,
Q.5, HCM
http://liend
at.com.vn
08 38 333
782
lidaco@liendat.com
.vn
http://ww
w.cftvietnam.co
m/
061 3833
500
duong@cftvietnam.comm
http://www
.3cengineeri
ng.com.vn/
VN/gioithie
u.html
04.3.864.141
2/
3.664.2037
http://www
.ctbt.vn/
04.3.764.479
5
ctbt@ctbt.vn
http://www
.thibidi.com
.vn/
061.3.836.60
9
sales@thibidi.com
CFT Vina Copper Co., ltd
3C Engineering Co., ltd
Hanoi Transformer
manufacturing and Electric
Material JSC
10
Address
Electrical Equipment Company

(THIBIDI)
CFT, ng
s 9, Khu k
ngh
Bin Ha 1,
ng Nai
27 Dinh
Cong, Hoang
Mai Dist.,
Hanoi,
Vietnam
No. 11 K2 Road Cau Dien Tu Liem
Dist. - Hanoi
09 Street,
Bien Hoa
Industrial
Zone 1,
Dong Nai,
Vietnam
cadivi@cadivi.com.
vn
126
Note
11
Nhat Nuoc Company LTD
12
Van Son Co., LTD
13
Tran Phu Electric Mechanical JSC
14
Tn Ngh Nam Electric Wires

and Cables
15
Thuan Phat Electric Wires and

Cable Co., LTD
16
Viet A Investment Commercial

Industrial Group Holdings
Company
Room 106,
10th Floor,
VIMECO
Build., 9E
Pham Hung
Road, Cau
Giay district,
Ha Noi, Viet
Nam.
S 79 Lc
Trung
Q.Hai B
Trng TP
H Ni
41 Phuong
Liet str. Thanh Xuan
dist. - Ha
Noi
66A, Road
830.
Hamlet 3.
An Thanh
Village, Ben
Luc District
Long An
Provice.
50 Sreet
No.21,
P.Binh Tri
ong B
Ward, Binh
Tan district
Ta nh Vit
, ph Duy
Tn, phng
Dch Vng
Hu, qun
Cu Giy,
TP. H Ni.
04.3784.993
4
kdthuongmai2@nnc.n
et.vn
04.3.622.612
0
vansonimexco@hn.
vnn.vn
http://www
.tranphucab
le.com.vn/
04.3.869.117
3
tranphu@hn.vnn.v
n
www.tangh
enam.com
072 3635
222
tanghenam@tangh
enam.com
www.luckys
tarcables.co
m
08 38
771132
sales@luckystarcab
les.com
www.vieta.c
om.vn
84-437919999 ext
163
vieta@vieta.com.v
n
www.hppetrocable.c
om
054 010 992
http://nhat
nuoc.com/
17
Hong Pht Cables
18B Trn
No,
P. Bnh An,
Q.2
18
Hanoi Electromechanical
Manufacturing JSC
Km12 Highway 32
- Ph Din T Lim Hanoi
www.hem.v
n
04-3765
5510
dienco@hem.vn
19
Vinakip Company
Ward Xun
Khanh Sn Ty H Ni
www.vinaki
p.vn
04-33838033
info@vinakip.vn
20
Ct Vn Li Co., ltd
504 L
Quang nh,
W.1, Dist G
Vp, HCMC
www.catvan
loi.com
(84.8) 3588
6496/ 2246
4699
sales@catvanloi.co
m
127
21
22
23
Taiphaco Electric Wire & Cables

Co., LTD
1092 A,
ng 3
thng 2,
P.12, Q.11
Thnh Cng Company
11/4A Quc
l 1A, x
Tn Quy
Ty,
Bnh Chnh
Dong Giang JSC
37 Nguyn
Sn, Ngc
Lm, Long
Bin, H
Ni.
N199 16th
Street , Binh
Tri ong B
Award, Binh
Tan District,
Ho Chi Minh
City
No. 320
Khuong Dinh
Road, Ha
Dinh Ward,
Thanh Xuan
District,
Hanoi City
www.taiph
aco.com.vn
www.taipha
co.com
08 39622310
taiphacotp@gmail.
com
08 38758
908
pham.thanhcong@
yahoo.com
http://nieng
iamtrangva
ng.com/ad.
asp?URL=ht
tp://donggi
ang.vn
(04) 8
271389
goldcup@ngockhan
h.vn
www.see.co
m.vn
08-3875
1146
seecorp@see.com.vn
www.cadisu
n.com.vn
04-38588565
info@cadisun.com.
vn
24
Saigon Electrical Equipment

Corporation
25
Thuong Dinh Electrical Wires and

Cables JSC
26
Dong Anh
Electrical equipment
manufacturing JSC
26 - Dong
Anh Town Dong Anh
Distric - Ha
Noi
www.eemc.
com.vn
04 3883
3781
SACOMWires and Cables
Bien Hoa I
Industrial
zone, Dong
Nai
province,
Viet Nam
www.sacom
wirecable.c
om.vn
08 35122923
Thu Do Company
15 Khng
H Thanh
Xun H
Ni --
vatlieudien
.1t@yahoo.
vn
(04)
0904637373
thudoeet@gmail.co
m
Sai gon Cable Corporation
Str. 1,
Long Thnh
IZ
ng Nai
Province
www.saigon
cable.com.v
n
061 3514
125/
117/119
scc@saigoncable.c
om.vn
168, Ph
Hu, Q. Hai
B Trng,
H Ni.
http://thien
phugroup.c
om.vn/inde
x.php?optio
n=com_rsfo
rm&view=rs
form&Itemi
d=55
(84-4)
33.765.888
hieunt@thienphugr
oup.vn
27
28
29
30
Thin Ph Group
128
Thu Duc Electro mechanical JSC
Km s 9 Xa L H Ni
- Q.Th
cTp.HCM
32
Gelex Emic
52 L i
Hnh, Hai
B Trng,
H Ni, Vit
Nam
33
EMJ Group
240-242 Tn
c Thng
ng a, H
www.emj.v
n
04-38516453
Dong Hung Company
Quc l 3
Dc T
ng Anh
H Ni
Vit Nam
www.dongh
ung.com.vn
04 39611441
Dai Thanh Hung Co.., ltd
111 Lng
Th Vinh,
P. Tn Thi
Ha,
Q. Tn Ph
08 396
12141
Truong Phong Co., ltd
37 An
Dng
Vng,
P. An Lc,
Q. Bnh Tn
08 38 768
123
Tai Truong Thanh Electric wire

and Cables
B7/150A
Trn i
Ngha, P.
Tn To, Q.
Bnh Tn
79/33 An Co
Str., ward
14, Dist 11
www.taitruo
ngthanh.co
m.vn
08 38770
352
taitruongthanh@y
mail.com
VCOM
x Bnh An,
Huyn D
An,
Tinh Bnh
Dng
www.vcom.
com.vn
0650 3751
501
info@vcom.com.vn
http://www
.khangthinh
electric.com
(08) 5448
9698
thietbidienkhangthi
nh@gmail.com
http://thiet
bidienngocs
on.znn.vn
(0241)
3828170
ngocsonltd@yahoo.
com.vn
31
34
35
36
37
38
39
Khang Thinh Company
40
Ngoc Son Co., LTD
Tng 1, Ta
Nh
PVFCCo, 43
Mc nh
Chi, Phng
a Kao,
Qun 1, Tp.
H Ch Minh
Ha nh,
Phng V
Cng, TP.
Bc Ninh,
Tnh Bc
Ninh
www.codien
td.com
http://gelex
.vn/en/inde
x.php/13/co
ntacts.html
22144647 22144379 22141417
+84 4 3825
7979
admin@emj.vn
129
41
42
43
44
45
351/42
Nguyn
Phc
Nguyn,Q.
Thanh Kh,
Tp Nng
http://www
.phucatloi.z
nn.vn
(0511) 3 727
294
phucatloi2h@gmail
.com
Vina CDs
Vin Ngoi,
ng X,
Gia Lm, H
ni
http://nieng
iamtrangva
ng.com/ad.
asp?URL=ht
tp://www.di
enlanhdiend
andung.co
m
04.3995.818
2;
dienlanhdiendandu
ng@gmail.com
Dien Quang Hue Company
194 Phan
ng Lu Tp Hu
http://www
.dienquang
hue.com/lie
nhe.htm
054 3588668
Cty@dienquanghue
.com
dienquanghue@dn
g.vnn.vn
Linh Chi Company
17 Ng
Thng
Phong, Tn
c Thng,
P. Quc T
Gim, Q.
ng a,
H Ni
(04)
38437169
daydientplinhchi@g
mail.com
Hung Son EQ Company
18/70 Ngc
Khnh,
Ba nh , H
Ni
Phu Cat Loi Co., ltd
http://nieng
iamtrangva
ng.com/ad.
asp?URL=ht
tp://hungso
neq.com.vn
hungsoneq.kd@g
mail.com
130
Annex 5a interview results moulding companies

Moulding companies: Interviews with 42 companies which are members of VAMI or HAME (HO CHI MINH city
association of mechanical engineering) and some other companies.
Moulding companies: The 42 companies interviewed are mainly members of VAMI, HAME; all companies
interviewed are moulding manufacturing companies. They mainly supply to the automotive industry, consumer
homes and/or for industrial uses and hi-tech equipment. Their products are manufactured on a contractual basis,
they do not engage in mass production.
Response options
2
3
4
5
6
7
Manufacture of
fabricated metal
products, except
machinery and
equipment
Manufacture of
optical products
equipment
Manufacture of
machinery and
equipment
semi-trailers
transport equipment
of machinery and
equipment
Agro and
food
Horticulture
Automotive
Consumer
appliances
Industrial
machineries
20
15
12
131
High-tech
systems
and
materials
8
Energy
Others
Architectural and
analysis
Others
Moulding companies: Of the 42 companies, not all of them export; these only outsource activities for foreign
companies inside or outside the market. Some of them have successfully joined the Japanese value chain in
automotive manufacturing and supply plastic injection moulding. The remaining companies supply to the highdemand domestic market.
US
1
2
3
parts thereof
parts thereof
Outsourcing/Captive
such as (parts of) the
production and/or
etc.) abroad
Japan
ASEAN
countries
Europe
29
34
Australasia
invest in companies
abroad
132
Specific
markets
Specific
products
Japan, Korea,
Malaysia, US,
domestic
market,
Norway, the
Netherlands,
Germany,
Moulding for
automotive
manufacturing,
home appliances
and die casting,
moulding for
machinery
..
Moulding companies: Based on the sector characteristics, moulding companies do not proactively market
themselves to new markets. They normally join the value chain and expand their market herein. They are,
however, open for opportunities in the new market. Many companies in the sector are well equipped with high
technology mainly from Japan so they are confident about their ability to produce wide varieties of moulds to
other markets. They would welcome orders from any markets.
1
2
3
4
5
yes , in import
activities
yes , in
outsourcing
activities
US
Japan
ASEAN
countries
Europe
Australasia
Specific
markets
Why
18
35
30
21
12
Companies
welcome
orders from
any markets
The technology
of Vietnamese
moulding is
relatively good;
it can meet the
demand from
many countries.
yes , in export
activities
yes , in
receiving
investment
do not know
(Continue with
question 6) ;
133
Moulding companies: Factors that Vietnamese moulding equipment manufacturing companies consider very
important include innovation, labour market conditions, supply chain development, intellectual property,
identifying suitable business partners, knowledge of the new market and technical standards and norms.
Alongside the key factors mentioned, value chain and labour market are very important because moulding
companies are currently facing shortages in skilled labour. Universities/colleges/vocational schools cannot supply
appropriately qualified resources for the sector. Most companies have to re-train new staff from scratch. Besides,
the value chain is very important because moulding companies can establish a stable position in sales volumes if
they can join the value chain.
Three companies also mentioned Vietnamese land laws which are not favourable and supportive to companies in
the market when they expand their manufacturing bases.
No
1
Factors
Global trends
Mean
3.142857
Standard Deviation
0.566178
Median
3
2.47619
0.505487
3.285714
0.45723
1.666667
0.477119
2.404762
0.496796
6
7
Innovation
3.619048
2.428571
0.491507
0.50087
4
2
4.666667
0.477119
4.166667
0.881149
10
4.452381
0.55005
11
3.52381
0.505487
12
Living cost
2.285714
0.45723
13
4.47619
0.505487
134
14
4.595238
0.496796
15
4.452381
0.503761
16
3.880952
0.705462
17
Others: input material prices and requirements
3.904762
0.790478
Metaalunie, etc?
Moulding companies: Vietnamese moulding has recently been highlighted as a potential sector for
development and Japanese companies and organisations, in particular, such as Jetro and Jica have made a great
deal of effort in terms of supporting Vietnamese moulding companies when they join the moulding value chain.
Many of the companies (74%) therefore receive support from Jetro (The Japanese External Trade Organisation)
and Jica (Japan International Cooperation Agency).
Options
1
2
3
4
5
Answers
6
15
10
11
Business matchmaking in many functions such as receptions, meetings, buyers/sellers events

Support in contract processing
Technical support in manufacturing
Training in production processes (5S, Kaizen)
Consultants closely support and visit factories every 2 months for 2 years
Directories of companies in sector
135
Support when exhibiting at trade fairs
Moulding companies: Most companies are very satisfied and satisfied with Jetro and Jica as the support they
offer is practical and corresponds to business needs.
What can be improved in the support of these
organisations?
1
2
3
4
5

with question 8c)
very dissatisfied (Continue with question 8c)
29
2
the Dutch market?
Moulding companies: All companies welcome opportunities to connect with Dutch markets. Companies
generally believe that the Netherlands (similar to other European markets) has strong demands in terms of
moulding products and hope to obtain support from the CBI in order to connect with Dutch customers. They are,
however, concerned that the value of each moulding contract at the beginning is so small that it can cause some
difficulties in relation to manufacturing.
why you have never considered the
Netherlands?
1
2

42

Netherlands, what are your general
views on the Dutch market?
The Netherlands (similar to other
European markets) has strong
136
demands in terms of moulding

products and hope to obtain support
from the CBI in order to connect
with Dutch customers. They are,
however, concerned that the value
of each moulding contract at the
beginning is so small that it can
cause some difficulties in relation to
manufacturing.
Moulding companies: Most companies would like to access information about the Netherlands for further
expansion in the future. They need:

Companies with real interest in Vietnamese companies and even details of contracts
Information on the next mission to Vietnam
Response options
42
What kind of information would you most like to

receive?
Companies with real interest in Vietnamese

companies and even details of the contracts
Metaalunie ?
1
2
3
Response options:
Yes
No
Maybe
30
12 (companies will join programmes if they are relevant and offer good results)
137
Annex 5b - List of interviewed companies - Molding

No
Address
Web
Dong Tien Mechanical trading

production
955B Huynh
Tan Phat, W.
PhThun,
Dist.7
http://www
.cokhidongti
en.com.vn/
+84 8 6262
3191
Hoang Phuc mechanical

technology co., ltd
B2/19
Nguyen Huu
Tri Str., Tan
Tuc Town,
BinhChanh
http://hpm.
vn
+84 8 3756
2564
Nhat Minh - SG Engineering Co.,

ltd
B3 Lot 4
Dinh Cong
new urban
Hoang Mai,
Hanoi
www.nhatm
inhsg.com
www.nhatm
inhist.com
+84 4 3640
4476
Hayen Corp.
No3, CN6
block, TU
Liem IZ,
TuLiem,
Hanoi
www.hayen
.vn
+84 4 3765
6979
bdmanager@hayenco
rp.vn
ms2manager@hayenin
d.com.vn
Viet empire castings Co., ltd
267 Nguyn
Xin, W.
trngThnh
, Dist.9
http://viete
mpire.com
+84 8 3746
0760
kdphan@vietempir
e.com
Vija technology JSC
2136 Huong
lo 80, Vinh
Loc B,
BinhChanh
http://www
.vijavn.com
+84 8 3765
7301
info@vija-vn.com
Company
Anh Thy Co., ltd
NghiepPhat Co., LTD
10
11
No 10, Road
17,Hiep Binh
Phuoc ward,
Thu Duc
Dist.
240A Duong
Dinh Hoi
Str., Tang
NhonPhu B,
Dist 9
Tel
+84 8 3727
2405
Email
tru@cokhidongtien.
com.vn
info@hpm.vn
info@nhatminhist.c
om
postmaster@anhth
y.com.vn
www.wireha
rness.com.v
n
+84 8 6288
9210
info@wireharness.c
om.vn
Sang Tao JSC
Lot A10, Tan

ThoiHiep IP,
Nguyen Anh
Thu, Dist12
http://sangt
ao.com.vn
+84 8 3717
5486
Salessangtaocn@vnn.vn
Nhat Minh design manufacture

co., ltd
30/5A Dong
Lan Hamlet,
Ba Diem
Village, Hoc
Mon
http://www
.nmmold.co
m
+84 8 3703
0419
info@nmmold.com
Y Chi Viet Co., ltd
173/376A,
DieuXieu
Str., w8,
Long Binh
ward, Bien
Hoa, Dong
http://www
.ichivn.com
+84 61 888
9447
minh.dao@ichivn.c
om
138
Note
Nai
12
Mida precision Mold Co., ltd
13
Technokom JSC
14
Vinavit Fastener co., ltd
15
Thien My industries
Co., ltd
16
Innotek JSC
17
Oristar corporation
18
19
20
Tam Hiep Thanh enterprise
Highway 1A,
My Yen
Commune,
Ben luc,
Long An
Province
Tan Quang
IZ,
Van Lam
Dist.,
Hung Yn
397 An
DngVng
, W.10, Dist.
6, HCM
98/17 Ung
Van Khiem,
w25, Binh
Thanh
Lot 2-4.1
Que Vo II
Industrial
zone,
Que Vo
Dist.,
BacNinh
Floor 9,
Detech
tower, No8
Ton That
Thuyet Str.,
My Dinh Ha
noi
Thanh Phu
Industrial
Zone - Thien
Tan
Commune Vinh Cuu
District Dong Nai
Province
http://www
.midamold.
com
+84 72 387
0873
info@midamold.co
m
http://techn
okom.com.
vn
+84 321
3791 750
info@technokom.c
om.vn
http://www
.vinavit.co
m.vn
+84 8 3876
7737
sales@vinavit.com
http://www
.thienmy.co
m.vn
+84 8 3512
8535
duykhang@thienm
y.com.vn
http://www
.innotek.co
m.vn
+84 0241
3623 318
www.oristar
.vn
+84 4 3972
0120
(Ext.37)
http://casti
ng-tht.com/
+84 61 3865
801
vudo@innotek.com
.vn
oristar@oristar.vn
ducgang_tht@yaho
o.com.vn
TBM Minh Phat Producing

trading co., ltd
141-143
XomDat str.,
w8, Dist 11,
HCM
http://www
.tbm.com.v
n
+84 3858
1816
minhphat@tbm.co
m.vn
Mo Tien Mold Co., Ltd.
508 Kinh
Dng
Vng, W.
An Lc A,
Dist.
BnhTn,
TP.HCM
http://moti
en.com.vn/
modules.ph
p?name=Fe
edback
+ 84 (8)
3755 0557 3755 1462
motien@hcm.fpt.v
n
139
21
DuyKhanh Engineering co., ltd
310A Luy
Ban Bich
str., Hoa
Thanh, Tan
Phu
22
Cathaco., ltd
443/11 Le
Van Sy,
w12, Dist 3
www.cattha
icorp.com
+84 8 5434
8247
sales@patc.com.vn
23
Phuc An
Precision
engineering JSC
38 Group
Dong Anh
Town,
Dong Anh
dist,
Hanoi
www.papm.
com.vn
+84 4
39655256
papmjsc@papm.co
m.vn
Viet Chuan JSC
No 9 lot 4A
Trung Hoa
Rd.,
CauGiay,
Hanoi
http://vietc
huan.vn
+84 4 3783
2374
+84 4 3399
6451
vietchuan.info@gm
ail.com
marketing@vietchu
an.vn
Huy Thanh co.,ltd
Lot CN3,
TLim
Industrial
park,
Minh Khai,
tLim Dist.,
Hni
http://www
.huythanhd
oor.com
+84 4 3765
7061
(ext. 110)
seikico@gmail.com
Kim Long production &

trading service co.,ltd
Plot A2 CN5,
TLim
Industrial
complex,
Hanoi
http://khuo
nmaukimlo
ng.com
+84 4 3780
5063
klmcn@vnn.vn
Vietnam HTMP
Mechanical Co., LTD
No27 D1,
Dai Kim New
urban area
Dai Kim
Ward,
Hoang Mai
Dist, Hanoi
http://htmp
.com.vn
+84 4 3525
1113/
14/15/16
04 3763
8122
Htmmechanical@htmp.
com.vn
Viet Uc Mechanicals
company
No 5 F 1
Hoang Van
Thu Ward,
Hoang Mai
Dist., Hanoi
http://www
.cokhivietuc
.com
http://www
.vietucmold
.com
+84 4 3681
4158
trinhbangoc@yaho
o.com
HP-Tech Vietnam
Engineering
&moulds JSC
km10
highway 5,
Duong Xa
Commune,
Gia Lam,
Ha noi
http://hptec
hvn.com
+84 4 3678
9527
hptechvietnam@g
mail.com
Bac Viet Technology JSC
Km 7,
Highway 18,
Phuong Lieu,
Que Vo,
BacNinh
24
25
26
27
28
29
30
http://www
.duykhanh.c
om/
www.duykh
anh.vn
+84 8 3865
0265
duykhanh@duykha
nh.com
+84 2413617936/043655-9257
140
Dai Kim JSC
No 2 Kim
Giang, Kim
Giang,
Thanh Xuan,
Hanoi
http://www
.nhuadaiki
m.com
+84 4-38584583
daikimjointstock@v
nn.vn
Viet Nam CNC

and
Technology
application JSC
Floor 11,
Building
Vinaconex 9,
Lot HH2-2,
KT
MTrTLim
, Hanoi
http://www
.cncvina.co
m.vn
+84 4 3780
5173/
74
+84 4 2216
6062
cnc@cncvina.com.v
n
ThnhPht precision Co., ltd
255/19, 3B
Quarter,
Thanh Loc
ward, Dist
12
http://www
.tpprecision
.com
+84 8 544
76766
info@tpprecision.co
m
Hong Ky Corporation
38 TyLn,
khuph 7, P.
bnh Tri
ng A,
Binhtn
http://www
.hongky.co
m
+84 8 3754
1122
sales@hongky.com
.vn
35
Thong Nhat rubber company
64/6
LyBnBch,
W.
TnThiHa,
TnPh
http://www
.ruthimex.c
om.vn
+84 8 3961
5453
ruthimex@hcm.vnn
.vn -
36
Lidovit trading & industrial JSC
Lot D5, No3

str.,
BinhChieu
IZ, Thu Duc
www.lidovit
.com.vn
+84 8 37294
183
info@lidovit.com.v
n
37
SaiGon plastic JSC
242 Tran
Phu, W9,
Dist 5,HCM
http://www
.saigonplast
ic.com.vn
+84 8 38358
999
info@saigonplastic.
com.vn
An Lap Co., ltd
No 209,
Amata Str.,
Amata IP,
Bien Hoa
Dong nai
http://www
.anlap.com/
+84 61 8877
099
anlap@anlap.com
Vinh Phat Production & Trading

Co. Ltd.
1/15&1/17
Trn
BnhTrng,
W.5, Dist.
BnhThnh
http://vpg.
net.vn/en/li
enhe
+84 8.
35150097
vinhphat@vinhphat
vn.com.vn
VINH PHU CORPORATION (VPG)
36 VSIP II,
2 street,
Vietnam Singapore II
Industrial
Park,
Binh Duong
Industrial
+84 8406503628212
vpg2008@gmail.co
m
31
32
33
34
38
39
40
141
41
FuviMachanical Technology
Company
42
Vina Mold & Metal Products Co.,

ltd
No 06 ,
Song Hanh
St., Tan Tao
Industrial
Park,
BinhChanh
Dist., Ho Chi
Minh City
Road 6, Tan
Thuan
Export
Processing
Zone, Tan
Thuan Dong
Ward,
District 7,
Ho Chi Minh
City,
Vietnam
http://www
.fuvimold.co
m/english/d
ata/main.ht
m
+84 848
37508228
http://www
.hondalex.c
o.jp/en/vm
mp/about/i
ndex.html
+84-8-37701476
fuvi@fuvimold.com
142
Annex 6 interview results agricultural equipment trading companies

Agro-equipment companies: Interviews with 49 companies which are trading companies supplying to agro
related sectors:
Agricultural equipment and machineries (15 companies)

Agri processing equipment and technologies (11 companies)
Agri food packaging equipment (12 companies)
Horticultural equipment and technologies (11 companies)

Agro-equipment companies: Of the 49 companies, all are trading companies. They import and supply
agricultural equipment to Vietnam. Most of them are involved in repairs to and the installation of machinery and
equipment, architectural and engineering activities and technical testing and analysis. They are in charge of
designing tailored solutions for customers and also source the suitable technologies/equipment for farms (rice,
vegetable, coffee, livestock, fisheries, etc). Some companies even manufacture equipment and machineries as
well, especially some simple small agricultural machinery, greenhouses, processing equipment, etc. However,
Vietnamese equipment accounts for a very small market share. Most of the equipment in the industry is
imported.
Response options
Agro and
food
Horticulture
Automotive
Consumer
appliances
Manufacture of
fabricated metal
products, except
machinery and
equipment
Manufacture of
143
Industrial
machineries
High-tech
systems
and
materials
Energy
Others
3
4
5
6
7
8
optical products
equipment
Manufacture of
machinery and
equipment
semi-trailers
transport equipment
of machinery and
equipment
Architectural and
analysis
Others
38
11
38
11
Agro-equipment companies: Of the 49 companies, all engage in imports, design solution packages for
customers and trade imported equipment.
Chinese, Taiwanese and Japanese equipment is dominant in all subsectors, especially when it comes to Japanese
agricultural equipment (tractors, harvest and post-harvest machinery) and Taiwanese food packaging/processing.
Some European players have also started penetrating the market, particularly in the food processing and
packaging sector.
144
Israel is also strong in horticultural equipment in Vietnam. There are also some European brand names from
France and Spain (greenhouses, irrigation systems, raised beds and planters, pest control system). There are big
opportunities for Dutch brand names in irrigation equipment and technologies because many traders are familiar
with Dutch irrigation technologies.
US
1
parts thereof
Japan
30
ASEAN
countries
49
Europe
Australasia
10
Specific markets
Specific products
Chinese, Taiwanese and

Japanese equipment is
dominant in all subsectors,
especially when it comes to
Japanese agricultural
equipment (tractors,
harvest and post-harvest
machinery) and Taiwanese
food packaging/processing.
Some European players
have also started
penetrating the market,
particularly in the food
sector.
Tractors, harvest
and post-harvest
machineries
Greenhouses,
irrigation
systems, raised
beds and
planters, pest
control systems.
2
3
parts thereof
Outsourcing/Captive
such as (parts of) the
production and/or
etc.) abroad
invest in companies
abroad
145
..
Agro-equipment companies: Horticultural companies welcome opportunities to trade Dutch technologies
because Dutch brand names are respected within global horticulture.
Agricultural machinery trading companies and those working in the agri food processing and packaging sector
also want to trade Dutch machinery however, they are concerned about the price competition in the market with
Taiwanese machinery.
US
1
yes , in import
activities
Japan
28
ASEAN
countries
36
Europe
Australasia
15
Specific
markets
Horticultural
companies
welcome
opportunities to
trade Dutch
technologies.
Agricultural
machinery
trading
companies and
those working
in the agri food
processing and
packaging
sector also want
to trade Dutch
machinery
however, they
are concerned
about the price
competition in
146
Why
Because Dutch
brand names
are respected in
global
horticulture.
the market with

Taiwanese
machinery
2
3
4
5
yes , in
outsourcing
activities
yes , in export
activities
yes , in
receiving
investment
do not know
(Continue with
question 6) ;
Agro-equipment companies: Vietnamese agricultural equipment trading companies consider some factors to
be very important; these include customs policies and procedures, identifying suitable business partners,
knowledge of the new market and technical standards and norms.
Identifying suitable business partners, knowledge of the new market and, technical standards and norms are also
important factors for international business expansion. Beside these, the price of equipment/technologies is very
important to trading companies as it will strongly affect their business. Vietnamese customers are considered to
be rather price sensitive.
No
1
Factors
Global trends
Mean
2.387755
Standard Deviation
0.492287
Median
2
2.22449
0.550201
3.489796
0.505076
3.571429
0.5
3.142857
0.707107
147
Innovation
3.102041
0.653353
2.55102
0.502545
2.102041
0.305839
2.428571
0.5
10
2.469388
0.581021
11
1.530612
0.738863
12
Living cost
1.44898
0.579555
13
4.306122
0.713094
14
4.591837
0.496587
15
3.836735
1.007202
16
Others: price of technologies
4.204082
0.763206
Metaalunie, etc?
Agro-equipment companies: 47% of companies receive support from government organisations which are
part of the trade departments within foreign embassies and consulates in Vietnam. The purpose of support is
mainly to create opportunities for vendors from these markets to approach potential distributors and introduce
their products and technologies.
1
2
3
4
5
Options
Answers
23
26
148
Business matchmaking in many functions such as receptions, meetings, seminars to introduce the
technologies that correspond to that market.
Agro-equipment companies: 35% of companies are satisfied with the support they receive. The remaining
companies are neither satisfied nor dissatisfied. They think the support is sometimes irrelevant and the
technologies introduced are not applicable for their core business.
What can be improved in the support of these
organisations?
1
2
3

with question 8c)
4
5

very dissatisfied (Continue with question 8c)
8
15
The support is sometimes irrelevant and the

technologies introduced are not applicable
for their core business.
the Dutch market?
Agro-equipment companies: 33% of companies do not consider doing business with the Netherlands because
they think the technologies may be too complex for local demand. Therefore the market segment to be targeted
should be larger farms. Their customer bases, however, are small farms so they cannot open up to Dutch
technologies. Besides, some of companies distribute for Japanese, Taiwanese and Chinese equipment already and
do not intend to expand to other brands.
149
The remaining companies (67%) are open to finding out more about Dutch technologies in the sectors and
considering expanding their businesses. They think the Netherlands, with its excellent reputation in horticultural
and food processing/packaging technologies, will correspond to good business opportunities for distributors.
Besides, they also want to introduce new and advanced technologies to agricultural industries in Vietnam and
welcome opportunities to connect with Dutch companies.
why you have never considered
the Netherlands?
1
16

Netherlands, what are your
general views on the Dutch
market?
The technologies may be too

complex for local demand.
Therefore the market segment to
be targeted should be larger farms.
They distribute Japanese,
Taiwanese and Chinese equipment
already and do not intend to
expand to other brands.
33
The Netherlands, with its excellent

reputation in horticultural and food
processing/packaging technologies,
will correspond to good business
opportunities for distributors.
They want to introduce new and
advanced technologies to agricultural
industries in Vietnam and welcome
opportunities to connect with Dutch
companies.
Agro-equipment companies: Most companies would like to access information about the Netherlands for
further expansion in the future. They need:
New technologies, brand names of Dutch companies
150

Response options
What kind of information would you most like to

receive?
The Netherlands, with its excellent
reputation in horticultural and food
processing/packaging technologies,
will correspond to good business
opportunities for distributors.
33
They want to introduce new and

advanced technologies to
agricultural industries in Vietnam
and welcome opportunities to
connect with Dutch companies.
Metaalunie ?
1
2
3
Response options:
Yes
No
Maybe
33
151
Annex 7a - Interviewed results - Dutch

companies
Quantitative analysis - Analysis of market expansion plans in next
3-5 years for Dutch companies in the Metalworking industry
Interviews were conducted with 86 companies which are members of CBI
partners. Eighty-six companies are from different Metalworking industries
in which there are 19 companies manufacturing machinery and equipment
and 30 companies manufacturing fabricated metal products except
machinery. These companies supply their products to various sectors,
such as agriculture, chemicals and the hightech sector.
Overview:
Of the 86 companies, 65% are involved in importing from overseas
markets. These companies dont import much from South Eastern
markets. Only 4 companies (7%) import from Vietnam.
Of the 86 companies, 85% are involved in exporting; 15% of the
companies export to Vietnam.
Of the 86 companies, 38% are involved in outsourcing; only 9%
outsource to Vietnam.
These figures show that, in general, the Netherlands does not trade with
or outsource to Vietnam.
Plan for expanding markets in next 3-5 years:
In the next 3-5 years, 13% of the 86 companies interviewed plan
to expand their import market; only 9% plan to expand their
import markets to Vietnam. Dutch companies think the skills in
metal treatment and specialised aluminium casting are better. The
processing is more efficient and therefore cheaper, with a better
quality and price.
Of the 14% of companies which plan to expand their outsourcing
markets, 17% plan to expand outsourcing to Vietnam. They have
compared China and Vietnam and realised Vietnams potential.
Besides, product protection and product development is easier in
Vietnam than China.
Of the 41% of companies which plan to expand their export
markets, 17% will expand exports to Vietnam. Some reasons
include:
o
o
o
Vietnamese conditions are suitable for their products, e.g. the

country is still not developed; its infrastructure is not
completely developed. Therefore there will be worldwide
interest in this market.
It's a growing market and consumers will be more receptive to
Western products.
The market for oil and gas has good growth in Vietnam.
152
Shipping is developing strongly in Vietnam.

The food industry is developing therefore the market for food
processing equipment is large.
Of the 10% of companies which plan to expand their investment
overseas, 22% will expand their investment in Vietnam.
o
o
The plans for increased trade and outsourcing activities are not very
strong at this stage, however, the fact that Dutch companies are starting
to think about Vietnam and finding out about the market is a good sign in
itself.
Important factors in expanding business overseas:
No
Factors
Mean
Median
3.383721
Standard
Deviation
0.972185
Global trends
3.534884
0.929233
Local tax and regulatory

environment
Customs policies and
procedures
3.232558
1.059127
3.72093
1.03641
3.72093
1.058869
Legal and regulatory systems

for the new market
Innovation
3.093023
1.024728
3.22093
0.998837
3.5
3.430233
1.012169
Cultural
compatibility/language
adaption
3.313953
1.108912
10
3.069767
1.114511
11
3.569767
1.241827
12
Living cost
3.674419
0.96335
13
Identifying suitable business

partners
Knowledge of the new
market
Technical standards and
norms
4.302326
0.882107
4.5
4.139535
1.007767
3.872093
0.930484
4
5
14
15
Some of other important factors on which Dutch companies focus:
Logistics services quality

Competition
Corruption
Educational level, qualified employees (engineers)
Financial status of business partners
Funding opportunities in these countries
Business attitude of business partners
Business etiquette
153
Factors which receive high Importance scores are:

Dutch companies consider factors which relate to market information and

potential partners, such as the financial status of potential partners, to be
very important. The CBI and partners can provide effective support in
relation to these factors through programmes and Vietnamese company
networks, built by local consultants in the market.
Support from governmental organisations:
45% of interviewed companies have received support from governmental
organisations. The support they have received includes:
Country information
Trade fairs, mission in agricultural subsidy project
Business contacts in Vietnam
Global market exploration
Subsidy from government
Business culture information on each market
Market research on specific sector in specific market
Training about law and regulation in the new market
Searching for the right partners to work with
Cooperation in exhibition
79% companies are satisfied or very satisfied with support from

governmental organisations.
The remaining interviewed companies think the services should be
improved because the support has not yet turned out to be effective.
Sometimes there is no answer for specific questions and the information is
too general (can be found on Google).
Expansion plans
36% of companies have considered doing business with Vietnam. Some of
the views about the Vietnamese market include:
Corruption and bureaucracy is a big obstruction

It is a growth market and has huge potential for business
Cheap employment and the labour force can speak English quite
fluently compared to other markets
This is an upcoming market. There is a shift from China to
Vietnam.
The remaining companies are not considering Vietnam in their expansion
plans for a range of reasons:
154
Vietnam is still a small market compared to other countries in

Europe and bigger markets in Asia. If there are enquiries from
Vietnam, however, they could well reconsider.
Vietnam is too far away, the companies do not have any
information.
Vietnamese economy is too small and the standard of living is low;
this is not their target market, i.e. not a high-tech market.
The companies think that products from Vietnam are not of high
quality. Other nearer markets can manufacture products of higher
quality.
The Vietnamese economy is not ready for hightech products
supplied by Dutch companies
Information about Vietnam

55% of companies want to receive information on Vietnam. The specific
information they need includes:
Oil and gas development on current projects

Opportunities for supplying turbines to Vietnam
Ship-building industry in Vietnam
Healthcare sector if the company wishes to invest in a hospital in
Vietnam
General information on the economy
Outsourcing opportunities in engineering products
How is the market going in the food sector
Information on local companies in the agricultural sector
45% companies do not need information although they plan to do

business with Vietnam. The reasons are:
The already have an agent in Vietnam

A study has been carried out by sales department and they already
have enough key information
They already have their first customer and everything is going well
42% of companies (13/31 companies) want to receive support from CBI

and partners when they expand their business with Vietnam.
155
Annex 7b - List of interviewed companies - Dutch

companies
Ansaldo Thomassen B.V.
Elcas BV
Avinom BV
CP NL Engineering
Tap Machinebouw bv
Osseman RVS Bewerking vof
Inventflow B.V.
Wartsila Automation Nederland B.V.
Gemco Industrial Development b.v.
Bluewater Energy Services BV
Laude B.V.
Workships Contractors B.V.
DMN Machinefabriek Noordwykerhout B.V.
Burtec bv
Omnivent Techniek BV
NEM Energy B.V.
Cematic-Electric B.V.
Twenteq BV
Cofely Delta Controls
Eurotron B.V.
Huisman Equipment B.V.
NEM B.V.
Machinefabriek G. van der Ploeg B.V.
Johnson Controls Systems & Service B.V.
Wagenborg Nedlift BV
Lamers High Tech Systems B.V.
Axxent Metaal BV
Calpe B.V.
Emergya Wind Technologies B.V.
Duiker Combustion Engineers B.V.
Handel & Constructie H. Meeuwsen bv
Primo Marine
Veluw Metal Creations Nederland bv
Instalho B.V. Scheepsreparatie en Metaalbewerking
KEMA Nederland B.V.
Mooij Agro BV
De Klokslag Engineering B.V.
Technico
Bakker Magnetics B.V.
AEG Power Solutions B.V.
Ten Broeke Metaal bv
Iris2Iris bv
156
Triogen
Bakker & Co. b.v.
Rockwool B.V.
ESI Eurosilo BV
Racupack B.V.
Brom Mechatronica B.V.
Workfox B.V.
A.A.I.S. Menzing International
Tempress Systems B.V.
WES (Wind Energy Solutions) B.V.
Oosterhof Holman Milieutechniek B.V.
Langenpac B.V.
Feniks Engineering
K. Stok en Zn. BV
Gereedschappenfabriek Van den Brink bv
Mechanisatie en Staalconstructie Graafstra
Bronswerk Heat Transfer B.V.
VDL Steelweld bv
VAF Instruments B.V.
Van Beest B.V.
Verebus Engineering B.V.
Hilarius Haarlem Holland B.V.
Gemco International B.V.
Van den Beucken Verbruggen Machinebouw bv
Sollas Holland B.V.
Telecom Bedrijfscommunicatie B.V.
Willemse & Van Engelen Bakkerijmachines B.V.
Giessendam, Tech. Handelsond.
Parker Hannifin Manufacturing Netherlands (Filtration and Separation) B.V.
IPA Projects & Services B.V.
Peseb bv
DHTC B.V.
Robin Radar Systems B.V.
Krohne Altometer
Huisman Non Ferro Metaal B.V.
Key Technology B.V.
A.S.F. Fischer BV
Sempergreen
Stork Turbo Blading B.V.
SPT Ofshore
Teerling Machines en Metaalbewerking
Agrisun
Hammesfahr Holland B.V.
Itho Daalderop BV
157
Annex 8 key contacts in the vietnamese oil &

gas sector
Some key companies/players in the industry:
PVN (Petrovietnam, the National Oil and Gas company),

VPI (Vietnam Petroleum Institute) and PVU (Petrovietnam
University)
PV EIC (Petrovietnam Energy Technology, subsidiary of PVN)
PVE (Petrovietnam Engineering, subsidiary of PVN, provides
engineering design for oil and gas projects)
PetroVietnam Drilling and Well Services Corporation
PV Gas (Petrovietnam Gas Corporation, subsidiary of PVN, in
charge of gas projects)
PetroVietnam Service Corporation
PetroVietnam Technical Services Corporation
PTSC (Petrovietnam Technical Services Corporation, subsidiary of
PVN)
Petrolimex
EVN (the biggest power generation and distribution company)
Nghi Son Refinery Project
Chevron and JGC (EPCs)
PV shipyard (Petrovietnam Shipyard, subsidiary of PVN specialising
in construction, conversion and repair of diversified types of mobile
offshore drilling units and marine facilities including jack-up,
semisubmersibles)
Vietsovpetro (the biggest oil and gas company in Vietnam,
Vietsovpetros total crude-oil turnover so far is US$ 33 billion (2225% state income)
PTSC shipyards (subsidiary of PTSC, designing and building
specialised vessels for the oil and gas industry, with its current
priority being to fortify PTSCs fleet of vessels)
Long Son Petrochemical Complex (LSP)
PV Oil and Technip
158
Annex 9 analysis 1
Analysis 1: Analysis to identify the most promising sectors for trading
between Vietnam and the Netherlands and for outsourcing
partnering/investment from the Netherlands
Vietnamese strategies in developing metalworking and the
mechanical industry:
Vietnam is in Southeast Asia area with a large population of 88.78mil and
more than 50% of the population is 15-35 years old. It is therefore
considered a very young population which makes for a strong and skilled
labour
force
and
also
a
receptive
consuming
market.
The country has a long history with many wars with China, France and the
US until 1975. After the reunification of the country in 1975, this young
country started to develop its economy and has achieved some gradual
success. It has participated in many bilateral and multilateral trade
collaborations and joined some international economic organisations such
as ASEAN and especially WTO in 2007. This pro-active international
economic integration has brought Vietnam many development
opportunities and also challenges. Vietnam has achieved fast growth rates
with a significantly high annual GDP growth rate of 5-8% since 1990 until
now; the growth forecast for 2013 reveals a more stable increase.
Vietnam has been categorised as an agricultural economy with more than
70% of the population living in rural areas and earning a living from
agriculture. However, since 1986, the Vietnamese government focused on
developing the economy in the industry and service direction, with many
strategies and policies on industrialisation and modernisation. Some
strategies have delivered good results but many strategies are considered
to be too ambitious due to the lack of clear, consistent and effective
implementation plans which incorporate all sectors.
In 2002 and 2009, the government passed 2 strategies on the
development of the Vietnamese industry, especially mechanical
engineering, until 2010, with a vision to 2025. The strategies have created
incentives and support from government for the following focused sectors:
Complete
equipment:
The
government
encourages
the
development of moulding, forging and the creation of large casts,
in order to synchronise equipment and technologies and meet the
demand for the manufacture of large and sophisticated work pieces
and assemblies. This focus supports production of paper and paper
pulp, production of cement and construction materials, generation
of electricity, production of oil and gas, supply of clean water,
processing industry, etc.
159
Prime movers: The government encourages the manufacture of

hydraulic engines of more than 400 HP with a localisation rate of
35-40%; diesel engines of more than 800 HP.
Mechanical engineering servicing the agriculture, forestry, fishery
and processing industries: Government encourages the production
of tractors, manufacturing equipment and machinery supporting
agriculture
and
the
processing
industry.
Machine tools: The government encourages research on and the
design and manufacture of modern machine prototypes and the
use of computerised numerical control (CNC).
Construction engineering: The government encourages the
manufacture of metal structures for big construction and industrial
projects.
Ship-building engineering: The government encourages the
development of a ship-building industry at the average advanced
level in the region to export ships of many kinds up to
400,000DWT; and the development of supporting industries for
shipbuilding such as manufacture of steel sheets for shipbuilding,
assembly of hydraulic engines of a capacity of up to 6,000 HP and
manufacture and assembly of onboard equipment, electric and
electronic equipment, maritime facilities and devices, etc with the
localisation rate to 70% by 2020.
Electric-electronic
technical
equipment:
The
government
encourages the creation of a modern electric equipment
manufacturing industry reaching the advanced level in the region in
electric equipment and materials by 2020. The sector should meet
domestic demand, reduce imported equipment and export to
regional and world markets.
Automobile
engineering
communications
and
transport
engineering: The government encourages the development of the
automobile industry in order to largely meet the domestic
automobile market demand, and export automobiles and spare
parts; high-class trucks and buses; and even high class cars.
Some of these sectors have achieved relatively good development, such

as shipbuilding, automobile and transport engineering, electric equipment,
electronic outsourcing, moulding, casting and forging manufacturing.
Actually, manufacturing in the above sectors is still considered to be at a
low and medium level of technology and still needs much support from the
Vietnamese government and international cooperation organisations in
terms of policy making, business environment improvement, incentives,
human resources training, technology transferring, etc. This would enable
Vietnam to increase its national competitiveness to confidently join in the
international value chain and shift to upper medium and high technology
value for export and specialise in fast-growing, high value added activities.
Vietnamese metalworking industry in the context of competition in
regional countries
160
Compared to other regional countries in the adjacent area (including

Malaysia, Singapore, Indonesia, Philippines, Thailand, Laos, Cambodia),
Vietnam has some comparative advantages and disadvantages in
exporting, outsourcing and manufacturing in the above sectors:
Advantages:
Vietnam has lower labour costs than Malaysia, Singapore and

Thailand.
The engineers in the sectors have been well trained and have a
good working attitude.
There are skilled workers.
Vietnams direction towards industrialisation and manufacturing
has achieved positive results. The industrys value-added index
(Chart 1) has shown increasing trends over the last 20 years.
Vietnam currently has the comparative advantage in manufacturing
products within labour-intensive sectors when other countries are
trying to shift to more technology-intensive sectors.
Foreign manufacturers which look for outsourcing/import partners
in low cost countries are diversifying their selection options and
starting to consider Vietnam as a potential manufacturing base for
some sectors. This trend increases as foreign manufacturers look
for outsourcing/importing partners outside China.
Disadvantages:
The Vietnamese supporting industry is not well developed

compared to supporting industries in other countries such as
Malaysia, Thailand and Indonesia. This leads to high costs for
manufacturers which are looking for outsourcing partners in
Vietnam, e.g. Japanese car manufacturers can only outsource
some parts for their cars to Vietnam, they still have to import other
parts from Malaysia with a higher cost than if they outsourced all
parts and assembled in Malaysia.
Infrastructure in Vietnam is not well developed compared to
Malaysia, Singapore, Indonesia and Thailand.
161
Figure 1: Industry, Value-added Index, World Development Indicators

(source: WTO)
60
Vietnam VNM Industry,
value added (% of GDP)
NV.IND.TOTL.ZS
50
Cambodia KHM
Industry, value added
(% of GDP)
NV.IND.TOTL.ZS
40
Indonesia IDN Industry,

NV.IND.TOTL.ZS
30
Lao PDR LAO Industry,

NV.IND.TOTL.ZS
20
Malaysia MYS Industry,

NV.IND.TOTL.ZS
10
Philippines PHL Industry,

NV.IND.TOTL.ZS
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
In conclusion with respect to the comparative advantages of Vietnam over

other regional countries: although Vietnam has some disadvantages, the
country still offers much benefit to Dutch manufacturers when looking for
importing/outsourcing partners in Vietnam in some niche markets which
are in high demand in the Netherlands. From Malaysia and Thailand, the
Netherlands imports products of a higher technology value such as semiconductors, machines, electrical goods, electronic high tech parts; and
from Vietnam, the Netherlands can import and outsource products of a
slightly lower technology value.
Regions of metalworking and manufacturing industry in Vietnam
Vietnam is geographically a long country with 3 areas: North, Middle and
South markets which have different descriptions, rates of development,
development directions and economic structures. Most of the industrial
zones and manufacturing centres in Vietnam are concentrated in three key
economic regions, North, Central and South Vietnam:
The key northern economic region includes seven cities and

provinces: Hanoi, Haiphong, Quang Ninh, Hai Duong, Hung Yen,
Vinh Phuc and Bac Ninh
The key central economic region includes seven cities and
provinces: Danang, Thua Thien Hue, Quang Nam, Quang Ngai and
Binh Dinh
162
The key southern economic region includes seven cities and

provinces: Ho Chi Minh City, Dong Nai, Ba Ria-Vung Tau, Binh
Duong, Tay Ninh, Binh Phuoc and Long An
According to plans approved by the prime minister, by 2015 Vietnam will

have 91 newly established industrial zones with the total area of 20,839
hectares, and 22 expanded industrial zones with the total area of 3,543
hectares. This will increase the country's total industrial area by 24,381
hectares. This shows the commitment from government to develop
manufacturing in Vietnam to meet domestic and export demands.
Analysis 1:
The analysis is carried out by RenMMatrix and Vietnam Insight in both the
Dutch and Vietnamese markets. The methodology applied includes desk
research and in-depth semi-structured interviews.
163
The promising sectors identified in the Vietnamese market for

exporting/importing/outsourcing and promising sectors identified in the
Dutch market for importing/exporting/outsourcing will be matched and
studied in-depth in step 2.
1. Vietnamese market in the Metalworking and related industries:
strength factors, potential for development and opportunities in
the next 3-5 years
Introduction: The analysis is carried out by desk research and in-depth
interviews
a. Desk Research: The desk research expanded on different sub-sectors in
sectors under ISIC and SBI codes. The desk research is carried out based
on official sources from:
Statistical data from governmental organisations and associations

in Vietnam such as the General Statistics Office of Vietnam (GSO),
the Ministry of Industry and Trade (MOIT), the Ministry of Planning
and Investment (MPI), the Ministry of Science and Technology
(MOST), the General Department of Vietnam Customs, the Vietnam
Chamber of Commerce and Industry (VCCI), etc
Industry information from industrial magazines such as Vietnam
economy, Vietnamnet Investment bridge, etc.
ISIC Rev.4
CBI sectors
Scope of desk research
24
Manufacture
of basic
metals
Metal parts and

components
Potential of mining exploitation in base metals;

ferrous and non-ferrous metals such as iron,
steel, zinc, bronze, titan.
Potential for export/import of these metals
25
Manufacture
of fabricated
metal
products,
except
machinery and
equipment
Pipes and
process
equipment
Study of Vietnamese mechanical industry,

supporting industry and import/export potential
on different products/sub-sectors such as
Forging, Die Casting, Mould Manufacturing,
Stamping, Steel Sheet work, Sheet metal
processing, Plating, Coating, Heat-treatment,
Press forming, Welding, precision technology,
Machine parts and components, Jig, Tools,
Plastic, Rubber parts, etc.
Study of related industries:
* Aerospace
* Shipbuilding/steel structures/bridges,
ports/vessels/containers/* Mining equipment
* Light industrial machinery: Textile industry,
leather/Agriculture, processed seafood
aquaculture and forestry production/Paper
Industry/Packaging/Packaging Equipment
* Architecture/Construction/Interior/elevator
* Oil & Gas/Petroleum chemical industry/*
Chemicals
* Precision Equipment Technology
* Heavy Equipment Machinery
* Power/electrical plant/machine shop gas/wind
power industry/solar
* Business, producing
164
appliances/pumps/generators
* Military
* Consumer and Household Appliance Products
26
Manufacture
of computer,
electronic and
optical
products
Electronics and
electrical
engineering
Study of manufacturing/assembly potential of

computer, electronic products
27
Manufacture
of electrical
equipment
Electronics and
electrical
engineering
Study of manufacture and import/export

potential of electrical cables and wires, electric
equipment, control panels, transformers, etc.
28
Manufacture
of machinery
and
equipment
Pipes and
process
equipment
Study of manufacturing and import/export

potential for machineries in related industries
mentioned above.
29
Manufacture
of motor
vehicles,
trailers and
semi-trailers
Automotive
parts and
components
Study of capacities for car

manufacturing/assembly
30
Manufacture
of other
transport
equipment
Automotive
parts and
components
Study of capacities for bus/motorcycles/bicycles

33
Repairs and
Installation of
machinery and
equipment
Pipes and
process
equipment
Study of machinery manufacturing/repairing for

related industries mentioned above
71
Architectural
and
engineering
activities;
technical
testing and
analysis
Knowledge
Process
Outsourcing
Study of research and development, technology

consultancy and technology transfer in
architectural and engineering
b. In-depth interviews: All findings from desk research on promising

sectors for import/export/investment/outsourcing between Vietnam and
the Netherlands were verified by in-depth interviews with:
* Governmental organisations:
1. Ministry of Industry and Trade Institute for Industrial Policies and
Strategies Supporting Industry Enterprise Development Centre (SIDEC)
2. Department of Industry and Trade
3. Dutch Embassy in Vietnam Economic & Commercial Affairs
* Associations:
1. Vietnam Electrotechnical Industry Association
2. Hochiminh City Association of Mechanical Industry
3. Hochiminh City Electric Cable Association
4. Vietnam Automation Association
165
5. Vietnam Association of Mechanical Industry

6. Vietnam Foundry and Metallurgy Sciences and Technology Association
7. Vietnam Steel Association
8. Vietnam Automobiles Manufacturing Association
9. Vietnam Electronic Industry Association
10. Vietnam Titan Association
11. Vietnam Association of Agricultural Mechanical Industry
12. Vietnam Mining Science and Technology Association
13. Vietnam Science and Industry of Automation Association
14. Ho Chi Minh City Electrical Engineering Association
Companies: 15 state-owned corporations/joint stock and private:
1. Vietnam Shipbuilding Industry Group
2. Vietnam Industrial Construction Corporation
3. Machine and Industrial Equipment Corporation
4. CARIC Limited Company
5. Bac Viet Group
6. Mechanical Engineering & Metallurgy Joint Stock Company
7. T&C Vietnam Company Limited
8. Technokom Joint Stock Company
9. Quang Pho Technical & Technology Company Limited
10. Anmi Tools Company Limited
11. VietChuan Joint Stock Company
12. Vietnam Electric Cable Corporation
13. Electrical Equipment Company (THIBIDI)
14. TAT Machinery Corporation
15. LIDOVIT Nuts & Bolts Joint-venture Enterprise
Promising sectors for imports from Vietnam in Metalworking:
Vietnam has the potential to export average technology level products
which are of low value and high labour demand.
a.
Promising sector 1: Shipbuilding building industry. This is also a

potential industry for investment from the Netherlands.
Vietnam is currently ranked 6th in the world in terms of the
shipbuilding industry.
Vietnam technology in shipbuilding meets the high requirements of the
international standards in welding, pressing, etc.
Currently, Vietnam can export ships up to 55,000 tonnes and all kinds
of ship, from cargo ships to specialised ships.
Vietnams biggest centre for the shipbuilding industry is Hai Phong.
During the last 10 years, Vietnam has invested significantly in the
shipbuilding industry and shipbuilding is one of 6 key industries
included within Vietnams development strategy in its vision to 2025
(this strategy will be studied in the next step of the market analysis).
Vietnam Shipbuilding Industry Group (Vinashin) is the biggest stateowned corporation which functions as a strong engine of development
for Vietnam shipbuilding. Currently Vinashin is facing a hard financial
crisis resulting from mass investments in different industries
(shipbuilding, real estate, construction, supporting industry, etc). They
are therefore restructuring and have decided to focus development
166
over the next 10 years on shipbuilding. This is expected to be a very

good factor for this industrys development.
The shipbuilding industry in Vietnam will gradually rely less and less on
state ownership.
Vinashin is looking for opportunities to cooperate with foreign partners
in 8 of their existing shipyards and some other companies in
supporting industry for shipbuilding (further details of this investment
opportunities will be discussed with Vinashin in the next step).
The development potential of the shipbuilding industry and key
shipyards in Vietnam will be studied thoroughly in next step.
Damen from the Netherlands is cooperating with Vinashin in one
shipyard in Hai Phong. This is one of around 5 significant and
successful investments from the Netherlands in Vietnam.
b. Promising sector 2: Electronic manufacturing/assembly.

Vietnam has comparative advantages in terms of skilled and fairly
cheap labour compared to other regional countries such as Malaysia,
Thailand, Singapore. This is a strength for Vietnam in electronic
manufacturing.
Vietnam has gradually become one of the key electronic assembly
centres in the region especially as China is gradually losing its position
as big electronic assembly country.
In a long-term vision to 2020, the Vietnamese government is
encouraging Vietnamese companies to improve human resources
quality, R&D activities to enhance the competitiveness of electronics
products. It means Vietnamese companies need support in training,
technology and capital to shift from manufacturing civil electronics
products to producing specialised items, from assembling products to
manufacturing parts and software products of high-tech content.
As a result, there are some investment opportunities in electronics
development zones where electronics companies will locate their
factories in Hochiminh City and Vinh Phuc.
c. Promising sector 3: Car manufacturing/assembly.
Similar to Electronics assembly above, Vietnamese companies have
significant advantages in terms of assembling capacity for foreign
companies.
Currently, Japanese car manufacturers (such as Toyota, Isuzu, etc)
invest much in this sector in Vietnam with a great deal of support from
the Japanese government. They are building up supply chains for their
car brands in Vietnam and regional countries.
There are some good Vietnamese private companies which have
successfully joined the supply chain. These companies have received
high levels of support from Japanese companies in relation to high
level technology and manufacturing management knowledge for their
factories.
d. Promising sector 4: Mould manufacturing, moulding products.
Vietnam has good potential for exporting moulding products. There are
more than 50 good companies which can export moulding products,
supporting different industries. They have exported to many countries
including Europe, US, Japan and Australia.
Most of the companies are SMEs and they need much support in
expanding their markets because they still have further capacity to
export.
167
The support that these companies need includes knowledge in

manufacturing management and market expansion.
e.
Promising sector 5: Electrical wires and cables; electrical equipment

such as low/high voltage panels, transformers, etc.
Vietnam has more than 200 manufacturers and many companies
which have already expanded to US markets.
The product quality is quite good and can meet international
standards. Vietnam can produce electrical equipment up to 500KV.
The industry has already satisfied 90% of domestic consumption and
there is now high demand to expand the market overseas.
However, SMEs in the sectors need much support in investigating
overseas markets such as market information, how to enter foreign
markets, etc (similar to support to moulding companies mentioned
above).
f.
Promising sector 6: Sheet Metal processing (Stamping, Plating,

Coating, Heat-treatment, Press forming, Welding)
Vietnam has a big potential to export metal processing products. The
technology required is at an average level therefore many companies
are well equipped with good manufacturing capacity.
Many companies would like to expand the market but only some are
successful in finding their way to join the supply chain. Currently there
are supply chains for many big foreign brand names in machinery
manufacturing in Vietnam.
The other companies need much support to join the supply chain and
engage in exports. They need support to improve technology and
develop manufacturing management, manufacturing efficiency,
market expansion, etc.
g. Promising sector 7: Some other sectors which support different

industries with products, e.g. parts and components, tools, plastic, rubber
parts, home appliances etc. These are not moulding or sheet metal
processing but apply other technologies such as precision technology,
plastic or rubber processing. These sectors technologies are of low and
medium technology value.
Similar to the companies in sheet metal processing sectors, SMEs

need to improve their capacity and their ability to find foreign buyers
and join the supply chain.
This is also a potential sector offering good investment opportunities.

The investment can be a joint venture or 100% ownership. This
opportunity will be studied thoroughly in the next step.
h. Promising sector 8: Titan slag for different industries such as painting,
ceramics, welding, coating, aerospace.
Vietnam is considered one of 10 countries in the world which have
large titan deposits. The Vietnamese titan industry is only developed to
the level of exploring, processing and exporting semi-products which
contain titan slag. Exports are encouraged.
168
However, the Vietnamese government is encouraging foreign

corporations to invest in the sector with high technology so that
Vietnam can export titan products with higher value content.
This is an investment opportunity, however the titan industry is not
large. There are quite a few key world players in this sector and these
are big corporations. If any investors are interested, they can find their
own way to the industry and dont need support from the other
organisations.
Promising sectors for exporting to Vietnam in Metalworking:

Vietnam has the potential to import high-tech machinery.
a.
Promising sector 9: Small agricultural machinery/agro-food processing

equipment/machinery
Vietnam is an agricultural country with 70% of the population living in
rural areas and earning their living from agriculture. However,
agriculture contributed 22% to Vietnamese GDP in 2012 and one fifth
of total export revenue. This means the industry is not efficient
enough. One of the reasons is that the industry is not well equipped
with modern technology; it still has very low levels of automation.
Vietnamese agriculture is in need of modern technology and
agricultural machinery.
Domestic manufacturers are able to manufacture some kinds of
agricultural machinery however cannot compete with imported items.
Currently, 90% of imported machinery comes from Korea, China,
Taiwan, Japan.
We consider this sector as having export potential for Dutch companies
because the Dutch agricultural industry is highly developed. However,
the export potential to Vietnam is only for small sized machinery
because the Vietnamese farms, rice fields, etc are small compared to
those in the Netherlands.
Besides, price competition with machinery from China, Taiwan is also a
factor for Dutch companies to consider (further details on general price
comparisons will be also studied in the next step).
Another export opportunity for Dutch companies to the Vietnamese
agricultural industry is agro-food processing machinery/technology.
The food processing industry has been growing fast in the past 5 years
at an annual rate of 20-30%. Not only supplying to the domestic
market, the food processing sector in Vietnam is also strongly
increasing exports. Therefore, Vietnam is investing in the technologies
for farming and processing meat and seafood, fruits and agricultural
products such as coffee, cacao, etc.
b. Promising sector 10: Turbines for wind energy.
The Vietnamese energy industry has huge potential for renewable

energy, especially wind/solar/bio renewable energy, compared to
many other countries in the region.
The Vietnamese government considers wind energy a necessary

industry to develop and we consider turbines for wind energy to be a
strength of Dutch industry.
Currently, Germany and the US have already entered the market to

supply for some pilot wind energy projects.
169
To enter the Vietnamese market in wind energy, Dutch companies

need to have good consulting companies to support them in market
entry and setting up networks with the Vietnamese government.
Also in energy, but regarding the offshore industry (specifically oil and
gas exploration, exploitation and processing), Vietnam currently
imports all of the equipment for the process (such as casing, drill bits,
valves, etc). There are some key foreign contractors in the industry
such as Sumitomo (Japan), Technip (France), etc. These contractors
will select their equipment suppliers through tendering.
c. Promising sector 11: High technology Transmission system/engine

systems.
In all current manufacturing in relation to shipbuilding, vehicles such

as buses and motorbikes, small machinery in textiles, construction
etc, Vietnam is currently at the level of manufacturing only low and
medium technology parts and equipment. Regarding the engines and
transmission system for those machineries and vehicles, Vietnam has
to import from Europe, Japan and the US.
d. Promising sector 12: Port development expertise and high
technology equipment.
Vietnam has an ambitious strategy in relation to port development in
the country; this has been the subject of studies since the year 2000.
In the long-term, Vietnam has strategies to become a transshipment
country for sea transportation. The Vietnamese government has
identified key areas to develop deep and medium container terminals
such as Hai Phong, Van Phong, Cai Mep Thi Vai.
It may take some time for the strategy to be implemented. To meet
the demand for port development, Vietnam has strong import
potential for port development expertise including consultancy,
designing expertise and also high technology equipment for port
development, such as cranes for ports.
Conclusion: Promising sectors to be proposed for research in step 2.

These sectors will be reviewed and matched with sectors proposed by
RenMMatrix and then we will finalise which ones are to be studied in more
depth in step 2.
ISIC Rev.4
CBI sectors
Promising sectors:
24
Manufacture of basic
metals
Metal parts and

components
Promising sector 8: Titan slag for

different industries such as painting,
ceramics, welding, coating,
aerospace
25
Manufacture of
fabricated metal
products, except
machinery and
equipment
Pipes and process

equipment
Promising sector 4: Mould

manufacturing, moulding products
Promising sector 6: Sheet Metal
processing (Stamping, Plating,
Coating, Heat-treatment, Press
forming, Welding)
170
26
Promising sector 7: Supporting

industry of low to medium level of
technology for different industries
(shipbuilding, car manufacturing,
agricultural machinery
manufacturing, etc). The products
for export include
machinery/engine parts and
components (valves, pumps
casting), car parts, tools, plastic,
rubber parts, home appliances,
etc.
Promising sector 2: Electronic
manufacturing/assembly.
Manufacture of
computer, electronic
and optical products
Electronics and
electrical
engineering
27
Manufacture of
electrical equipment
Electronics and
electrical
engineering
Promising sector 5: Electrical wires

and cables, electrical equipment
such as low/high voltage panels,
transformers, etc.
28
Manufacture of
machinery and
equipment
Pipes and process

equipment
Promising sector 9: Small

agricultural machinery
Promising sector 10: Turbines for

wind energy
Promising sector 11: High
technology Transmission systems
Promising sector 12: Port
development, cranes for ports.
29
Manufacture of
motor vehicles,
trailers and semitrailers
Automotive parts
and components
Promising sector 3: Car

30
transport equipment
Automotive parts
and components
33
Repairs and
installation of
machinery and
equipment
Pipes and process

equipment
71
Architectural and
engineering
activities; technical
testing and analysis
Knowledge Process
Outsourcing
Promising sector 1: Shipbuilding

building industry.
2. The Dutch market in the Metalworking and related industries:

factors of strength, potential for development and opportunities in
the next 3-5 years
Introduction
This chapter starts with an overview of promising branches/sectors in the
Dutch metalworking and technological industry for import from Vietnam. It
171
also contains an overview of branches/sectors in the same industries

which can be regarded as potential exporters or outsourcers/investors
to/in Vietnam.
The content of this chapter is based on data, intelligence and publications
from: CBS (Central Bureau of Statistics), CBI (Center for the Promotion of
Imports from developing countries), FME-CWM, SNV Netherlands
Development Organization Vietnam, and the Embassy of the Kingdom of
the Netherlands in Vietnam. Furthermore, interviews have been conducted
with officers of: CBS, FME-CWM, NL Agency, CBI, Koninklijke Metaalunie
and the Embassy of the Kingdom of the Netherlands in Vietnam.
The Netherlands is one of the strongest economies in the EU in terms of
GDP growth. The Netherlands main industries include:
Food processing,
Chemicals,
Petrol refining,
Heavy engineering - producing petrochemicals and plastics, synthetic
fibres and steel
Light industries, such as electronic goods, home appliances
Technological industries - computing, telecommunications and
biotechnology
Agriculture. This is an important part of the Dutch economy. A highly
mechanised agricultural sector employs only 2% of the labour force
but provides large surpluses for the food-processing industry and
exports.
Sea transportation
Trade is an important aspect of the Dutch economy. International trading

is not limited to export/import or investment, there is a need to offshore/outsource part of the production process abroad as this helps boost
productivity growth for industries in the Netherlands. The main motivation
for off-shoring/outsourcing is to reduce labour costs and relocate some
manufacturing sectors which are not the focus of the country to overseas
markets. Therefore, the Netherlands has expanded its trading partners
from mainly EU and US countries to countries from other parts of the
world such as Southeast Asia.
Promising sectors for import to the Netherlands in Metalworking:
a.
Promising sector 1: Shipbuilding - Sector supporting sea
transportation.
The shipbuilding industry in the Netherlands is highly developed and

supplies to worldwide markets. To meet the domestic and export
demand, the industry currently imports and off-shores various
specialised parts of the ship (for example, steelworks, boilers,
machines and motors, propellers) and the production process (for
example, welding equipment) or even entire ships.
172
Currently the Netherlands has good links with the Vietnamese

shipbuilding industry as a result of importing and opening shipyards in
Vietnam.
b.
Promising sector 2: Mechanical sector supporting machinery
manufacturing
Metal parts, tools and components: such as screws, bolts, tubes,

valves, taps
Products from die casting, forging products, pressing, moulding
Components for drive systems
Specific products include:
o castings for equipment such as computers, scales and parking
meters;
o parts for mopeds, bicycles and baby carriages such as luggage
carriers, mudguards and (parts of) frames;
o fixing materials such as screws and bolts
o such as tubes, valves, shutters and taps for central heating
systems
There is also a need for high quality standards (for instance the
European aerospace and automotive sector), and for more
sophisticated products (for instance (parts of) wheel suspension
systems, pumps, transmission systems and gearboxes). However, the
products of higher value technology are always imported from the
countries that already encompass well-developed supporting
manufacturing industries.
c.
Promising sector 3: Mopeds, bicycles, motorcycles
Import opportunity to the Netherlands includes parts, frames,
gearwheels, metal drive chains, bearings
Table 1 gives some relevant figures for the branches/sectors just
mentioned
Table 1: Potential Dutch market for products from the Vietnamese
metalworking industry
SBI code Enterprises 2013

2011
Number % of % <100
Investments 2011
Result
x mln % for
x mln
% of
total empl.
machinery
total
and eqpmt.
26
14
1445
11
97
116.5
67
854
27
7
1145
95
151.3
80
424
173
28
49
2920
23
93
921.0
55
2869
29
12
720
95
368.2
20
680
30
8
1365
11
97
77.1
47
477
33
10
5345
41
99
257.9
74
597
12,940
100
---
1,892.0
Total
100
---
5,901
Source: CBS.
Table 1 shows that a vast majority of the enterprises in the relevant

branches/sectors (>90%) are SMEs (<100 employees). Since well known
low cost countries like China and India are increasingly concentrating on
producing in large series formats and for their own growing markets,
SMEs and their need for small series production runs are less interesting.
This offers possibilities for developing countries such as Vietnam which can
profitably produce on a small series basis for low costs.
However, it is not just about low costs. Two major problems arise in this
respect:
imports of metal parts into the Netherlands, e.g. forgings and castings,
come mainly from other (western) European countries. Among others,
Germany, Italy, France and Spain are mentioned. Turkey is also
included in this picture. This is because distances are relatively short
(transportation costs) and product quality as well as delivery is
reliable;
Except for a few branches/sectors (see next paragraph: Promising
branches/sectors for export / outsourcing to Vietnam), Vietnam is,
according
to our spokesmen, hardly known by the enterprises who
are members of the FME-CWM and Koninklijke Metaalunie1. If they
have an image of the metalworking industry in Vietnam at all, it is an
image of poor quality products.
If this strategy is chosen, enterprises that are willing to participate should

improve the quality of their products by training their employees and
organising processes so that they can produce in line with European
standards.
1
Practically all enterprises belonging to the SBI codes in table 1 are members of one or more
associations under the wings of FME-CWM and or Koninklijke Metaalunie.
174
Promising sectors for export from the Netherlands in

Metalworking:
a. Promising sector 4: Equipment and machinery for the autonomous
manufacture of transport items such as bicycles, mopeds, etc.
Equipment and machinery for the autonomous manufacture of

transport items such as bicycles, mopeds, baby carriages and so on,
instead of just producing parts and/or assembling them.
b.
Promising sector 5: Equipment and machinery for the agro food

processing sector
The agricultural sector and the food/nutrition industry in the
Netherlands work closely with Dutch producers of agro-food machines.
The Netherlands is a highly innovative market in the food sector,
providing high-tech solutions/equipment along the supply chain. The
food industry supply chain includes suppliers of climate control
systems, refrigeration and freezing installations, warehouse logistics,
transport systems and other machinery.
There is a clear trend of exporting equipment and machinery for the
agro food processing sector (for instance greenhouses, machines for
the processing, conservation and packing of food (products).
This is also an important and growing sector in the Vietnamese
economy, for the internal market, as well as for export.
c.
Promising sector 6: Petrochemical/oil & gas/offshore equipment
The Dutch oil and gas industry is considered to be one of the top five
in the world, together with US, UK, Norway, and France. The
Netherlands is strongest in onshore and offshore gas production and
the supply industry, such as engineering, field development, pipeline
installation, maintenance, manufacturing and material and equipment
supply, onshore as well as offshore.
There is a great trend of exporting the equipment to the world
markets.
Table 2: Potentially relevant enterprises for exporting/outsourcing to

Vietnam
SBI code Enterprises 2013

Innovation
Investments 2011
2008
2011
Number % >50
x mln % for
% of
population
empl.
machinery
and eqpmt.
175
28
2920
13
301
1070
309
210
Total
4200
---
921.0
55
65
77.1
47
652
998.1
---
653
Source: CBS.
The possibilities/strengths of Vietnam are obvious. The big, young, low

cost, labour force has already been mentioned. Furthermore its growing
economy, political stability, geographic position as gateway to Chinese and
South East Asian markets and domestic market of 89 million people, make
it an interesting destination for export and investment.
Nevertheless there are many obstacles. These are summarised in a sector
report on Vietnams Shipbuilding industry by the Embassy of the Kingdom
of the Netherlands (May 2013) as follows:
a weak financial sector;

inefficient state owned companies and public spending;
red tape and widespread corruption;
poor infrastructure;
poor vocational training.
These obstacles, in combination with the fact that Vietnams metalworking

sector, as well as its business climate (culture, regulations, tariffs, etc.), is
hardly known by Dutch enterprises, means a great deal of work is
required, especially since the Vietnamese government wants to transform
its economy into a model of added value, quality and sustainable growth.
Government agencies in Vietnam as well as in the Netherlands, can/have
to play an important role in this transformation.
On investments and innovation, the CBS presents data on a two digit level only. Since
codes 301 and 309 contain 94% of the enterprises belonging to SBI code 30, the data on
investments and innovation for enterprises belonging to SBI code 30 are presented in table
2.
176
3. Business supply matching demand and proposing promising

sectors
Dutch market in Metalworking and
related industries - Findings from the
Dutch market
Vietnamese market in
the Metalworking and
related industries findings from the
Vietnamese market
Promising branches/sectors for

import from Vietnam:
Promising
branches/sectors for
import/outsourcing
opportunities from
Vietnam:
Specific products/sectors:
metal parts and components
such as:
castings for equipment such as
computers, scales and parking
meters;
parts for mopeds, bicycles and
baby carriages, such as luggage
carriers, mudguards and (parts of)
frames;
fixing materials such as screws
and bolts.
-
pipes and process equipment:

such as tubes, valves, shutters
and taps for central heating
systems.
-
components for drive systems:

gearwheels, such as cogwheels
for bicycles;
metal drive chains for
bicycles, mopeds and maybe
motorcycles;
bearings
These products are categorised into
subsectors below:
Specific products/sectors:
- Ships (this also represents
outsourcing and investment
opportunities)
- Electronic products (this
also represents outsourcing
opportunities)
- Car parts (this also
represents outsourcing
opportunities)
- Moulding products
- Electrical wires and
cables; electrical equipment
- Sheet metal processing
products
- Engine parts and
components (valves, pumps
casting) and tools. These
are products from the
supporting industry with
low to medium level of
technology (this also
represents outsourcing and
investment opportunities)
- Titan slag for different
industries such as ceramics,
coating, aerospace.
These products are

categorised into subsectors
below:
177
SBI code 26: Manufacturing of

computers, electronic and optical
product - Electronics and electrical
engineering (CBI sectors)
SBI code 26: Manufacturing

of computers, electronic
and optical product Electronics and electrical
engineering (CBI sectors)

electrical machinery and equipment Electronics and electrical engineering
(CBI sectors)

of electrical machinery and
equipment - Electronics and
electrical engineering (CBI
sectors)

machinery and equipment not
mentioned before Pipes and process
equipment (CBI sectors)
SBI code 29: Manufacturing of motor
vehicles, trailers and semi-trailers
Automotive parts and components
(CBI sectors)

of motor vehicles, trailers
and semi-trailers
Automotive parts and
components (CBI sectors)
SBI code 30: Manufacturing of means

of transport other than cars and
trailers -Automotive parts and

of means of transport other
than cars and trailers Automotive parts and
SBI code 33: Repairing and

installation of machinery and
equipment - Pipes and process
of fabricated metal
products, except machinery
and equipment Pipes and
process equipment (CBI
sectors)
SBI code 24: Manufacture
of basic metals - Metal
parts and components (CBI
sectors)
Promising branches/sectors for
exporting/outsourcing to Vietnam
shipbuilding industry. In this
context, also ship design, supply of
equipment for shipbuilding;
Promising
branches/sectors for
exporting to Vietnam
Small Agricultural
machinery
178
- offshore oil and gas exploration and

exploitation equipment
equipment and machinery for
the agro food sector (for instance
greenhouses, machines for the
processing, conservation and packing
of food (products); this is an
important and growing sector in the
Vietnamese economy, for the internal
market, as well as for export.
equipment and machinery for
the autonomous manufacture of
means of transport such as bicycles,
mopeds, baby carriages and so on,
instead of just producing parts
and/or assembling them.
Agro-food processing
equipment
Turbines for wind
energy
Offshore oil and gas
exploration and
exploitation equipment
High technology
engines/transmission
system
Port development
consultancy/port
equipment
These products are categorised into

subsectors below:
These products are

categorised into subsectors
below:
machinery and equipment not
mentioned before Pipes and process

of machinery and
equipment not mentioned
before Pipes and process
SBI code 30: Manufacturing of means

of transport other than cars and
trailers -Automotive parts and
After matching supply and demand between the findings from the 2
markets, i.e. the Netherlands and Vietnam, some sectors have been
identified and proposed for the next analysis:
Potential sectors for trading/outsourcing and investment between the

Netherlands and Vietnam in 3-5 years include:
Shipbuilding: Importing, outsourcing and investment opportunities
in the Vietnamese shipbuilding industry for Dutch companies.
Together with these outsourcing and investment opportunities,
Dutch companies can export high technology equipment for the
sector such as ship engines, transmission systems.
Mechanical supporting industry: Importing, outsourcing and
investment opportunities in Vietnam supporting industry for Dutch
179
companies. These include low and medium technology engine parts

and components, tools, moulding products, sheet metal processing,
metal parts for bicycles, moped, motorcycles etc. Also in this
industry, Dutch companies have export opportunities in high
technology machinery such as engines/transmission systems, a
great deal of which are imported into Vietnam.
Agriculture: Export opportunities for Dutch companies in terms of
small agricultural machinery and agro food processing machinery
to Vietnam.
Electrical cables, wires and equipment: Import opportunity from
Vietnam for Dutch companies.
Electronic manufacturing: Import and outsourcing opportunities for
Dutch companies in Vietnamese market.
Car manufacturing: Import and outsourcing opportunities for Dutch
companies in Vietnamese market.
Energy: Export turbines for wind energy to Vietnam or offshore
technology and equipment.
Port development sector: Export opportunities for Dutch companies
to Vietnam in high technology equipment.
Titan: import and investment opportunity for Dutch companies
(import titan slag and invest in developing titan processing industry
in Vietnam).
Of these sectors, the first three (shipbuilding, mechanical supporting

industry and agricultural equipment) are currently showing a clear
interest in cooperating. There has already been a comprehensive study
of ship building and, as a result, two sectors are recommended as
promising sectors for step 2 analysis: mechanical supporting industries
(including moulding, metal processing, plastic/rubber processing) and
agricultural (including agro-food processing equipment).
Besides, one sector can offer import/export/outsourcing and
investment for Dutch companies therefore those sectors are
recommended to be studied in terms of all aspects, including
investment opportunities. This will give Dutch SMEs a full picture of the
promising sectors and what they offer.
The three sectors (Electrical cables, wires and equipment; Electronic

manufacturing; car manufacturing) have shown there is a clear
demand from Vietnamese companies to export, or outsource work,
however there is no emerging interest from Dutch companies
according to the study. Those sectors may be new potential sectors for
cooperation between the two countries in the future. In order to help
Dutch SMEs to be aware of these opportunities in the Vietnamese
market, the 3 sectors will be studied in terms of statistics concerning
development rates, export to other markets and existing countries that
have exported from Vietnam in recent years.
180
The last three sectors of Energy (including Renewable energy and

Offshore oil and gas), Port development and Titan are sectors which
have the potential for exporting to/investing in Vietnam however the
there has been no interest from Dutch companies so far. Moreover,
those sectors are narrow sectors of mainly large companies. If Dutch
companies are interested in the Vietnamese market, they will be able
to find their own method for approaching Vietnamese companies, and
only need support from governmental organisations, except for
lobbying activities. Therefore, the 3 sectors are not included in step 2
analysis.
Conclusion:
Mechanical supporting industry and Agricultural equipment are
recommended to be studied in step 2. Electrical cables, wires and
equipment; Electronic manufacturing and Car manufacturing will be
studied in a general manner in order to provide Dutch SMEs with initial
insights into the opportunities in those sectors. All interviews in next step
will be carried out with companies in these sectors.
181
Appendix 1: Useful contacts

Organisations affiliated to the Dutch government
Embassy of the Kingdom of the Netherlands
www.hollandinvietnam.org
Contact: Mr. Bernhard Kelkes
Consulate-General of the Kingdom of the Netherlands
www.hollandinvietnam.org
Contact: Mr. Simon van der Burg
NLAgency
www.agentschapnl.nl/vietnam
Contact: Mr. Mark van der Linden
CBI (Centre for the Promotion of imports from developing countries)
www.cbi.eu
Contact: Mrs. Tamar Hoek
Organisations affiliated to relevant branches/sectors in the
Netherlands
Koninklijke Metaalunie
www.metaalunie.nl
Contact: Mr. Paul Verlinden
Association FME-CWM
Dutch organisation of enterprises for the technological industry
www.fme.nl
Contact: Mr. Patrick Walison
Furthermore:
Holland Shipbuilding Association/HME
Association of Dutch Suppliers in Oil and Gas Industry
Federatie Agrotechniek
GMV Facilitating Food
NAFTC
TFHC
Cleantech Holland
Dutch Energy Solutions
182
Holland High Tech

VLM
Aqua NL
VNMI
NAG
Bouwen met Staal
FEDET/FEDA
NVKL
Staalfederatie
NEVAT: Leading group of Dutch Suppliers
VIMAG
Consultancy
NLIngenieurs
Dutch association of consulting engineers
www.nlingenieurs.nl
Contact: Mr. Peter van Essen
Appendix 2: Dutch companies active in Vietnam

Shipbuilding and maritime equipment
Alewijnse Marine Systems
www.alewijnse.nl
Breman Shipping Installation BV
www.bremanshipping.com
Corrosion CWC
www.corrosion.nl
CSI control systems
www.csi-systems.nl
Damen Shipyards Song Cam Shipyard
www.damen.nl
Datema
183
www.datema.nl
Econosto
www.econosto.com.sg
el-Tec
www.el-tec.com.vn
Klay Instruments
www.klay-instruments.com
Mastervolt
www.mastervolt.nl
Merrem & La Porte
www.merrem.nl
NME
www.nme-group.com
Ned-deck Marine
www.neddeckmarine.com
Nieland
www.nieland.com
Rubber Design
www.rubberdesign.nl
Twentsche Kabelfabriek
www.tkfgroup.com
VDL Klima
www.vdlklima.com
Voith
www.voith.nl
Winkel
www.winkel.nl
184
Annex 10: methodologies

The Metalworking analysis is carried out using a Customer Centric
approach. This approach keeps the analysis on track in order to provide:
Desk research: Data collection from reliable resources including the

Worldbank; UNIDO; ILO; governmental published data on sectors
(Vietnam and regional markets); industry associations and researched
models from respected researchers. In-depth analysis into each
promising sector with statistics and forecasts on the market potentials,
manufacturing capacities, trading development, government policies
towards the sector and regions of development over recent years. The
market analysis also provides studies for each sector on the value
chain; evaluation of the sectors internal/external factors; a SWOT
analysis and a Porter five force mode and overview comparison
between Vietnam and regional markets in each sector. The analysis
also provides practical information on distribution channels and
strategic market entries for Dutch industries. All studies show that
Dutch industries have a solid understanding in terms of joining the
cooperation effectively.
Qualitative in-depth interview semi-structured: The results of the
market analysis are also verified by a qualitative analysis through indepth semi-structured interviews with representatives from the
governmental organisations which regulate the industry and related
business associations/chambers of commerce/stakeholders; and with
decision makers from trading/manufacturing companies in the
industry.
Quantitative analysis of interviews with 200 Vietnamese SMEs in the
identified promising sectors in Vietnam (Annex 3, 3a, 4, 4a, 5, 5a, 6,
6a) on their expansion plans to overseas markets/European markets in
the next 3-5 years; their awareness of Dutch industries and the
significant factors they consider when expanding and what support
they need. This analysis will equip Dutch SMEs with market knowledge
and understanding of business partners so that they can draw up
proper strategies and be more successful when entering the
Vietnamese market. This analysis also gives the CBI and its partners a
clear vision regarding the focus of services to Vietnam in the future.
This analysis also includes a proposal plan from Vietnam Insight on
useful supporting programmes for Vietnamese companies in promising
sectors. Together with the analysis itself, Vietnam Insight also
combines a list of potential Vietnamese companies which have been
enthusiastic about joining CBI supporting programme and a list of
associations with which the CBI can cooperate in future programmes.
Quantitative semi-structured telephone interviews with decision
makers/managerial members of 86 Dutch SMEs in the Dutch
Metalworking industry on their expansion plans to overseas markets
(Annex 7, 7a) in the next 3-5 years. This analysis will provide the CBI
and stakeholders with understanding regarding the trends in relation
185
to overseas market expansion within Dutch Metalworking SMEs in the

next 3-5 years, a clear insight into Dutch SMEs awareness of the
counterpart market, what factors they consider significant in investing
or trading in new markets and what support they need.
The team: The team includes a consultant and research teams from
Vietnam Insight and RenMMatrix:
Nguyen Nhat Minh Senior Consultant Project leader Vietnam Insight
Nguyen Chi Trung Senior Consultant Vietnam Insight
Nguyen Nhat Tan Consultant Vietnam Insight
Truong Hung Thien Senior Market researcher Vietnam Insight
Mr. Matthew Chong Independent Consultant
Drs. Wil .J.A. Nelissen Research Director - RenMMatrix
Drs. Anouk .E.E. Peerboom Senior Project leader RenMMatrix
186
Annex 11 regulations governing promising

sectors
1. Electronic manufacturing assembly
Besides the two decisions 186 and 10, specific to the electronics industry,
the government has also placed a strong focus on the development of the
electronics industry with Decision 75 in 2007 Approving the master
plan on the development of Vietnams electronics industry up to 2012,
with a vision toward 2020. The objectives of the master plan include:
The industry will achieve a production turnover of US$ 4-6 billion
and an export turnover of US$ 3-5 billion, create 300,000 jobs, and
grow at an annual rate of between 20% and 30%.
The electronics industry will become a motivating force for
development, making significant contributions to export.
To create 500,000 jobs and build a contingent of engineers and
technicians with international qualifications.
Domestic manufacture will be capable of satisfying most of the
market demand and not depend on imported products.
Supporting industries for electronics manufacturing will be
developed to meet domestic manufacture and export demands.
Manufacturing establishments will be located rationally according to
regional development orientations.
The decision has highlighted specific points for implementing the decision
such as investment into research and development for the industry, calling
for foreign investment with technology transfer into the industry, human
resources development, tax regimes, building IT, electronics parks.
In 2010, the government also passed Decision 1755 Approving the
scheme to make Vietnam a country strong in Information and
Communication Technology. The Decisions objectives include the
development of Vietnamese ICT to supply the local market and:
By 2015: Vietnamese enterprises will be fully capable of designing
and manufacturing equipment with gradual substitution of import
items, stepping up research into the manufacture of integrated
circuits, designing and producing Vietnamese branded ICT
hardware products for domestic consumption and export, becoming
one of the 15 leading countries in software and digital content
processing services.
The specific areas for implementing the decision objectives include:
taxation, land policy for ICT project and capital sources allocation.
Additionally, there was Decision 698 in 2009 Approving the overall
plan on the development of information technology and human resources
up to 2015 and orientation toward 2020. There are many plans on
developing human resources including initiatives on research centres, high
tech parks and human resource development programs with developed
countries.
Many decisions and policies from the government have shown that the
government understands the importance of the electronics industry in
187
economic development. Since then, the electronic industry has

restructured and witnessed rapid development.
2.
Electrical equipment manufacturing

The Vietnamese government considers the industry an export sector
with great potential and has launched master plans to develop the
industry. Decision No.186 in 2002, approving the strategy on the
development of Vietnams mechanical engineering industry until 2010,
with a vision towards 2020, has set the direction for the mechanical
industry in general and electrical equipment manufacturing sector in
particular. Besides this, and specifically to regulate the sector, the
government also drew up the master plan to develop the sector in
Decision 48 in 2008 Approving the planning on Development of
the Electric Equipment Manufacturing Industry in the 2006-2015
period with a vision towards 2025. The objectives of the master plan:
The average production values maintain a growth rate of 1718%/year,

The sector satisfies over 70% of the domestic demand for electric
wires and transformers by 2015. To satisfy 55% of the domestic
demands for electric motors and some types of common generators
by 2015,
By 2015, Vietnams electric equipment-manufacturing industry will
reach regional, advanced standards on technologies in order to
manufacture transformers, generators, electric motors, medium and
high-voltage instruments, electric wires and cables for domestic
consumption and export. The industrys export turnover is projected
to reach 18%/year in the 2011-2015 period and 15% in 2016-2025.
By 2025, Vietnam will be capable of manufacturing and supplying
complete electric equipment sets for transmission lines and
transformer stations.
By 2015, to satisfy 60-70% of the domestic demands for electric
instruments; the export value will represent 19-20% of the industrys
production value.
By 2015, to satisfy 55-65% of the domestic demand for motors and
about 50% of the domestic demand for some types of generators of
lkV-lkW capacity; the export value will represent 30-40% of the
industrys production value.
By 2015, to basically satisfy the domestic demand for distribution
transformers of uniform national quality standards, trying to meet 5060% of the demand for 110kV -220k V transformers. The export value
will be approximately 30-35% of the industrys production value.
To achieve these objectives, the government is encouraging foreign

investment into the sector to draw in high technology and focus on
research. Some of the key products that the Vietnamese government is
targeting for development are static electric machines, different kinds of
188
transformers, rotary electric machines, motors/generators for household

and industrial uses, electric wires and cables, electric instruments, electric
boxes and panels, measuring equipment, etc. The sector also plans to
build up a system of centres for inspecting electric equipment according to
national standards to ultimately ensure conformity with these international
standards. This will help the local sector to meet the requirements of
international standards and expand into overseas markets.
The government is also offering many incentives to companies which
create energy-efficient products and items that are used to tap renewable
energy resources as well as those which conduct research for energy
conservation purposes. Specifically, the State has created favourable
conditions for them to seek preferential loans from development banks,
the assistance fund for science and technology development, the national
fund for technological renovation, and the national energy efficiency and
conservation programme.
3. Moulding sector
The Vietnamese government considers die and mould as one of the key
sectors for development in the supporting industry. Besides Decision 186
to support the Vietnamese mechanical industry, specifically the mould and
die sector, there is one more strategy for developing die casting and
moulding - Decision 583 in 2012. According to the Decision, the
government approved the master plan to develop the die and mould
sector from 2009-2020 with a vision to 2030. The Decision states that the
mould and die sector is a very important part of the mechanical industry;
the development of the sector should be in line with the overall plan for
the mechanical industry. The objectives of the policies include:
Manufacturing value of the sector to reach US$998 million in 2015,
US$1,519 million in 2020 and US$3,078 million in 2025
Export value to reach US$50million in 2015, US$152 million in
2020 and US$619 in 2025.
To achieve the objectives, the Decision provides a list of key projects in
which setting up satellite systems for manufacturing companies is one of
the primary plans. The total investment for the sector until 2015 is US$
945 million and US$ 593 million for the period 2016-2025.
So far, the government has indicated various policies (master plan for
supporting industry, die casting development plan strategy, etc), however,
the government has not yet presented a concrete development action
plan.
189
Annex 12 - trading between the netherlands

and vietnam - first 6 months of 2013
Source: Vietnam Custom Statistics
4 of the largest imports from Vietnam to the Netherlands: textiles and
garments, footwear, computers, electrical products, spare-parts and
components thereof, telephones, mobile phones and parts thereof
Import from Vietnam to Netherlands first 6 months,
2013 (US$)
Fishery products
Fruits and vegetables
Cashew nut
Coffee
Pepper
Rice
Pastrycooks, sweets and cereals products
Coal
Chemicals
Chemical products
Plastic products
Rubber
Rubber products
Handbags, purses, suit-cases, headgear
Bamboo and rattan products
Wood and wooden products
Textiles and garments
Foot-wears
Ceramic products
Precious stones, precious metal and articles thereof
Iron and steel products
Computers, electrical products, spare-parts and components thereof
Telephones, mobile phones and parts thereof
Machine, equipment, tools and instruments
Other means of transportation, parts and accessories thereof
190
4 of the largest exports from the Netherlands to Vietnam: milk and milk
products, machinery, equipment, tools and instruments, iron and steel,
ferrous waste and scrap.
Export from Netherlands to Vietnam first 6 months,
2013 (US$)
Fishery products
Milk and milk products
Pastrycooks, sweets and cereal products
Animal fodders and animal fodder materials
Chemicals
Chemical products
Pharmaceutical products
Plastics
Plastic products
Rubber
Yarn
Textile, leather and foot-wear materials and auxiliaries
Ferrous waste and scrap
Iron and steel
Iron and steel products
Computers, electrical products, spare-parts and components thereof
Machine, equipment, tools and instruments
Insulated wires and cables
191
Annex 13 - Action plan and further proposals to

CBI
Observations of Vietnamese SMEs in promising sectors have been
gathered via an in-depth study of promising sectors, a comparison of the
advantages of Vietnam over other regional countries, conducting
interviews with Vietnamese businesses about their market expansion
plans in the coming 3-5 years, their awareness about the Dutch market
and the support they need in order to expand to the Netherlands and
interviewing Dutch companies about their views on the Vietnamese
market (see Annex 3a, 4a, 5a, 6, 7a).
Observations of Vietnamese SMEs in the promising sectors:
Each company in each sector has different challenges. Therefore,

to support Vietnamese companies effectively and practically, the
support should be tailored to their real needs.
The Vietnamese companies in promising sectors in this study are
mainly SMEs which are characterised by short-term vision and
strategies, limitations in terms of planning and the implementation
of business development, and a tendency to deviate from plans as
a result of limited resources. Therefore, any collaborations and/or
programmes for them should encompass SMART objectives and
strong follow-up. The objectives should be clearly discussed with
companies and informal commitment/agreement should be
obtained from them to follow the programmes. Together with clear
objectives, a so called Business supporting plan can be drawn up
by consultants and company owners/leaders. The plan may include
activities, expected outcomes, timelines, etc. These activities can
help develop the commitment from companies.
Companies have practical views on their activities. 60-70% of the
interviewed companies mentioned business results. This is a
normal approach from enterprises that all trade and investment
promotion organisations should note during all activities. For
example, in each activity, even with buyer/seller match, if the
matching is not accurate, the companies will not be willing to
attend.
Companies always like support programmes with free access.
However, to some extent, they dont take it seriously and offer less
commitment to programmes which are too easy for them to join.
An attitude of cooperation should therefore be built up, e.g. a so
called Public Private Partnership may be a good approach. It
means the companies also have to make a partial financial
contribution to the programmes. This will automatically lead to
improved commitment from participants. Moreover, if the
supporting programmes offer practical value to companies, they
are normally willing to contribute.
192
Companies want to expand their networks internationally and

domestically. Therefore activities which can bring companies
together under a group/club/forum which share the same
interests/concerns/challenges/difficulties motivate companies to
join in order to share ideas.
Companies always want to promote their companys name and
reputation. However, small and medium companies usually face
challenges when they do business with foreign business partners
for the first time as their names are not yet known. Foreign
partners are always concerned about financial positions, company
development, etc. Therefore, activities which can verify their
names, capacities and abilities to foreign partners are very helpful
to them.
Vietnamese enterprises, especially in the manufacturing industry,
are limited in terms of international market knowledge and
marketing ability so they feel very unsure about approaching
international markets by themselves. It is therefore necessary to
support them in marketing activities and be aware of modern
trends in service quality.
Two key organisations which are already successful and about
which various companies have been very positive are Jetro and
Jica. Their supporting programmes are long-term, practical, very
detailed (even in terms of all of the different enquiries from and
discussions with Japanese partners and Vietnamese companies),
very consistent and regular, and involve many volunteers and
(human) resources.
In order to be competitive and ensure programmes are useful, the
programmes should be creative, well planned and suited to the
capacity of the supporting organisation.
On the basis of a general understanding of SMEs and as a result of the

interviews, I set up a Programme Basic Matrix which applies the matrix
methodology to designing supporting programmes. The Programme Basic
Matrix includes:
Vertical axis: The key needs of companies in promising sectors

include needs from industry levels to company levels. Industrial
needs are supported by governmental level programmes.
Entrepreneurial needs can be supported by related organisations.
Horizontal axis: Implementation methods
Suggested programmes are formed as a result of combining
companies needs and implementation methods.
The matrix can be used in designing supporting programmes. This is a

basic matrix; the matrix can be expanded via other studies which can
prolong and add further items to the Needs or Methods axes.
193
PROGRAMME DESIGN BASIC MATRIX

No
Demand
A.
Industry levels
1.
Capital support
2.
Tax regimes
3.
Supporting industry
development
4.
Customs procedures
and transparencies
5.
R&D, technology
development
6.
Human resources
development
B.
Company levels
1. Financial
Sponsorship
Off-line/off-site
Directory
Booklet
Website
On-line/off-site (social media)

Blogs/
Social
Content
Online
microbl
networki
communi
training
ogs
ng sites
ties/
Forum
Sponsor
ship
enabling
compani
es to
advertis
e on
Dutch
associat
ions
website
s
Off-line/On-site
Seminar/
Exhibition/
training
Trade fairs
Sponsor
companies
to attend
trade fairs
overseas
or locally.
2. Non-financial
2.1
Marketing
Mission/
Receptio
n
194
On-site
visits
Sponsors
hip for
on-site
visit to
factories
of
business
partners
overseas.
Verification of
company names
Issue
directories
of
Vietnames
e
companies
in the
various
sectors to
promote
to Dutch
companies
Website
directori
es of
Vietnam
ese
compani
es in
the
sector
accesse
d by
Dutch
compani
es
Promotional activities
Verify
companie
s so that
they can
join key
internatio
nal
forums
within
promisin
g sectors
Blogs
on
Vietnam
ese
industri
es/Dutc
h
industri
es
Facebook
, Twitter
on
Vietname
se
industrie
s/Dutch
industrie
s
Advertising
Training in marketing
skills such as
exhibition skills, etc
2.2
Manufacturing
Training on
production processes
Online
marketin
g courses
Key tips
in
producti
on
process
booklet
Compani
es to join
forums
to share
ideas on
improvin
g
195
Training
on
different
marketin
g skills
Training
on
productio
n process
technical
processe
s
Technical support in
analysing production
process
CBI
technical
experts
to visit
companie
s
Need training support

for human resources
-more training
required
2.3
Cooperat
e with
colleges
in
Vietnam
to design
short
practical
courses
with
consultan
cy from
Dutch
experts
Technology
Training on new
technology
Training
on new
technolo
gy
Technology transfer
2.4
Business
development
activities
New market
information
Booklet
on
Dutch
market
Seminars
/training
on Dutch
market
196
New technology
requirement/
standards
New business
opportunities/
partner matchmaking
Booklet
on
Dutch
market
technolo
gy
standar
ds
Seminars
/training
on Dutch
market
technolo
gy
standard
s
Directorie
s of Dutch
companies
sent to
Vietnames
e
companies
Buyers/s
ellers
reception
197
Buyers/sel
lers
exhibition/
trade fairs
Some activities can be applied and carried out from the matrix:
Directories of Dutch companies to be sent to Vietnamese

companies
Sponsorship for companies to advertise on Dutch associations
websites
Sponsor companies to attend trade fairs overseas or locally
Sponsorship for on-site visits to factories of business partners
overseas
Issue directories of Vietnamese companies in the sectors in order
to promote them to Dutch companies
Website directories of Vietnamese companies in the sector
accessed by Dutch companies
Verify companies so that they can join key international forums of
promising sectors
Blogs on Vietnam industries/Dutch industries
Facebook, Twitter on Vietnam industries/Dutch industries
Online marketing courses
Marketing training courses on different marketing skills
Key tips in production process booklet
Companies to join forums to share ideas on improving technical
process
Training on production processes
Booklet on Dutch market technology standards
Booklet on Dutch market (general)
Training on new technology
Cooperate with colleges in Vietnam to design short practical
courses with consultancy from Dutch experts
Visits from CBI technical experts to the companies
Buyers/sellers at exhibitiona/trade fairs
Buyers/sellers reception
Seminars/training on Dutch market technology
Objectives of CBI and partners for promising Vietnamese companies

(from my perspective):
Build up effective and efficient programmes and optimise the

benefits for Dutch and Vietnamese companies as a result.
Suggestions
The CBI has already carried out many programmes in Vietnam with good
results. My proposals are largely based on the current activities of CBI
together with some different approaches, with a view to making all
supporting programmes more effective and efficient.
To achieve the objective, some suggested approaches and action plans
include:
198
Utilising resources from related partners and having a clear

implementation plan for all resources.
Building up one team of 2 permanent consultants in each area (2
key economic areas, Hanoi and Ho Chi Minh City) who would be in
charge of technical and marketing. These 2 teams will have close
contact with companies and make frequent visits to companies in
the programmes.
The programmes supporting exports from/imports to Netherlands
are separate.
Outlines of support programmes for 3 sectors: electronic, electrical

equipment, moulding manufacturing:
Select a pilot team of 8-10 companies in each sector based on their

potential and enthusiasm to join CBI programmes. The pilot
programmes should be open to a limited number of companies with
high commitment from both sides.
Consultants to study the companies needs in more depth and
evaluate the businesses. These studies and evaluations will help
the consultants understand and identify the real needs of the
enterprises and ensure that the supporting programmes are
appropriate for the companies needs.
Consultants can then group companies into similar needs, e.g.
companies lacking skills in business development and marketing,
businesses wishing to improve their production processes and other
prominent needs such as Dutch market information and technical
requirements, etc.
Design business-supporting activity programmes in 1 year for each
group (maximum 3 activities/year) with clear objectives, timelines
and outcome evaluation.
In practice, activities can be the same for companies in different
groups, however, the follow-up can be different in each company.
Follow-up activities are extremely important. If this involves
training, the follow-up will help companies to remember to apply
the skills they have learnt in their businesses. If this concerns an
exhibition, the companies are encouraged to follow-up the potential
partners they meet, etc.
Follow-up activities carried out by consultants are scheduled
quarterly, during visits to companies to get feedback.
The active participation from companies is encouraged and
evaluated using company scorecards. If a company does not
participate actively, they will not be eligible for next years
programme.
199
Annex 14 - doing business in vietnam

FOREIGN INVESTMENT IN VIETNAM
In recent years, especially after Vietnams accession to WTO in 2007,
Vietnam has become an emerging destination for investment. Many
investors see a promising, more transparent, predictable, stable and
equitable business environment in Vietnam, with accelerated economic
reform, and a strengthened rule of law.
In accordance with the current laws, investments can take the form of
direct and indirect investments.
1. Direct investments include the following activities:
Establishing economic organisations in the form of 100% capital of

domestic/foreign investors (also called 100% foreign owned
enterprises);
Establishing joint venture economic organisations between
domestic and foreign investors (JV);
Investing in the contractual forms of Business Cooperation Contract
(BCC), Build Operate Transfer (BOT), Build Transfer
Operate (BTO), and Build Transfer (BT);
Investing in business development
Purchasing shares of or contributing capital to the companies to in
order to get involved in the management of Investment activities;
Investing through a merger and acquisition approach.
2. Indirect investments include the following investment activities:
Purchasing shares, stock, bonds;

Investing in securities or investment funds;
Investing in other intermediary financial institutions.
There are many methods for a foreign company to expand their business
to the Vietnamese market:
1. Representative Office or branch: Foreign investors may also create a
commercial presence in Vietnam by establishing a representative office or
a branch. A representative office has no legal status and is not permitted
to conduct any business activities in Vietnam. The Chief Representative
does not have the authority to sign any economic or commercial contracts
with Vietnamese businesses on behalf of the parent company unless
he/she is authorised by the parent company.
A branch is allowed to conduct business activities in Vietnam. Branches in
Vietnam are strictly controlled and closely monitored by the Government
Agencies, such as banking, insurance, legal services, securities and fund
management.
200
2. Investment in Buying Shares of Vietnamese Shareholding Companies:

Foreign investors may buy shares in newly equitized state-owned
enterprises or shares issued by shareholding companies, and contribute
towards the legal capital of limited liability companies, partnerships and
cooperative unions. The value of shares sold to foreign investors must not
exceed 30% of the company's total shareholding.
3. Agency and Distributor Relationships.
Foreign companies may function as agencies and distributors for
Vietnamese companies. Technology and trademark license agreements
must be properly registered with Vietnamese authorities.
4. Franchising.
Many domestic companies have begun to employ these regulations to
establish franchises for coffee shops and convenience stores.
Legal entities
To carry out a project, an investor must set up a legal entity. There are 4
forms of entities in Vietnam:
Limited Liability Company (LLC): is an enterprise that has legal

person status. They are either a single-member Limited liability
company or accommodate more than one member.
Joint-stock Company: Shareholders may be organisations or
individuals; there must be a minimum of 3 shareholders but there
are no limits on the total number of shareholders.
A partnership is an enterprise which is owned by at least two
members. A partnership is not permitted to issue shares.
A private enterprise is an enterprise owned by one individual who is
liable for all activities of the enterprise by his/her assets.
TAX SYSTEM IN VIETNAM

Companies established in Vietnam must pay tax on their income. A foreign
enterprise with a permanent establishment in Vietnam must pay tax on all
income in Vietnam and on foreign income that relates to the permanent
establishment. A foreign enterprise without a permanent establishment in
Vietnam must pay tax only on income arising in Vietnam.
Most foreign investments and foreign investors will have to pay the
following taxes:
Corporate income tax

Value added tax
Export/Import duties
Special sales tax
Personal income tax of Vietnamese/ expatriate employees
201
KEY POINTS TO START

Culture and Communication
Greet your Vietnamese business partners by name - make an effort

to pronounce the name correctly (e.g. Mr Nguyen Van Nam would
be Mr Nam, Nguyen is the family name);
Stress mutual cooperation (technology transfer/training) and

mutual benefits. Avoid any suspicion regarding motives;
Socialise without being lavish;
Avoid conflict (loss of face), retain a sense of humour;
Be patient; things do not work at the same pace as in the West.

Avoid getting frustrated;
Build relationships first. Business will not happen without them;
Explain everything clearly, over and over again if necessary.

Business Tips
Visas are required. Check with the nearest Vietnamese Embassy;

Make contact at an early stage with the decision-makers at all
levels;
Seek assistance from the Vietnamese Chamber of Commerce and
Industry and other Governmental organisations working to build
business in Vietnam. These organisations have influence and a
wide range of contacts;
If you are planning to set-up in Vietnam, consult a lawyer about
the possible options and how you plan to conduct business there.
There are limits on what some types of business entities such as
Representative offices can do;
Use an interpreter at meetings. Immediately follow-up any
agreement you may have reached, in writing. Yes, may not mean
yes; it may mean yes, I understand what you are saying;
At a working level the bureaucracy can sometimes be frustrating,
pedantic and even seem obstructive. But things usually work in the
end;
Shirt and tie is acceptable business wear for everyday meetings.
You may wish to wear a jacket for more formal events;
Use a business card. Present it with your right hand or two-handed.
Money Tips
The Vietnamese Dong (VND) is not convertible and there are

controls on foreign exchange transactions. Current rate of
exchange is EUR1.00 = VND28,500
Remittance of foreign currency outside of Vietnam is only allowed
for certain proper purposes such as payment of goods and
services (subject to the importer having an import licence and
submission of other documentary evidence of the import, e.g.
purchase contract, customs clearance documentation etc).
Remittance of dividends is subject to Tax Authority clearance;
202
Letters of Credit are a common method of payment when exporting

to Vietnam. Foreign exporters should have a Letter of Credit
opened by a foreign bank with a branch in Vietnam;
Seek legal/banking advice if you are not sure.
203
Annex 15 guidance for dutch companies for

obtaining support in the vietnamese market
Expanding business overseas is an inevitable trend in global business.
Dutch companies who want to look for Vietnamese companies as
manufacturing partners, outsourcing partners, or local distributors for
products and services, or investment partners can follow some of the
channels and use the contacts provided in Annex 2 List of supporting
organisations in promising sectors:
The first steps are to gather information, conduct research about new
markets, build up your network, and find potential business partners.
There are many ways to find support in exploring a new market. Here are
7 ways that are worth considering:
1. Trade Directories and Websites:
Companies can have these Directories published in Vietnam and collect
information from websites (such as: www.yellowpages.vn). They provide
information on government and private-sector services, markets, industry
sectors, and potential partners. They also offer statistics and trade leads.
It could, however, lead to an excess of information which requires much
revalidation.
2. Vietnam Trade Offices:
Vietnam Trade Offices are established in over 40 countries all over the
world. As part of the Embassy of the Socialist Republic of Vietnam, their
mission is to help Vietnamese businesses who wish to expand their
businesses overseas or find business partners in foreign markets. The
Vietnamese Trade Office under The Embassy of the S.R. of Vietnam in the
Netherlands can be found in The Hague.
3. Dutch Embassies and Consulates in Vietnam:
Similar to Vietnam Trade Offices, Dutch Embassies in Vietnam have their
own commercial departments located in the two big commercial cities of
Hanoi and Ho Chi Minh City. These provide services to companies from
their country to do business and/or sell products or services in the
Vietnamese market. Their (fee-based) services will provide you with
tailored market studies on your specific enquiry.
4. Trade Shows or Market Visits (See Annex 1 List of Vietnamese
Trade fairs in promising sectors)
You will not be successful unless you visit the target market yourself or
attend Trade Shows. This can help you study the market at first hand and
identify and build up strong relationships with local business partners. You
can talk directly to potential buyers/sellers/manufacturing partners and
learn everything you need to know about the market, local regulations,
competition and distribution channels. You can find information on
upcoming trade shows on websites and use it to prepare for business
trips. To optimise the result of your market visit, start preparing and
arranging meetings with key contacts and business partners around 2-3
months in advance.
5. Government Trade Promotion Organisations
204
In Vietnam there are some governmental trade promotion organizations

such as Vietrade, and some State Departments. The main purpose of
these agencies is to support companies doing business in the Vietnamese
market through their work on policies in the sector, by issuing a
guidebook on Vietnamese business, organising trade fairs, or hosting
market visits/missions, etc. The government trade promotion
organisations offer very basic information for your specific enquiries.
Although this information will be accurate, it may not help you much as it
is not tailored to your companys needs. Some medium-sized and large
enterprises in some specialised industries such as infrastructure, oil and
gas, etc will need much support from these organisations in meetings with
government officials.
6. Non-Government Trade Support Institutions
This includes the Vietnam Chamber of Commerce and Industry (VCCI),
Investment and Trade Promotion Center (ITPC) and other Product-Based
Associations such as VAMI Vietnam Association of Mechanical Industry,
etc. VCCI is present in Hanoi, Ho Chi Minh, Can Tho, Vung Tau, Da Nang
and has other representative offices in many cities. Product-based
associations are located in big cities; they are still young and have not yet
gathered members from across the whole country. Their job is to check
out local partners, arrange meetings and provide other services, such as
organising seminars for companies (with the corresponding charges).
Being independent and non-governmental, these organisations also offer
supporting services and can make business partners recommendations
through their trade missions. They do not, however, have sufficient
resources to provide tailored market studies and responses to your
detailed enquiries.
7. Trade Service and Consulting Companies
You can also use a Consulting company. They provide a comprehensive
service for customers at any stage of your companys development and
offer a wide variety of trade, financial and consulting services including
market research, business-matching, tailored business representation,
market visit preparation, etc. These companies have reliable partners and
a clear understanding of the market. Consulting companies build trust and
reputations based on their knowledge and every member of staff will be in
charge of a few sectors, so they have time to concentrate on every client.
205
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CBI Import

(15 January 2014)

Metalworking Market Analysis 15 January 2014

Background and introduction to the market analysis .....................................................14

Approach and Methodology ................................................................................15

Vietnamese economy overview ..................................................................................16

Historical overview: ..........................................................................................16

Vietnamese country data and economy overview: ................................................17

Overview of industry per region .........................................................................21

Electronic manufacturing/assembly sector ...................................................................27

Overview of Vietnams electronics manufacturing sector ........................................27

Government policies .................................................................................28

Manufacturing, Export, Domestic market, and Foreign Direct Investment in

Internal/external factors affecting the Vietnamese electronics manufacturing

Internal factors ........................................................................................36

External factors ........................................................................................38

SWOT Analysis of Vietnamese electronic manufacturing sector ...............................39

Electrical equipment manufacturing sector ..................................................................43

Overview of the Vietnamese electrical equipment manufacturing sector ..................43

Manufacturing, the Domestic market, Export, and FDI ...................................45

Sales/Export and installation: .....................................................................51

Next step recommendations ..............................................................................42

Internal/external factors for electrical equipment manufacturing companies ............52

Internal factors: .......................................................................................52

External factors: .......................................................................................53

SWOT Analysis of the electrical equipment manufacturing sector ............................53

Conclusion - Opportunities for Dutch companies in the electrical equipment

Next step recommendations ..............................................................................55

Moulding manufacturing sector ..................................................................................56

Metalworking Market Analysis 15 January 2014

Overview of the moulding manufacturing sector ...................................................57

Government policies .................................................................................58

Internal/external factors on moulding manufacturing sector ..................................61

Internal factors: .......................................................................................61

External factors: .......................................................................................62

SWOT Analysis: ...............................................................................................62

Comparison with two key competitors .................................................................62

Opportunities for Dutch companies in the moulding sector .....................................63

Next step recommendations ..............................................................................64

Promising sectors for exports from the Netherlands ......................................................66

Agricultural industry .................................................................................................66

Rice production: .......................................................................................67

Fruit and vegetables: ................................................................................68

Vietnamese agricultural equipment sector: ..........................................................71

Overview of agricultural equipment sector: ..................................................71

SWOT analysis for Dutch agricultural equipment in Vietnam ...........................72

Agro processing and packaging market ...............................................................73

Overview of the agro processing and packaging sector ..................................73

Background study: ...........................................................................................67

Overview of horticultural equipment ............................................................75

SWOT analysis of Dutch horticultural equipment in Vietnam:..........................76

Distribution Channels for agricultural/horticultural/agro processing and packaging

Market Entry Strategies for agricultural/horticultural/agro processing and

Next step recommendations ..............................................................................78

Oil and gas ..............................................................................................................80

Upstream and Midstream ..................................................................................80

Reserve potentials ....................................................................................80

Exploration and production ........................................................................82

Sector organisation ..........................................................................................86

Regulatory environment ....................................................................................87

SWOT analysis .................................................................................................87

Metalworking Market Analysis 15 January 2014

Market entry ....................................................................................................88

Next step recommendations ..............................................................................91