Canon hunts suppliers

The domestic electronics sector has to upgrade to meet needs of Canon Vietnam 
Photo: Duc Thanh

The wholly Japanese owned  printer maker Canon Vietnam, expressed the desire to work with more local suppliers of electronic components at a recent Vietnam Manufacturing Forum 2013 under the theme ‘Technology transfer- a Turning point of Vietnam industries, hosted by the Japan External Trade Organisation (JETRO).

The call was enthusiastically received.  Canon Vietnam reportedly received the proposals for cooperation from Vinaxuki which operates a 12,000 tonne capacity, per year mould casting factory, Hanoi’s Quoc Viet with a factory based in southern Binh Duong province manufacturing air purifiers and industrial dust purifiers, ThyssenKrupp Vietnam Company Limited which supplies stainless steel products and several others.

“Canon wants to buy made-in-Vietnam items for end products manufacture. Top priority products are production materials such as steel plates, plastic and rubber materials, rollers and electronic components like plastic and steel moulds and motors,” said Kinya Okada, Canon Vietnam’s general manager of LBP Purchasing Dept. “Our current 30 suppliers are all Vietnamese companies. In 2012, Canon’s localisation rate reached 64 per cent. We want to expand the rate.”

He stressed that Canon Vietnam wanted to hike localisation rate of not only mechanical items, but also electronic components. 

However, Vietnamese firms are almost absent in the list of manufacturers of electronic components like capacitors, transformers and coils.  Industry insiders said this was partly due to the lack of compelling policy incentives, even though  electrical and electronic fields have existed in most governmental policies in relate to the nation’s supporting industry development in many years. 

Electronics is also the sector facing big opinion divergences before it was placed among six supporting industries prioritised for Japanese government support due the gap in actual development capacity between Vietnamese and Japanese businesses. 

Vinaxuki’s general director Bui Ngoc Huyen said: “We need the government supports in policy, finance, and time for researching and innovating technology and production lines and training staff. Since supportive policies are almost absent, such as current 15 per cent, per year lending rate to short-term loans remains overly high, we need support from the Japanese partner [Canon] in sourcing low-cost credits.”

“We could meet all of the Japanese partner’s requirements once we get low-cost credits,” Huyen noted. 

Nguyen Minh Duc, an expert from Hanoi Municipal Department of Industry and Trade, said hardships in collaborating with Japanese partners were that the cooperation often followed a specific model that was often not based on a general production module for massive production.

Canon dropped anchor in Vietnam in 2001. After it placed its first manufacturing plant in Hanoi’s Thang Long Industrial Park, several dozens satellite Japanese businesses flocked to Vietnam to set up shop. Some of them are Nissei Electric which manufactures metal axles for printers, Santomas specialising in manufacture of precision plastic devices, Fujipla manufacture of electronic plastic cog-wheels or Volex manufacture of electric transmission components, to name a few.