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Electrical equipment Enterprises: Strategies to dominate domestic market

15.07.2012

The strong growth of the Vietnam construction industry completely changes the market of electrical materials

The strong growth of the Vietnam construction industry completely changes the market of electrical materials and appliances supply industry. Previously, electrical equipment enterprises focused mainly on supplying materials and common electric lighting equipment, but now many companies have invested in modern electrical equipment production technology chains for industrial sectors and constructions.

 

One of the electrical device market segments which are aimed by many companies nowadays is to produce electrical switchboards – the indispensable equipment in manufacturing businesses, industrial zones, plants or high-rise buildings. Each type of electrical switchboards has different usage. For example, distribution boards are used to distribute power from place to place safely; to protect power overload, to provide circuit breaker... ATS cabinets have the usage of automatically switching power supplies. In case the electricity is cut, this device will automatically switch to the power generator. And when the electricity returns, the ATS will transfer from the generator to the grid, etc.

 

There has been a number of domestic enterprises that have produced electrical switchboards and have sold in the market, but actually they produce the covers only. The core switchboard equipment is still mainly imported. Therefore, the quality is not guaranteed and the cost is very high. In large-scale constructions, the electrical supply and installation contracts are often undertaken by foreign contractors. However, this situation is changing. Recently, many electrical appliance enterprises have realized the potential of this market and invested tens of billion VND to import modern electrical switchboard production lines to produce high quality electrical switchboards, serving domestic demands.

 

In particular, on 22nd June, Hawee Vietnam Production and Trading JSC has officially opened the Hawee electrical switchboard production factory in Tien Son Industrial Zone (Bac Ninh). This factory is considered as the largest and most modern one in Vietnam with two lines of punching, cutting, folding machines from Trumpf Company (Federal Republic of Germany) and all ancillary equipment is also imported from countries with leading industry development (G7). Products of the factory include: electrical switchboards, cable ladders, cable trays, supporting systems. They are manufactured based on module design for mass production, to ensure progress and adapt to all changes, to expand without breaking system structure. Product quality is guaranteed by qualified materials, such as Nisshin Steel panel (Japan), Posco (South Korea), copper (Thailand) and is managed by the ISO 9001: 2008 quality management system. 100% of products are tested at the laboratory of the factory before shipment. Mr. Trinh Van Ha - Chairman of the Hawee Board of members said, so far, Hawee was known as a high caliber electrical contractor, which had the capacity to carry on the entire M&E items of large-scale projects, such as: Ecopark, Crown Plaza, Mipec Tower, LUGIACO ...

 

In the trend of development and the need to proactively provide specific supplies for many projects, Hawee has decided to build the factory to produce electrical switchboards, cable ladders, cable trays, air ducts and all kinds of supporting systems, providing high quality products to fit the nature of each construction which Hawee is taking part in constructing, as well as to provide products for professional contractors domestically and internationally. The electrical equipment market in general, and electrical switchboard market in particular are very potential and bustling. But according to Mr. Tran Van Quan - Director of Quan Tran Electrical Production, Trading and Construction Co., Ltd. - if the electrical appliance enterprises in Vietnam want to occupy the domestic market, besides strongly investing in equipment and modern technical production lines to produce high quality products, ensuring international standards, they also have to ensure competitive prices compared with imported products.

 

Especially, after-sales service must be quick and convenient, because electrical devices always require a very high level of safety, quality assurance to operate safely and continuously. This is one of the important factors for the Vietnamese products being able to reach Vietnamese constructions. According to calculations by economists, electrical equipment and lighting account for about 10% of the total cost of construction and there is a growing trend. So to win supply and electrical installation contracts over the foreign contractors, there is no other way that Vietnamese electrical appliance enterprises must quickly consolidate and build brand’s reputation for themself .

 

Besides, the State should have policies to support the domestic electrical appliance enterprises to involve in many constructions, major projects with state enterprises. With other large-scale civil constructions, the State should create mechanisms for electrical equipment businesses taking opportunities, winning the construction and installation contract. If the domestic electrical equipment companies win 80% of electrical construction and installation contracts, with the earning rate of 10-15% of each project’s value, each year Vietnam can save hundreds of millions of dollars to the economy.

 

According to the development plan of electrical equipment industry, in period of 2011-2015, this sector will reach the growth target of 18% / year; reach 15% / year in period of 2016-2025. The export turnovers of high-quality wires and cables have increased by 35% / year, to the year 2025, Vietnam can produce and supply full electrical equipment sets in the power line projects and substations...