TRUMPF Discusses Opportunities For Growth In Vietnam
At the recent MTA Vietnam 2019 trade show in Ho Chi Minh City, Asia Pacific Metalworking Equipment News (APMEN) spoke with Patrick Kemnitz, General Director of TRUMPF Vietnam and Head of Business Development for Southeast Asia, and Edward Yuen, General Manager for Singapore and Vietnam, about the trends shaping the metalworking industry in the region, challenges and opportunities for growth. They also provided their insights on where the Southeast Asian market is headed in the next years.
WHAT OPPORTUNITIES ARE YOU SEEING IN VIETNAM?
Patrick Kemnitz (PK): Vietnam is a strong and steadily growing market, with a GDP of around five to seven percent. Vietnamese companies have been getting more and more jobs from foreign markets, especially with the ongoing trade war between the United States and China.
This is the current situation. But in the long run, we see huge potential in the Vietnamese market. Its huge population of labour entering the workforce is also a very high potential for growth.
In almost all industries where sheet metal products are needed, such as furniture, elevators, construction, automotive, bicycle, there is an opportunity for doing these metal products locally instead of importing them. So, the increasing localisation of all the industries is a very high potential for businesses.
Edward Yuen (EY): The market now is driven by infrastructure development. You see a lot of construction happening all over Vietnam. Tall buildings, highways, bridges are built—for all these infrastructures, sheet metal works are required. Also due to the tariff issue between China and the United States, you will see a lot of these industries basically restructuring their businesses instead of putting all their eggs in one basket, and some of the international companies investing strongly in Vietnam.
ARE YOU SEEING ANY CHALLENGES IN THE MARKET?
PK: For our customers, one of their challenges is having skilled workforce for their factories.
Therefore, education needs to be tackled: Vietnam needs to have the right education on future technologies. In line with this, we are working with educational organizations like universities and technical colleges to support them with technical input from the industry as investing in people is important for future growth of the whole country.
There are other issues, but I think the opportunities are bigger than these challenges. There is also the opportunity brought by Industry 4.0 and smart factory. This is our theme in this exhibition, ‘Your Smart Factory’, which is about how we can help our customers make the first steps in the direction of a connected production process and to provide all the advantages of having a smart factory. This is really a process that will require a step by step approach. And now is the time for our customers and the industry in Vietnam, because many new factories are being set up here. They are not just expanding their existing factories, but also building new ones. If you have these greenfield projects, you have the opportunity to plan really well from scratch.
HOW IS TRUMPF ADDRESSING THE WIDE SPECTRUM OF MANUFACTURING LEVELS IN SOUTHEAST ASIA?
PK: We established our product portfolio in such a way that we have a solution for customers from all levels. For instance, our entry level machines are strategically positioned to help customers grow their manufacturing process. We also have machines which allows our customers to upgrade into a combination machine to extend their production. And on the very high-end sector we offer fully automated machines and storage systems.
HOW DO YOU SEE THE INDUSTRY DEVELOPING OVER THE NEXT THREE TO FIVE YEARS?
PK: Three to five years in Vietnam, or maybe Southeast Asia in general, is a long horizon. At the moment we mainly still have a positive outlook for the economy. Of course, there are signs that the global economy is slowing down, especially in the machinery industry, but so far these still might be part of the cyclical developments over time. Here in Vietnam, there is positive development. Mostly, all the industries that are relevant for sheet metal production are growing, so we are quite positive for our customers, that they can develop their business in a very positive way as there is still a lot of space to grow. In this environment, we consider TRUMPF as an enabler of this growth.
EY: For Southeast Asia, I think there are good prospects for the next three to five years. The continuing trade war between the United States and China which is not going to end soon are driving a lot of companies to move to Southeast Asia. Whatever products that you are now manufacturing in China and if you have to export it to the USA, you want to avoid getting entangle into this tariff game. Now we see lots of job-shops in Vietnam are loading up with jobs that are shifted over from plants in China. Going forward I believe more manufacturing companies in China will slow their expansion there and instead build up their expansion in SEA instead. In a way you don’t want to put all your eggs into one basket. The other impetus, the cost of manufacturing in those big northern Asian countries are not getting any cheaper and it only makes sense to capitalise on the cheaper labour force; huge available cheaper land and better infrastructure of SEA to grow a business.
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