Vietnam not just an equipment dumping ground

The Ministry of Science and Technology mulls proposing the government temporarily ban the import of used machinery and equipment in 18 production sectors to prevent obsolete machines and equipment arriving from China.

Earlier, the ministry (MoST) forwarded a dispatch to relevant ministries and people’s committees warning of China’s recent move which saw 2,225 backward enterprises shut up shop on the back of poor performance. This means a series of outmoded and fuel intensive machines and technologies will no longer be used in China.

The possibility for less-than-modern machinery assemblage to enter Vietnam is big since Vietnam neighbours China and many local firms have imported equipment and technology from China to save start-up business costs.

According to MoST, these 2,255 enterprises belong to 18 production sectors such as iron and steel, chemical, metallurgy, cement, glass, paper, alcohol, food, tanning and textile-dyeing etc.

Parallel to seeking prime minister’s permission to temporarily prohibit the import of used machines, equipment, and technology in these 18 areas, the MoST proposes interweave machinery, equipment and technology import management into the draft decree to amend Decree 12/2006/ND-CP guiding the implementation of some articles in the Enterprise Law 2005.

Besides, developers would be required to make accountability of issues relative to machinery, equipment and technology to be imported for their projects when filling procedures to competent state agencies sourcing investment certificates.

The MoST argued current investment records seriously lack information describing project equipment and technology, burdening the work of appraising bodies.

In fact, during 1995-2004 the steel sector imported a huge volume of equipment. That was because many well-off private steel traders jumped into opening steel plants in this period, according to Vietnam Steel Association chairman Pham Chi Cuong.

“Having poor knowledge about technology, many local investors by that time imported low cost obsolete production lines from China in hope of shortening time for capital recouping,” said Cuong.

Cuong, however, said things have now changed. “Firms have drawn practical experiences from painful practices. From 2003 until present a sequence of new steel plants came on line employing state-of-the art equipment lines,” said Cuong.

In the paper industry, three paper making machines with capacity of 50,000 tonnes/year/machine will be put online in early 2012. In 2011, a 200,000 tonne capacity equipment line was commissioned in 2011, according to Vietnam Paper Association general secretary Vu Ngoc Bao

Bao also said most private paper enterprises in Vietnam now employed equipment with over 50,000 tonne capacity per year, while removed Chinese equipment having capacity of below 50,000 tonne capacity per year.