작성일자: 2013.8.14

작성자: Ms. Do Minh Thu (dm.thu@kotra-hanoi.org.vn)

 

 

1. Overview of Vietnam mechanical engineering industry

 

 ○ Mechanical engineering industry development would be a step towards improving the socio-economic infrastructure that serves national industrialization and modernization. However, ten years after implementing the Prime Minister’s resolution on the mechanical industry development strategy, Vietnam mechanical industry is not moving fast forward. Under the strategy, Vietnam strived to churn out the products which meet 40~50% of the domestic demand and export 30% of the total output. However, most of the goals set in the strategy remain unreachable.

 

 ○ Currently, Vietnam has about 3,100 mechanical engineering businesses, 450 of them are state-owned and 156 private companies, the remains are small-scale manufacturers. Over the past ten years, the mechanical industry in Vietnam has made some modest achievements. The shipbuilding industry manufactured 6,500~53,000 ton ships of international standard, car-carrying ships with a capacity of 4,900 vehicles, and floating crude oil 150,000 tonnage container depots. Some mechanical businesses have become engineering, procurement, and construction contractors in 300~750㎹ thermal electric power projects. The domestic car industry has produced and assembled 80-seat buses, trucks of all types, and other specialized vehicles, while the oil and gas industry has manufactured and successfully launched a 90m-deep self-lifting oil rig. In terms of mechanical engineering, Vietnam has manufactured 500㎸ transformers and mechanical products bearing Vietnamese trademarks are equal to those from other developing countries.

 

 ○ However, looking back over the mechanical industry development strategy until 2010, only 34% of the country’s mechanical product demands were met, undershooting the 40~50% set target. Complete equipment production satisfied approximately 10% of demand. Export value growth reached just 23.4%, below the set target of 30%.

 

2. Market of cutting tools in Vietnam

 

□ Market size and trend

 

 ○ In recent years, it is clear that the growth of mechanical engineering industry in Vietnam has led to the increase of demand for machine tools in general and cutting tools specifically. The overall metal cutting tools market is expected to improve as the economy improves and manufacturing picks up. Carbide tools are rapidly replacing steel in the metal cutting and forming industries. The metal finishing segment on the other hand is experiencing a surge in the use of super abrasives.

 

 ○ The cutting tools market in Vietnam is plentiful of different kinds of products, namely tools for milling, drilling, tapping, reaming and broaching, most of which are imported products from other countries. The amount of cutting tools manufactured locally is still small and cannot meet the demand of the industry at the moment. It is estimated to account for only 10~15% of the whole market size. The accurate statistics of market value of cutting tools in Vietnam is not available at the moment; however, from the imported statistics of machine tools into Vietnam, the market size of cutting tools market can be estimated as the following chart.

 

Source: ITC calculations based on UN Comtrade statistics and KOTRA’s Survey

 

 ○ Vietnamese market for cutting tools has witnessed the appearance of a wide range of brands originated from many different countries. According to the opinion of some Vietnamese distributors, the demand trend of cutting tools slightly increases in recent years and focuses on products manufactured by Chinese, Japanese and German enterprises. The number of products originated from China is estimated to account for approximately 37% of the market; however, a large number of which is imported illegally and despite the low price, the poor quality of them is constantly shifting the choice of Vietnamese buyers. In the next few years, it is expected that the share of other foreign manufacturers from Japan, Germany, Singapore and Korea will have a chance to improve and lead the market.

 

Source: ITC calculations based on UN Comtrade statistics and KOTRA’s Survey

 

 ○ Some popular brands which have gained awareness among Vietnamese buyers can be listed as Nachi, Yamawa, Mitsubishi(Japan); Ruko, Stock(Germany); Marox, CMTEC(Taiwan).

 

□ Import Statistics

 

 

 

 

Source: ITC calculations based on UN Comtrade statistics

 

 ○ As can be seen from the chart, the value of imported cutting and milling tools into Vietnam in recent years almost witnessed an upward trend, except for tools for taping or threading. The value of imported tools for drilling was the largest, which is 36,658 thousand USD in 2012, increasing 70% compared with that of 2011. The average growth rate of market for tolls for this type of product is approximately 40%, which shows a stable upward trend during the past few years.

 

 ○ The value of imported products for taping, threading, broaching and milling in recent years are quite equal, ranging from about 4,000 to 8,000 USD thousand. While the market of tools for broaching grows stably with the rate of 25%, the value of imported tools for taping or threading fluctuates and notably sees a decrease of about 32% in 2012.

 

 ○ The market of tools for milling witnessed a considerable increase in 2012, reaching more than US$ 8,000 thousand. After a stable growth of about 20% during the period 2007~2011, this number reached its peak at 8,317 USD thousand.

 

 ○ Regarding tools for taping and threading, Japan and Germany are the largest players in the market, accounting for 30 and 18% respectively. Also, Japan is the most active player in the market of tools for boring or broaching. However, China dominates the market of tools for drilling and milling, with the share of 60 and 30% respectively. On the other hand, products originated from Republic of Korea still do not gain much awareness among Vietnamese customers. The number of products imported from Korea in 2012 only accounts for 3.4% in the market of tools for taping or threading; 1.8% in the market of tools for drilling and 0.5% in the market of tools for boring or broaching.

 

□ Product and Pricing

 

No.	Product Information	Model	Brand	Retail Price (US$)
1	Straight Shank Drill	F10.0	Nachi	4.15~4.75
			Ruko	2.8~3.5
2	Twist Drill	F20.0	Nachi	49.0~51.5
			Ruko	31.0~32.3
3	End Mill	4S F10.0	Nachi	9.0~9.6
			SWT	1.6~2.0
		4S F20.0	Nachi	20~21
			SWT	5.7~6.0
		2S F10.0	Nachi	8.7~9.0
		2S F20.0	Nachi	20
4	Fluteless Tap	M10.0x1.5	Nachi	12.0~12.5
			Ruko	7.5~8.0
		M20.0x2.5	Nachi	50.0~51.5
			Ruko	25.0~26.5
5	Spiral Tap	M10.0x1.5	Nachi	12.7~13.5
			Yamawa	9.5~10.3
		M20.0x2.5	Nachi	56.0~57.6
			Yamawa	25.4~26.0

 

□ Distribution Structure

 

 ○ As can be seen from the chart below, overseas manufacturers of cutting and milling tools may find an authorized agent in Vietnam or sell their products directly to trading companies which are specialized in importing mechanical tools.

 

 ○ It is recommended to find an active trading company which has a wide distribution network all over the country and is capable of importing regularly with large volume. According to some experts in the field, if foreign manufacturers can take advantage of the distribution network that Vietnamese trading companies may provide, they may gain big time.

 

 

□ Import Tariff

 

HS Code	Description	Unit	MFN	ACFTA	AKFTA	ATIGA	VAT (%)
8207	Interchangeable tools for hand tools, whether or not power-operated, or for machine tools (for example, for pressing, stamping, punching, tapping, threading, drilling, boring, broaching, milling, turning or screw driving), including dies for drawing or extruding metal, and rock drilling or earth boring tools.
8207.40.00	- Tools for tapping or threading	Unit	0	0	0	0	10
8207.50.00	- Tools for drilling,    other than for rock drilling	Unit	0	0	0	0	10
8207.60.00	- Tools for boring or broaching	Unit	0	0	0	0	10
8207.70.00	- Tools for milling	Unit	0	0	0	0	10
8209.00.00	Plates, sticks, tips and the like for tools, unmounted, of cermets	Unit	0	0	0	0	10

 

 

3. Useful Contacts

 

1	Company Name	Bac Thang Long Intraco Joint Stock Company
	Contact person	Mr. Nguyen Chi Cong
		Position	Director
		Mobile phone	+84-944 058 686
		E mail	cong-nc@bacthanglong.com.vn
		Communicate language	English, Vietnamese
		Preferred contact method	Phone, E mail
	Business type	Private Company
	Business field	Importing and trading in cutting tools
	Address	Dai Do, Vong La, Dong Anh Dist., Hanoi, Vietnam
	Tel	84-4-3953 3225
	Fax	84-4-3953 3226
	E mail	sales@bacthanglong.com.vn
	Website	www.bacthanglong.com.vn
	No of Employees	15
	Established year	2010
	Registered capital	US$ 200,000
	Import countries	Japan, Taiwan
	Level of interest	(  ) Very interested     (Ⅴ) Interested     (  ) Regular
	Remark	- The company is specialized in importing and distributing different kinds of cutting tools, measuring tools, abrasives, etc. of many well-known manufacturers such as Nachi, OSG, Yamawa, Sankyo, etc. - According to Mr. Cong, the market of cutting tools is not strong this year due to the economic downturn. However, he is willing to receive catalogue and price quotation from YG-1 to consider.

 

2	Company Name	Nhan Chinh Mechanical Joint Stock Company
	Contact person	Mr. Duong Quoc Huy
		Position	Sales Manager
		Mobile phone	+84-936 222 204
		E mail	office@cokhinhanchinh.com
		Communicate language	English, Vietnamese
		Preferred contact method	Phone, E mail
	Business type	Private Company
	Business field	Importing and trading in mechanical tools and equipment
	Address	Room 902, Building 17T1, Trung Hoa Nhan Chinh New Urban Area, Cau Giay Dist., Hanoi, Vietnam
	Tel	84-4-6281 6151
	Fax	84-4-6281 6152
	E mail	office@cokhinhanchinh.com
	Website	www.cokhinhanchinh.com.vn
	No of Employees	23
	Established year	N/A
	Registered capital	N/A
	Import countries	Japan, Taiwan
	Level of interest	(  ) Very interested     (Ⅴ) Interested     (  ) Regular
	Remark	- The company has had a lot of experience in the field of cutting tools, diamond tools, bearing, measurement equipment and hand tools. - The company currently distributes cutting tools of some brands such as Guhring, Yamawa.

 

3	Company Name	Tung Ngu Kim Mechanical Co., Ltd
	Contact person	Mr. Nguyen Thanh Trung
		Position	Director
		Mobile phone	+84-985 999 953
		E mail	nguyentrung1705@gmail.com
		Communicate language	English, Vietnamese
		Preferred contact method	Phone, Email
	Business type	Private Company
	Business field	Importing and trading in mechanical tools and equipment
	Address	No. 48, Ta Uyen St., Wd. 15, Dist. 5, HCMC, Vietnam
	Tel	84-8-3955 3508
	Fax	84-8-3955 3508
	E mail	sales@tungngukim.com
	Website	www.tungngukim.com
	No of Employees	20
	Established year	N/A
	Registered capital	N/A
	Import countries	Japan, Korea, Taiwan
	Level of interest	(  ) Very interested     (Ⅴ) Interested     (  ) Regular
	Remark	- The company specializes in providing all kinds of drilling, tapping, milling tools which are imported from numerous reputable manufacturers from Korea, Japan and Taiwan. - Some notable brands this company is distributing include Nachi, Nickel, Mitsubishi, CMTEC, etc.

 

4	Company Name	Tan Hoang Viet T & E Co., Ltd
	Contact person	Mr. Phan Van Huy
		Position	Sales Manager
		Mobile phone	+84-975 684 435
		E mail	huy_dcm@tanhoangviet.com.vn
		Communicate language	English, Vietnamese
		Preferred contact method	Phone, E mail
	Business type	Private Company
	Business field	Importing and trading in cutting tools
	Address	No. 22/53 Linh Lang St., Ba Dinh Dist., Hanoi, Vietnam
	Tel	84-4-3766 5462
	Fax	84-8-3766 6445
	E mail	tanhoangviet04@hn.vnn.vn
	Website	www.tanhoangviet.com.vn
	No of Employees	30
	Established year	N/A
	Registered capital	N/A
	Import countries	Japan, Korea, USA
	Level of interest	(  ) Very interested     (Ⅴ) Interested     (  ) Regular
	Remark	- The company is a professional trading and technical service company, which is specialized in consulting and supplying many types of cutting tool products such as HSS Carbide cutting tools, CBN and diamond grinding wheels, etc. - Most of their products are imported from USA, Japan and Korea.

 

5	Company Name	Tan Viet Industrial Equipment Joint Stock Company
	Contact person	Mr. Tran The Long
		Position	Sales Manager
		Mobile phone	+84-904 255 494
		E mail	longtt369@gmail.com
		Communicate language	English, Vietnamese
		Preferred contact method	Phone, E mail
	Business type	Private Company
	Business field	Importing and trading in cutting tools
	Address	Yen So, Hoai Duc Dist., Hanoi, Vietnam
	Tel	84-4-8589 2989
	Fax	84-8-3386 0189
	E mail	tanviet.ys@gmail.com
	Website	www.tanviettools.com
	No of Employees	16
	Established year	N/A
	Registered capital	N/A
	Import countries	India, Japan
	Level of interest	(  ) Very interested     (Ⅴ) Interested     (  ) Regular
	Remark	- The company currently provides a lot of kinds of drilling, tapping and milling tools imported from Japan and India. - The company is distributing products of some brands such as Miranda(India), Segawa(Japan).