At the Prime Minister's Conference meeting with large private enterprises on September 21, Mr. Tran Ba Duong, Chairman of the Board of Directors of THACO Group, shared many investment plans to achieve new achievements.
New strategy of The auto industry must be greener.
Sharing at the Conference, Mr. Tran Ba Duong said that the automobile industry is currently in a period of many technological changes, especially the interest in new energy cars towards green and clean, in order to meet the emission reduction target that Vietnam committed to at COP26.
Therefore, it is necessary to update the Automotive Industry Development Strategy issued since 2014.
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| Mr. Tran Ba Duong, Chairman of THACO Group |
“In 2018, Vietnam fully integrated with ASEAN and applied a 0% import tax on cars that met ASEAN origin standards. After that, we had many new generation FTAs, so the situation has also changed a lot and needs to be updated,” Mr. Duong commented.
In addition, the Project on the Development Strategy of the Automobile Industry to 2030, with a vision to 2050, still focuses on the production of gearbox engines. This shows that the policy has not kept up with changes in new, green, and clean energy vehicles.
With the fact that the trend of green cars is inevitable, Mr. Tran Ba Duong also commented that the transition to pure electric vehicles requires a roadmap and time to invest in infrastructure, to ensure safety and convenience for consumers during use as well as develop energy sources to meet this need.
Currently, almost all the car manufacturers that THACO cooperates with have developed electric car lines, but they sell them in Vietnam in very small, limited, and pilot quantities to minimize risks for consumers.
While pure electric vehicles have not yet been widely available and the infrastructure for electric vehicles is just beginning to develop, other solutions are also encouraged by the international automobile industry, such as hybrid vehicles, externally charged hybrid vehicles, etc. These types of vehicles also help to immediately reduce fuel consumption compared to internal combustion engine vehicles without having to change much of the existing production.
Besides, raising emission standards to Euro5 will contribute to managing automobile emissions.
“We hope to have seminars, both domestically and internationally, to clearly see the changes and trends of the market, to see the proportion of vehicles from fuel-efficient gasoline vehicles to hybrid vehicles, hybrid vehicles with batteries, battery vehicles with additional small engines for charging, and pure electric vehicles. This will be done step by step and avoid risks to the economy. If we go too fast, we will not be able to keep up with the market situation, as well as the electrical and safety infrastructure,” the captain of THACO shared.
Accelerating investment in supporting industries
Participating in the automobile industry, THACO aims to become an automobile manufacturing center for international car manufacturers in Vietnam, while exporting to regions, especially the ASEAN region, to take advantage of existing trade agreements.
In this direction, along with the change of technology, THACO is currently focusing on supporting industries to produce components such as chassis, interior and exterior, and electronic devices as well as applying digital platforms for intelligence and safety. All of these efforts are aimed at reducing costs and benefiting consumers.
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| THACO Industries' mechanical center and supporting industrial factories in Chu Lai |
However, the automobile market has faced many difficulties in recent years. In 2022, the sales of the Vietnamese automobile market reached about 500,000 vehicles, but in 2023 it was only more than 300,000 vehicles.
By 2024, the difficulties have not decreased and car sales may only be equivalent to 2023. Besides, there is also a change in consumer trends, people are focusing on cars priced under 700 million VND. Thus, if calculated in terms of market value, it will decrease by 50%.
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| High speed Fiber cutting machine, can process workpieces up to 25 mm thick |
When there is a decline in sales, investment plans for supporting industries as well as investment in new energy vehicles will face certain difficulties.
However, THACO is still determined to invest in its supporting industry. In 2024, THACO is investing in 7 more factories and in 2025 will invest in 3 more factories to produce all components and spare parts that Vietnam has advantages in as well as not having much change in technology. This also helps increase the localization rate of passenger cars to 45%.
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Currently, THACO has also sold spare parts to existing car manufacturers in Vietnam including Hyundai, Ford, Toyota, and Isuzu with a value of about 13 million USD.
According to Mr. Tran Ba Duong, to invest in supporting industry, it requires output and technology. Currently, supporting industry appears in many industries. THACO is lucky to have started early in mechanics.
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However, many major import markets of Vietnam such as the United States, Europe, etc. are closely monitoring trade fraud to avoid the situation where goods from some other countries avoid being subject to high taxes when exported directly, so they go around to other countries to enjoy lower taxes. Therefore, THACO has had to strictly control the origin of materials, equipment, and input materials when making export goods to avoid being subject to trade defense measures by exporting countries.
In 2024, THACO exported nearly 140 million USD, through sales to FDI enterprises, and these enterprises exported, bringing in another 20 million USD.
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Currently, THACO continues to invest in a separate industrial park for supporting industrial production in the South, to meet the increasing demand of many FDI enterprises shifting their production activities to Vietnam. With its foundation and in this direction, THACO can produce 35-40% of the details, components and spare parts for FDI enterprises.
"It is expected that next year, the contribution from supporting industry to THACO's overall operations will double compared to the present," said Mr. Duong, expressing his hope that the supporting industry will receive more attention from the Government because currently there is no industry development strategy accompanied by policy mechanisms.
“We talk a lot about semiconductors and new technologies, but it takes time to join the global value chain. Meanwhile, the mechanical engineering sector is now deeply embedded in life, even in simple labor, without even requiring much education. This reality is widespread and has entered industrial life in Vietnam. We hope the Government will consider this issue, this is also an opportunity to develop Vietnam's basic industry as well as export,” Mr. Duong shared.
Target of 1 billion USD in agricultural exports by 2027
Entering the agricultural industry with a “surprise” in 2018, THACO is currently pursuing a large-scale agricultural production strategy, integrating circularity on an organic platform on an area of about 84,000 hectares in Vietnam, Cambodia, and Laos through an M&A deal with Hoang Anh Gia Lai and 6,000 hectares of additional purchases later.
Mr. Tran Ba Duong said that THACO has invested 31,000 billion VND in Cambodia; 19,000 billion VND in Laos and 18,000 billion VND in domestic provinces.
The reason why domestic investment has not been as planned by THACO is because planning and administrative procedures are still taking a long time. In Laos and Cambodia, we have deployed pilot models and are submitting projects for approval by the governments of the neighboring countries.
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| One of THACO's cattle farms |
Because it had to rebuild from scratch instead of taking advantage of Hoang Anh Gia Lai's previous investments and solving the problem of land interspersed with people and then implementing a new model, THACO's agriculture has just begun to reap initial results.
This year, THACO only has export revenue of about 53 million USD and domestic sales of 1,600 billion VND, but by 2025, it will reach export revenue of 300 million USD and domestic sales of about 2,500 billion VND.
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| A banana farm of THACO |
After completing investments in 2026, THACO will strive to achieve export revenue of 1 billion USD in agricultural products in 2027.
After more than 5 years of working together and coming up with a unique model for large-scale agricultural development, integrating circulation on an organic basis, Mr. Duong also suggested that there should be changes in crops and livestock in the highlands.
“In the highlands, there was a time when forest land was converted to rubber production, but in reality it was ineffective. With the current rubber price, if the land is not good and does not yield 2.3 tons of latex per hectare, there will be losses. Recently, people only planted durian, and last year, although they did it individually, they exported 500 million USD. Therefore, if forests were converted to combine livestock and agriculture, to form a model of a circular crop and livestock complex, it would be a new development direction for Vietnamese agriculture,” Mr. Duong proposed to the Prime Minister.
Transport and commercial infrastructure: Bustling expansion
The large-scale agricultural development in Cambodia, Laos and some provinces in the Central Highlands has also given THACO more motivation to upgrade its logistics operations and realize new opportunities. Currently, THACO's cargo through Chu Lai port has reached 5 million tons, focusing on container cargo.
“Our route can only serve 30% of external goods, 70% of which are from the company, because the new route can only handle 20,000-ton ships. The Prime Minister has also directed the new route and THACO is ready to invest nearly 4,000 billion VND in it. However, the Vietnam Seaport Planning has not been approved yet, so construction has not been implemented yet,” said Mr. Duong.
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| Exporting THACO Trailers branded semi-trailers to the US market |
In addition, the development of seaports in the Central region was also suggested by the captain of THACO "to be more general, not simply focusing on a certain locality but needing to expand the vision to the West, through Laos, Cambodia to add more cargo through the port. We are a private port, so we would not be foolish to make a large investment if it is not effective".
According to Mr. Duong, the current export volume from Southern Laos through Vietnam is very large. This year, minerals alone are 1 million tons, and other goods are over 1 million tons more.
“We hope that during the approval process of the Vietnam Seaport Development Strategy, the Ministry of Transport and the Government will take into account these major changes to make adjustments, increase the capacity of the port or invest in faster connecting routes. Currently, National Highway 14D is almost completely damaged, and National Highway 14E is under construction very slowly.
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| Mr. Tran Ba Duong spoke about THACO's plans to achieve new results. |
THACO also has plans to do 2 road projects under the BOT form, so it has promised the Prime Minister that it will try to implement them to create 3 new connections. That is Northern Cambodia - Central Highlands - Central region, including Chu Lai port, Quy Nhon port. The second route is from Southern Laos - Kon Tum - Chu Lai port and the third route is from neighboring provinces such as Quang Ngai to Quang Nam.
The story of Quang Ngai having a company making furniture, exporting 140 containers/day, but having to transport to Da Nang, losing an additional 4.5 million VND/container" is a fact that Mr. Duong cited when asking the Government to speed up the approval of the Seaport Development Strategy so that businesses can continue to invest in expansion to serve customer needs.
Besides, THACO is also researching to conduct bidding for investment in some infrastructure projects in the coming years of the country when investment in agriculture is basically completed.
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In the commercial sector, after acquiring the Emart supermarket system (Korea), THACO has established 3 new-generation supermarkets and shopping malls that meet the needs of Vietnamese consumers. In late 2024 and 2025, THACO will invest in 3 more centers to have a system of 16 shopping malls by 2027, leading the domestic market with AEON.
In the recent natural disaster in the mountainous region, it was not simple, but as the Prime Minister said, we must know how to live with natural disasters in the new generation. THACO has experience in afforestation and planning. Two or three years ago in Quang Nam, a flood swept away an entire village, THACO redesigned lightweight houses and rebuilt the entire village.
In the coming time, my team and I will go to the North to review the soil layers, plant forest trees to preserve the soil layer, and build houses with a hard foundation, so that the house on top is light and good.
THACO's farm has more than 60,000 workers, we are building about 1,000 new houses, each house is for 6 people and can be built very quickly. So we will also select some projects to pilot.
Source: https://baodautu.vn/chu-tich-hdqt-thaco-he-lo-nhung-ke-hoach-dau-tu-lon-d225554.html
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