THACO's mechanical engineering - creating synergy values and improving competitiveness
Developing mechanical engineering into one of THACO's main business sectors
THACO CEO Pham Van Tai has noted that expanding mechanical engineering strategy goes in line with the State's support industry development policies. In industrialization and modernization, mechanical engineering is oriented to act as the core and foundation industry which holds a strategic meaning to fast and sustainable development, enhances autonomy, and ensures the participation in the global industrial production value chain (as per Decision No. 39 of the Government approving Vietnam's mechanical development strategy towards 2025, vision to 2035).
For THACO, promoting support industries based on mechanical engineering is strategic to boost competitiveness, direct foreign investments, research and transfer of new technologies, and other business sectors' development, thus implementing the strategies of localization and efficient participation in the global value chain. This is a concrete step in THACO's multi-industry strategy.
Since 2018, THACO has envisioned to become a leading multi-industry group in ASEAN with substantial contributions to Vietnam's economic development. The group engages in 5 strategic business sectors in Vietnam, including Automotive and Mechanical Engineering, Agri - Forestry, Investment in transport infrastructure, industrial parks, and urban areas, Commerce, Logistics.
Expansion into new areas as agri and construction requires the support from mechanical engineering in manufacture farming equipment, processing machines, agricultural transportation means, pre-engineered buildings, and mechanical components in construction. On the other hand, it has been reported that although Vietnam's mechanical engineering witnessed some particular growth, the sector has not been able to meet the market demands. At present, the demands for mechanical products, especially agricultural machines, such as harvest machines, plough machines, agricultural process machines, dryers, grinding machines. Further development of mechanical engineering will potentially meet the requirements from the market, diversify customized products.
To develop the sector, THACO makes use of its technology infrastructure in automotive engineering to produce related products, gradually completing the value chain from product research & development to production, distribution. After 16 years of investments in Chu Lai, THACO has formed a Mechanical Zone which specializes in producing cars and car parts, and other products for external customers Doosan Vina, General Electric (GE), Makitech (Japan), Agata, Three Stars and others in Central Vietnam. THACO earned a revenue of nearly VND400 billion from these customers. This Mechanical Zone is oriented to become the Central Mechanical Center. In the coming time, In the coming time, the Mechanical Zone continues to survey the customer demands in the central region to further invest in suitable machinery and technology, providing diverse products in line with standard design, high quality, and reasonable prices.
Investments in production expansion, cooperation and partnerships, completing the value chain
Based on the foundation in technologies, equipment, production experience and automotive management expertise, since 2018, THACO has applied mechanical engineering into other areas: agricultural - forestry engineering, construction engineering, and industrial equipment engineering with different types of products - agricultural machines, farming tools (soil tools, planting tools, plant caring tools, harvest tools), specialized equipment (transport equipment in farms, plant picking tools), agricultural engineering and transport service, manufacturing equipment maintenance and repair service, MEP system (air vents and air conditioning, electricity, sewages, sanitary systems), industrial equipment (jig, conveyors, automatic guided vehicles), mechanical engineering, component dismantling service, packaging, and scrap recycling.
In order to expand mechanical engineering, apart from the mechanical zone, Steel Factory, Mould Factory, Mechatronics Company, Agricultural Machine Company, THACO has just established the Mechanical & Agri Engineering Company, Industrial Equipment Company via cooperation and partnerships with experienced and competent enterprises to enhance business, technology transfer, or to acquire patents from farmers and organizations for product development. The companies specialize in product R&D, market expansion and customer development, installation and maintenance of agri-forestry, construction engineering products, and industrial equipment. In March 2019, THACO started 2 projects: Agri-Forestry Industrial Park and expanded Mechanical & Automotive Industrial Park. These projects can be considered to be a strategic investment to develop construction engineering, agricultural engineering which attracts further investments into support industries which produce components, improve the localization rates, and reduce product costs.
Cooperation and partnerships act as THACO's strategic solutions in expanding new mechanical businesses. Specifically, in agri and forestry, THACO enforces its cooperation with other enterprises in the same sector in providing mechanized solutions for fruit trees and industrial trees. Meanwhile, the group will also develop its ties with construction enteprises to widen its market for construction engineering and traffic engineering. Lastly, regarding industrial equipment engineering, the company will cooperate with partners in providing the solutions and industrial equipment in the following businesses: automotive, motorcycles, agricultural-forestry product processing, commerce-service.
Especially in agricultural - forestry engineering, THACO has made its distinctive move towards creating new values for agri through industrial management. The company has formed the objective to gradually master the technologies, making high-quality products which are suitable to each area conditions. At present, THACO is providing agri mechanization solutions for Hoang Anh Gia Lai's farms in Laos and Cambodia. At the same time, the group also seizes new cooperation opportunities in manufacturing industrial machinery, researching and developing equipment used for farming, nurturing, harvesting rice plants, fruit trees, rubber trees and other mechanical solutions.
In order to apply mechanization into new businesses, product R&D activities are paid close attention with the Testing Center, Technical Design and Production Line Center in Chu Lai. In addition, THACO recruits more Vietnamese and foreign experts, competent mechanical engineers to improve design capacity, transfers them to Cambodia and Laos to study the synchronous mechanical solutions for fruit and industrial trees, connects with experienced partners in designing controlling systems, completes the industrial equipment solutions in auto industry other sectors (agri-forestry products, and commerce-service).
Vietnam mechanical sector has identified its strategy towards 2025, vision to 2035 as to serve the agri, auto, industrial equipment, electric equipment and support industries. Accordingly, developing mechanical engineering as its core business which focuses on agricultural-forestry, construction, and industrial equipment engineering, THACO has made an appropriate venture in line with the Government strategies, making contributions to the national development, and step by step creating the integrated multi-industry ecosystem with the businesses that can support each other, improving competitiveness and sustainable development.
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