Decision No. 48/2008/QD-BCT of the Ministry of Industry and Trade approving the planning on development of the electric equipment-manufacturing industry in the 2006-2015 period with a vision towards 2025

DECISION

APPROVING THE PLANNING ON DEVELOPMENT OF THE ELECTRIC EQUIPMENT-MANUFACTURING INDUSTRY IN THE 2006-2015 PERIOD WITH A VISION TOWARDS 2025

THE MINISTER OF INDUSTRY AND TRADE

Pursuant to the Government’s Decree No. 189/2007/ND-CP of December 27, 2007, on the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;
Pursuant to the Government’s Decree No. 92/ 2006/ND-CP of September 7, 2006, on the formulation, approval and management of socio-economic development master plans, and Decree No.04/2008/ND-CP of January 11, 2008, amending and supplementing a number of articles of Decree No.92/2006/ND-CP of September 7, 2006;
Pursuant to the Prime Minister’s Decision No.186/2002/QD-TTg of December 26, 2002, approving the strategy on development of Vietnam’s mechanical engineering industry till 2010 with a vision towards 2020;
In furtherance of the Government Office’s Official Letter No.3174/VPCP-CN of June 11, 2007, on the assignment by the Prime Minister of the Ministry of Industry (now the Ministry of Industry and Trade) to approve the Planning on development of electric equipment-manufacturing industry in the 2006-2015 period with a vision towards 2025;
At the proposal of the Director of the Heavy Industry Department,

DECIDES:

Article 1. To approve the Planning on development of the electric equipment-manufacturing industry in the 2006-2015 period with a vision towards 2025 with the following principal contents:

1. Development viewpoints

a/ To develop the electric equipment-manufacturing industry in accordance with the strategy for development of Vietnam’s mechanical engineering industry till 2010 with a vision towards 2020 and the national planning on electricity development in the 2006-2015 period with a vision towards 2025 taken into consideration;

b/ To develop the electric equipment-manufacturing industry in a stable and sustainable manner, invest in modern technologies and equipment, reduce the consumption of raw materials, fuel and energy for the production of environmentally friendly products with high energy use efficiency;

c/ The electric equipment-manufacturing industry must serve socio-economic develop-ment in combination with national defense.

2. Development objectives

a/ The industry’s production value will increase about 19-20%/year in the up-to-2010 period and about 17-18%/year on average during 2011-2015;

b/ By 2010, to satisfy 60% of the domestic demands for electric wires and transformers in the 2011-2015 period, then over 70% by 2015. To satisfy 55% of the domestic demands for electric motors and some types of common generators by 2015;

c/ By 2015, Vietnam’s electric equipment-manufacturing industry will reach the regional advanced standards on technologies to manufacture transformers, generators’ electric motors, medium- and high-voltage instruments, electric wires and cables for domestic consumption and export;

d/ The industry’s export turnover is projected to reach 18%/year in the 2011-2015 period and 15% in the 2016-2025 period;

e/ By 2025, Vietnam will be capable of manufacturing and supplying complete electric equipment sets for transmission lines and transformer stations.

3. Development orientations

a/ To make new and intensive investment in advanced technologies for the development of the production of products in which Vietnam has an advantage, raising the manufacturing capacity and the competitiveness of products of enterprises; to encourage investment in the production of import substitutes with high economic efficiency and step up export to the region and the world;

b/ To encourage all economic sectors to participate in the industry’s development. To diversify forms of investment in research and development, and technology transfer; to enter into joint ventures and association for production, advertisement and sale;

c/ To attach importance to the research into, designing and manufacture of, new and high-quality products;

d/ To enhance the association and coordination among concerned branches and domains, tapping to the utmost various branches’ capabilities to support the research into, designing and manufacture of, equipment systems for the power industry.

4. Planning for development in the period up to 2015

a/ Product development planning

- Static electric machines

+ To focus on and prioritize the development of the production of dry transformers of medium voltage and transmission transformers of 110 kV and 220 kV; to encourage investment in the production of industrial rectifiers;

+ In the immediate future, to make in-depth investment in and scale up the production capacity of existing establishments so as to raise capacity of manufacturing transformers of up to 250 MVA and 220kV;

+ To study and receive the transferred technologies for the production of dry transformers in service of the plan to lay underground power grids in urban centers;

+ To complete the construction of high-voltage experiment centers in two key transformer-manufacturing regions being Hanoi and Ho Chi Minh City before 2010;

+ To formulate and apply sets of universal Vietnam standards on transformers, which will be used as grounds for the assessment and mutual recognition between testing and experimenting units nationwide;

+ To attract foreign investment in the manufacture of transmission transformers, special-purpose transformers and industrial rectifiers, to be supplied for the industrial equipment-manufacturing industries;

+ By 2015, to basically satisfy the domestic demands for distribution transformers of uniform national quality standards, trying to meet 50-60% of the demand for 110kV -220k V transformers; and the export value will approximate 30-35% of the industry’s production value.

- Rotary electric machines

+To attach importance to the development of the production of high-capacity motors, high-voltage motors for industrial processing equipment and hydroelectric generators of up to  50MW; to encourage investment in the production of generators consuming renewable energy (wind, solar, geo-thermal, biogas,...);

+ To invest in the expansion and modernization of existing electric motor-manufacturing lines;

+ To invest in technological chains of regional advanced level to produce high-capacity electric motors, special motors, such as magnetic-brake motors, high-efficiency anti-explosion motors;

+ To assemble generators with a higher and higher localization rate for civil and industrial use, hydroelectric generators, wind generators..., then proceed to master the technologies for designing and manufacturing hydroelectric generators of up to 50MW capacity in service of hydroelectric projects;

+ By 2015, to satisfy 55-65% of the domestic demands for motors and about 50% of the domestic demands for some types of generators of lkV-lOkW capacity; the export value will represent 30-40% of the industry’s production value.

- Electric instruments

+ To prioritize investment in the development of the production of electronic meters, to encourage investment in the production of high-voltage electric instruments, counting and metering systems, power-grid safety smart supervisors;

+ To invest in new electric meter-manufacturing factories and in the expansion of existing ones to raise their production capacity with a view to satisfying domestic demands and expanding export markets. To concentrate on production of electronic meters;

+ To invest in the construction of factories producing medium- and high-voltage electric instruments of international standards, bringing into full play domestic resources while making full use of foreign investment;

+ To efficiently tap the mode of commercial franchise, incrementally establishing Vietnamese brands in the production of electric boxes and panels as well as complete equipment sets for transformer stations for domestic and foreign markets;

+ By 2015, to satisfy 60-70% of the domestic demands for electric instruments, the export value will represent 19-20% of the industry’s production value.

- Electric wires and cables

+To prioritize investment in the development of the production of electric cables with waterproof, fire-resistant properties suitable to the tropical environment in service of underground running of urban power grids or high-rise projects; to encourage the production of civil-use high-quality electric wires and cables (environmentally friendly and lead-free), export electric wires and cables;

+ To expand and raise the capacity of existing production chains towards raising technological levels and product quality;

+ To fully operate existing medium- and high-voltage insulated cable-production lines in service of underground running of power supply systems in cities, provincial towns and industrial parks;

+ To invest in the large-scale production of common electric wires and cables for civil and industrial use in service of the machine-tool industry, power supply systems in factories, condominiums and cables for mining pits and seagoing vessels.

- Other electric equipment

+ To encourage the development of the production of transmission line components, especially components for high-voltage transmission lines of up to 220kV, for programs on development of national power grids; to encourage the localization of electric equipment for power plants and renewable energy-exploiting systems;

+ To invest in the expansion and raising of the capacity and product quality of transmission line component-manufacturing establishments. To make selective and economically efficient new investment in technologies to produce transmission line components as import substitutes;

+ To call for foreign investment in the production of before- and after-insulator components on transmission lines;

+ To invest in the expansion or construction of factories producing standard components for electric motors and generators to meet domestic consumption and export demands;

+To invest in factories producing components for the strongly developing shipbuilding industry;

+ To invest in the development, and participate in the production and supply of a number of equipment for thermoelectric and hydroelectric plants for the materialization of the national planning on electricity development in the 2006-2010 period, taking into account a vision towards 2025, which was approved by the Prime Minister in Decision No. 110/2007/QD-TTgof July 18, 2007;

+ To approach technologies to manufacture mechano-electric equipment for power plants of up to 500 MW with a view to satisfying the domestic demands and proceeding to export them;

+ To study and invest in the phased production of components, then complete sets of equipment for transformer stations, compensation stations, transmission line projects....

b/ Investment capital

+ The total investment capital for the development of the electric equipment-manufacturing industry is estimated at about VND 43 trillion in the 2006-2010 period and about VND 136 trillion in the 2011-2015 period.

+ The investment capital will come largely from domestic sources through combined mobilization from own capital, preferential loan capital (for products enjoying priority and development encouragement), commercial loan capital, enterprise bonds, construction work bonds in addition to foreign investment capital.

Major investment projects are listed in the enclosed Appendix.

5. The Planning’s implementation solutions

a/ Market solutions

- To apply non-tariff regulations at the highest level (in conformity with WTO commitments) with a view to restricting import, protecting electric equipment which can be produced at home and creating favorable conditions for small- and medium-sized enterprises to participate in the market;

- To intensify electric equipment investment and market development consultancy; to encourage the purchase of world-famous manufacturing technologies and trade marks.

b/ Investment solutions

- To step up the implementation of projects on the planned list, projects to produce materials of new energy, renewable energy in the spearhead industry;

- To intensify the promotion of, and call for investment in, key projects.

c/ Scientific-technological research, transfer and application solutions

- To build up a system of centers for inspecting electric equipment quality of national standards, proceeding to conformity with international standards;

- To formulate key scientific and technological programs for the development of production of electric equipment; to increase budget for scientific and technological research, provide and guarantee credits for the application of new technologies in the field of electric equipment;

- To encourage all economic sectors to participate in research and innovation and transfer of technical advance; to diversify forms of cooperation and association in conducting research into electric equipment sciences and technologies; to bring into the fullest play the National Fund for Scientific and Technological Development to support scientific and technological activities in the electric equipment-manufacturing industry;

- To make a list of spare parts and components which cannot be produced at home yet or immediate investment in the production thereof is inefficient, to be proposed for import tax exemption or reduction;

- To establish and regularly update the database of the electric equipment-manufacturing industry and its support industries.

d/ Human resource solutions

- To renew the program on training of personnel for the electric equipment industry, diversifying forms of training and linking training to production reality; to attach importance to the recruitment and sending of science workers and managers for training in developed countries, supporting the training of entrepreneurs;

- To formulate satisfactory preferential treatment mechanisms so as to attract high-quality personnel; to promulgate a legal framework for use as a basis for the recruitment and exchange of human resources among enterprises.

e/ Support solutions

- To periodically review, update and adjust the Planning on development of the electric equipment-manufacturing industry in line with the socio-economic development situation in Vietnam and the world;

- To consolidate the organization and modes of operation of professional associations and form product group-based sub-associations.

Article 2. Organization of implementation

1. The Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with concerned ministries, branches and provincial-level People’s Committees in, directing, inspecting and proposing mechanisms and policies on development of the electric equipment-manufacturing industry in accordance with the approved Planning.

2. The Ministries of Planning and Investment; Finance; Science and Technology; Natural Resources and Environment; and Defense shall, according to their respective functions, coordinate with the Ministry of Industry and Trade in detailing mechanisms and policies on development of the electric equipment-manufacturing industry stated in this Decision for implementation of the Planning.

3. Provincial-level People’s Committees shall, based on the approved Planning, create favorable conditions so that the development projects and programs of the electric equipment-manufacturing industry are implemented in synchronism and uniformity with local socio-economic development master plans.

40. Concerned professional associations shall coordinate with relevant ministries and branches in dissimilating the Planning in forms of propagating, popularizing and guiding it to electric equipment enterprises nationwide so that the latter work out orientations and plans for production and business development in accordance with the Planning.

Article 3. This Decision takes effect 15 days after its publication in “CONG BAO.”

Article 4. Ministries, ministerial-level agencies, government-attached agencies, provincial-level People’s Committees and concerned agencies shall implement this Decision.

APPENDIX

LIST OF MAJOR INVESTMENT PROJECTS OF THE ELECTRIC EQUIPMENT-MANUFACTURING INDUSTRY IN THE UP-TO-2015 PERIOD
(To the Ministry of Industry and Trade’s Decision No. 48/2008/QD-BCT of December 19, 2008)