Decision No. 48/2008/QD-BCT Approving the Plan for the Development of the Electrical Equipment Manufacturing Industry for the Period 2006-2015 with Vision to 2025

Pursuant to …;

Approving the Master Plan for the Development of the Electrical Equipment Manufacturing Industry

for the period 2006-2015 with a vision to 2025

________________ 

THE MINISTER OF INDUSTRY AND TRADE

Pursuant to Decree No. 189/2007/ND-CP dated December 27, 2007 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

Pursuant to Decree No. 92/2006/ND-CP dated September 7, 2006 of the Government on the preparation, approval, and management of overall socio-economic development master plans and Decree No. 04/2008/ND-CP dated January 11, 2008 of the Government amending and supplementing certain articles of Decree No. 92/2006/ND-CP dated September 7, 2006;

Pursuant to Decision No. 186/2002/QD-TTg dated December 26, 2002 of the Prime Minister approving the Strategy for the Development of the Mechanical Industry of Vietnam until 2010 with a vision to 2020;

Implementing Circular No. 3174/VPCP-CN dated June 11, 2007 of the Government Office regarding the Prime Minister's assignment to the Ministry of Industry (now the Ministry of Industry and Trade) to approve the Master Plan for the Development of the Electrical Equipment Manufacturing Industry for the period 2006-2015 with a vision to 2025;

At the proposal of the Director of the Heavy Industry Department,

DECISION:

Article 1. Approving the Master Plan for the Development of the Electrical Equipment Manufacturing Industry for the period 2006-2015 with a vision to 2025, including the following main contents:

1. Development Orientation

a) Developing the electrical equipment manufacturing industry in accordance with the Strategy for the Development of the Mechanical Industry of Vietnam until 2010 with a vision to 2020 and the National Power Development Master Plan for the period 2006-2015, taking into account the year 2025;

b) Developing the electrical equipment manufacturing industry steadily and sustainably, investing in modern technologies and equipment, reducing raw material, fuel, and energy consumption to produce products with high energy efficiency and environmental friendliness;

c) Closely linking the electrical equipment manufacturing industry serving economic and social development with national defense needs.

2. Development Goals

a) The average growth rate of the value added of the industry during the period up to 2010 will reach about 19-20% per year, and during the period from 2011 to 2015, it will reach about 17-18% per year;

b) By 2010, meet 60% of domestic demand for various types of power transmission equipment and substations, gradually increasing this ratio to over 70% by 2015. By 2015, meet 55% of domestic demand for various types of electric motors and some common types of generators;

c) By 2015, the Vietnamese electrical equipment manufacturing industry will achieve advanced levels in the region in terms of production technology for transformers, electric motors, generators, medium and high voltage electrical equipment, and wires and cables for domestic use and export;

d) The expected growth rate of export turnover of the industry will reach 18% per year during the period from 2011 to 2015, and 15% per year during the period from 2016 to 2025;

đ) By 2025, Vietnam will be able to produce and supply complete sets of electrical equipment for power transmission lines and substations.

3. Development Orientation

a) Investing new and deepening investments with advanced technology to develop the production of existing strong products, enhancing manufacturing capacity, and improving product competitiveness of enterprises; Encouraging investment in producing substitute products that are economically viable and promoting exports to the region and the world;

b) Encouraging all forms of economic sectors to participate in developing the industry. Diversifying investment methods in research and development cooperation, technology transfer; Joint ventures, production linkages, promotion, and sales of products;

c) Paying attention to research, design, and manufacture of new and high-quality products;

d) Strengthening collaboration and coordination between industries and related fields, fully utilizing the capabilities of supporting industries in research, design, and production of systems serving the electrical industry.

4. Development Planning for the Period Up to 2015

a) Product Development Planning

- Static electrical machines group

+ Prioritize the development of production of dry-type medium voltage transformers and 110kV, 220kV transmission transformers; encourage investment in the production of industrial rectifiers;

+ Initially deepen and expand the production capacity of existing facilities to increase the production capacity of various types of transformers up to 250MVA, 220kV voltage;

+ Study, absorb, and receive technology transfer to produce dry-type transformers for underground grid projects in urban areas;

+ Complete the construction of High Voltage Testing Centers in two key transformer production regions, Hanoi and Ho Chi Minh City, before 2010;

+ Develop and apply a unified set of standards for various types of transformers in Vietnam, serving as a basis for mutual recognition among testing and experimental units nationwide;

+ Attract foreign direct investment in the production of transmission transformers, specialized transformers, industrial rectifiers, supplying the electrical equipment manufacturing industry;

+ By 2015, basically meet domestic demand for distribution transformers with unified quality standards across the country, striving to meet 50-60% of domestic demand for 110kV-220kV transformers; export value reaching approximately 30-35% of the production value of the sector.

- Rotating electrical machines group

+ Focus on developing the production of large-capacity motors, high-voltage motors for industrial processing equipment, and hydroelectric generators up to 50MW; encourage investment in the production of generators using renewable energy sources (wind, solar, geothermal, biogas...);

+ Expand and modernize existing motor production lines;

+ Invest in advanced technology lines to produce large-capacity motors, special motors such as dynamic brakes, explosion-proof motors, and high-efficiency motors;

+ Assemble and gradually increase the localization rate of household and industrial generators, hydroelectric generators, wind generators, aiming to master the design and manufacturing technology of hydroelectric generators up to 50MW for hydropower projects.

By 2015, ensure that 55-65% of domestic demand for various types of engines and approximately 50% of domestic demand for certain types of generators with power ranging from 1 kW to 10 kW are met; export value reaches 35-40% of the production value of the industry group.

- Electrical equipment group

+ Prioritize investment and development of production of various types of electronic meters, encourage investment in production of high-voltage electrical equipment, intelligent and safe measurement and monitoring systems;

+ Invest in new projects, expand existing enterprises' capacity to produce electronic meters to meet domestic demand and expand the export market. Focus on producing electronic meters;

+ Invest in building factories to produce medium and high-voltage electrical equipment according to international standards based on leveraging domestic capabilities and utilizing foreign investments;

+ Effectively utilize franchising methods to gradually establish a Vietnamese brand in the production of switchgear, panels, and complete substation equipment for both domestic and export markets.

+ By 2015, meet 60-70% of domestic demand for various types of electrical equipment, with export value reaching 19-20% of the production value of the industry group.

- Electrical cable group

+ Prioritize the development of production of water-resistant, moisture-proof, fire-retardant cables suitable for tropical environments to serve underground urban power networks or high-rise building projects; encourage the production of high-quality household wires and cables (environmentally friendly, lead-free), and power cables with potential for export;

+ Expand and increase the capacity of existing production lines towards improving technological level and product quality;

+ Fully exploit the production capacity of medium and high-voltage cable lines to meet the needs of undergrounding power systems in cities, towns, and industrial zones;

+ Invest in large-scale production of general-purpose wires and cables for household use, manufacturing machinery and equipment systems, factory power systems, residential buildings, mine cables, ship cables.

- Other electrical equipment group

+ Focus on encouraging the development of production of overhead line accessories, particularly those for high-voltage transmission lines up to 220kV, serving the national power grid expansion program; encourage research to localize some components of electrical equipment for power plants and renewable energy systems;

+ Expand and increase the capacity and product quality of accessory production facilities. Selectively invest in new facilities to ensure economic viability of production technologies that replace imports;

+ Attract foreign investment in the production of accessories before and after porcelain insulators on transmission lines;

+ Invest in expanding and establishing new factories specializing in producing standard accessories for electric motors and generators to meet domestic demand and exports;

+ Invest in factories producing electrical accessories for the rapidly developing shipbuilding industry;

+ Invest in developing and participating in the production and supply of some equipment for thermal and hydroelectric power plants to implement the National Power Development Plan for the period 2006-2015, considering the approval by the Prime Minister at Decision No. 110/2007/QĐ-TTg dated July 18, 2007;

+ Access advanced technology for the manufacture of electromechanical equipment for power plants with capacities up to 500 MW to meet domestic demand and eventually for export;

+ Research and invest in the production of segmented components, progressing towards full production of substations, compensation stations, and transmission line structures;

b) Investment capital

+ Total investment capital for the development of the electrical equipment manufacturing industry during the 2006-2010 period is estimated at approximately 43 trillion VND, and during the 2011-2015 period, approximately 136 trillion VND;

+ The main source of investment capital is domestic, combined with mobilizing self-owned funds, preferential loans (for prioritized and encouraged products), commercial loans, corporate bonds, and project bonds, in addition to attracting foreign investment.

See the attached Appendix for a list of major investment projects.

5. Implementation solutions

a) Market solutions

- Apply non-tariff regulations at the highest level (consistent with WTO commitments) to limit imports, protect domestically produced electrical equipment products, and create favorable conditions for small and medium-sized enterprises to participate in the market;

- Strengthen investment advisory services and market development consulting for electrical equipment; Encourage the purchase of production technology and well-known global trademarks.

b) Investment solutions

- Accelerate the implementation of projects in the planning list, including production of new energy materials and renewable energy equipment in key industries;

- Enhance promotion and solicitation of investment in key projects.

c) Solutions for research, technology transfer, and adoption

- Establish a system of national standard quality testing centers for electrical equipment products, moving towards international standards;

- Develop key science and technology programs to support the production of electrical equipment; Increase the budget for scientific research and provide credit guarantees for the application of new technologies in the electrical equipment sector;

- Encourage all sectors to participate in research, innovation, and technology transfer activities; diversify cooperation and collaboration models in scientific and technological research in the electrical equipment industry; maximize the effectiveness of the National Science and Technology Development Fund in supporting scientific and technological activities in the electrical equipment manufacturing industry.

- Study to establish a list of domestic component and accessory clusters that have not been produced or would not be cost-effective for immediate investment production to propose tax exemption or reduction on imports;

- Build and regularly update the industry database for electrical equipment manufacturing and supporting industries for electrical equipment;

d) Human resource solutions

- Reform training programs for the electrical equipment industry, diversify training formats, and link training with practical production; Focus on recruitment and sending scientific and management staff for training in developed countries, support the training of business managers;

- Establish an appropriate incentive mechanism to attract high-quality human resources. Issue a legal framework as the basis for recruitment and exchange of personnel among enterprises;

đ) Support measures

- Regularly review, update, and adjust the Development Plan for the Electrical Equipment Manufacturing Industry to align with Vietnam's and international economic and social development situations;

- Improve the organizational structure and operational methods of industry associations, form sub-associations based on product groups;

Article 2. Implementation

1. The Ministry of Industry and Trade shall take the lead, coordinate with relevant ministries, sectors, and provincial/municipal people's committees to direct, inspect, and propose mechanisms and policies for developing the electrical equipment manufacturing industry according to the approved plan;

2. The Ministries of Planning and Investment; Finance; Science and Technology; Natural Resources and Environment; and the Ministry of National Defense, within their respective functions, shall cooperate with the Ministry of Industry and Trade to concretize the mechanisms and policies for developing the electrical equipment manufacturing industry as stipulated in this Decision to implement the plan;

3. Provincial/Municipal People's Committees shall, based on the approved plan, create favorable conditions for projects and programs to develop the electrical equipment manufacturing industry to be implemented consistently and uniformly with the overall socio-economic development plan of the locality;

4. Relevant industry associations shall cooperate with related ministries and sectors to disseminate the plan through various forms of publicity, dissemination, and guidance to the nationwide community of electrical equipment manufacturing businesses to have appropriate development plans and business strategies aligned with the plan;

Article 3. The Standard Measurement Quality Control Department shall be responsible for organizing and guiding the implementation of the Regulations adopted herein.

Article 4. Ministries, agencies at the level of ministries, government agencies, provincial/municipal people's committees, and related agencies are responsible for implementing this Decision./.