Vietnam’s THACO chairman hopes to emulate Foxconn’s success
Thursday, December 22, 2022, 11:05 GMT+7
Chairman of Truong Hai Group Corporation (THACO) Tran Ba Duong discussed his desire to learn from Taiwan-based Foxconn, one of Apple’s key suppliers, at a seminar held on December 17 to promote industrial linkage development in Vietnam’s central region.
Speaking to more than 150 delegates from ministries, localities, and businesses, Tran Ba Duong shared THACO has spent years attempting to transform its automobile business into an autonomous industry.
In order to meet this goal, THACO has been seeking out foreign partners in order to invest in its automobile and mechanical engineering operations.
Currently, THACO’s automobile business is positioned to become a ‘kingpin’ paving the way for the development of the industry within Vietnam.
“My view is that the autonomy of an industry comes from its supporting industries,” said Duong.
“An industry is like a tree. If you want it to be tall, you must ensure strong roots. [These roots] are equivalent to surrounding support industries.
“A tall tree needs big roots which help the tree weather wind and storms, as well as bring nutrients to it.
“Without supporting industries there can be no primary industries.”
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| A THACO factory. Photo: Tan Luc / Tuoi Tre |
Mentioning Taiwan’s Foxconn, which began as a contract manufacturer, Duong noted that contract manufacturing is an important step in 'climbing the ladder' to industry leadership.
“Foxconn started by assembling mobile phones and electronic components. Now, it is the world’s largest chip producer,” he said.
“Take a look [at current industry leaders] and you will see that they all started as contract manufacturers.
“Once we reach a certain stage, we can level up, step by step, following Foxconn’s model.”
Regarding THACO's investment of more than US$100 million in a mechanical center in Quang Nam Province, central Vietnam, Duong spoke confidently of the huge potential for the company to do businesses in the field of mechanical engineering, which he considers to be the foundation of all industries.
According to Duong, the newly-invested center will allow THACO to provide its partners with a massive range of mechanical components.
“What equipment businesses need, we are committed to contractually manufacturing while ensuring their intellectual property,” Duong affirmed.
At the seminar, Duong expressed his hope that Vietnam, and the country’s central region in particular with its advantageous geographical proximity to raw materials, will become an ecosystem for mechanical engineering startups.
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| Delegates attend a seminar organized by Tuoi Tre (Youth) newspaper in Quang Nam Province to promote industrial linkage development in Vietnam’s central region, December 17, 2022. Photo: Huu Hanh / Tuoi Tre |
Inaugurating a mechanical center and the groundbreaking of an R&D facility
Prior to seminar, THACO inaugurated a 20-hectare $100 million mechanical center and broke ground on a brand-new R&D facility.
The mechanical center includes a material supply and mechanical processing factory, an SMRM and heavy component factory, a specialized equipment factory, and a mold factory.
In addition to providing products and services for THACO, the Mechanical Center offers industrial solutions in a value chain, from product research & development to processing & manufacturing, installation, transportation, operation & maintenance, and mechanical processing as per customer requirements, in the forms of independent production and cooperation/joint ventures with domestic and foreign partners.
The R&D Center covers 20,000 square meters and boasts a total investment of more than $20 million. It is expected to employ over 1,000 experts and engineers when it is put into operation in August 2023.
The project includes a design and innovation center, a testing center, a sample factory, and a product testing center which will enable THACO to develop new products as per the requirements of customers, as well as providing design services, industrial solutions, and product testing services.
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