Mr. Tran Ba Duong, Chairman of THACO Board of Directors, proposed solutions and recommendations that clearly demonstrate the role, vivid reality and aspirations of a large enterprise.
At the recent Conference of the Government Standing Committee working with enterprises on solutions to contribute to the country's socio-economic development, Mr. Tran Ba Duong, Chairman of the Board of Directors of Truong Hai Group (THACO), proposed solutions and recommendations that clearly demonstrate the role as well as the vivid reality and aspirations of a large, multi-industry enterprise that THACO is investing in, including automobiles, mechanical engineering - supporting industry, logistics, investment - construction, trade - services and agriculture.
Mr. Tran Ba Duong, Chairman of Thaco Group, spoke at the conference – Photo: VGP/Nhat Bac
“Green industry” in the automotive industry
In the automobile sector, there are currently many changes in technology, especially cars using new energy towards green and clean, in accordance with COP 26 that Vietnam has signed with the international community.
THACO is implementing an automobile manufacturing center for international car manufacturers in Vietnam and selling to regions, especially ASEAN, to benefit from FTAs. Due to changes in technology, we are currently only focusing on manufacturing supporting industries to reduce car costs, including body frames, interiors and exteriors, especially electronic devices and digital platforms for intelligence and safety.
Mr. Tran Ba Duong informed that we see that after 2022, the market capacity will reach 500,000 vehicles, but by 2023, the market will decrease to 300,000 vehicles and this year the market may be the same as last year. Especially cars priced under 700 million VND have the majority of sales. Thus, if calculated in terms of market value, it has decreased by 50%. Faced with such a decrease, the strategic investment plan for supporting industries and new energy will encounter certain difficulties.
In 2024, THACO is investing in 7 factories and next year will add 3 more factories, increasing the localization rate for passenger cars to 45% with all components and spare parts that Vietnam has advantages in and will not change much when changing technology.
In the automotive sector, THACO sees the trend of green cars as inevitable. However, if we switch to purely electric cars, we need a roadmap and time to invest in infrastructure, safety and convenience in use.
Currently, almost all car manufacturers cooperating with THACO are developing electric vehicles, but sales in Vietnam are still very limited, mainly on a pilot basis to minimize risks for consumers.
The largest automotive industry center in ASEAN.
One of the types of vehicles that are currently being encouraged to do is hybrid vehicles and hybrid vehicles with additional batteries. Currently, pure electric vehicles running on batteries with hybrids with additional batteries can run from 80-150km without fuel, or with greatly reduced fuel consumption. Along with the Euro 5 emission standards, in the near future we should pay attention to the target of carbon reduction.
Therefore, Mr. Tran Ba Duong made strategic recommendations on the automobile industry. He said that from 2014 to now, including 2018 when Vietnam joined ASEAN with a zero tax rate and many signed FTAs, it is time for us to reconsider automobile emissions.
Regarding green energy changes, according to him, the strategic project for the development of the automobile sector to 2030 and 2050 aims to produce gearbox engines but has not closely followed the changes in green energy. Therefore, he hopes to have seminars, both domestically and internationally, to clearly see the changes and trends of the market, to see the proportion of vehicles from low-fuel consumption gasoline vehicles to hybrid vehicles, hybrid vehicles with batteries, battery vehicles with small engines for charging and pure electric vehicles.
This is done step by step to be appropriate and avoid the risk of changing too quickly, not keeping up with the market situation as well as the electrical and safety infrastructure.
Investment in supporting industry
In the field of supporting industry, investing in supporting industry requires output and technology. Currently, supporting industry appears in many industries. THACO was fortunate to start early in mechanics. Therefore, in 2024, THACO exported nearly 140 million USD, through selling to FDI enterprises and FDI exporting enterprises, bringing in an additional 20 million USD.
THACO Chairman said that the recent period has been very difficult in terms of trade defense, meaning that we will have to strictly control the content, especially raw materials and auxiliary components from China. Next year, THACO plans to double the output of supporting industries.
Semi-trailers are manufactured on advanced technological lines.
THACO is also continuing to develop a supporting industrial mechanical manufacturing industrial park in the South, because currently FDI countries are assembling and shipping here, in which we can also produce from 35 to 40% of the details, components and spare parts for their use.
In 2024, THACO sold auto parts to domestic automakers such as Hyundai, Ford, Toyota, Isuzu, bringing in revenue of 13 million USD, expected to increase revenue in the following year.
Regarding recommendations for the supporting industry sector, Mr. Duong said that we currently do not have a clear strategy. We talk a lot about semiconductors and new technologies, but to participate in the global value chain takes time.
Meanwhile, the mechanical field is now deeply embedded in life, into simple labor, even without much education, this reality is pervasive and enters 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 exports” – THACO chairman said.
Developing circular agriculture
In the agricultural sector, THACO pursues a large-scale agricultural production strategy, integrating circularity on an organic basis. THACO has acquired 84,000 hectares from the Group from HAGL, with many interspersed lands.
The governments of Vietnam, Cambodia and Laos also supported us to carry out new projects and THACO has purchased about 6,000 hectares more. We have invested 31,000 billion VND in Cambodia, 19,000 billion VND in Laos, and 18,000 billion VND in domestic provinces.
THACO AGRI's cow farm in Ia Puch Complex.
Domestic investment is modest due to lengthy planning and procedures. In Laos and Cambodia, we have implemented pilot models to control.
This year, THACO's agricultural export revenue reached about 53 million USD and domestic revenue was 1,600 billion VND. Next year, it is expected to reach 300 million USD in exports, and about 2,500 billion VND from domestic revenue. By 2027, after completing the investment, THACO aims to reach 1 billion USD in agricultural exports.
Regarding proposals for the agricultural sector, currently in the Central Highlands we preserve too much forest. Previously, we converted forests to rubber production but it was not effective. With the current rubber price, if the land is not good, it does not reach 2.3 tons/ha, then we will lose money.
Therefore, if we convert both forestry and agriculture, with crop and livestock complexes following a circular model, it will be a new development direction for Vietnamese agriculture. Currently, people only grow durian, and last year, although they did it individually, they were able to export it.
Expanding transport and commercial infrastructure
In terms of logistics, THACO is currently developing in Chu Lai. Fortunately, THACO has a foothold, having formed 5 million tons through Chu Lai port, mainly containers. However, the current route only serves 30% to the outside, 70% is for the company, because the route only reaches 20,000-ton ships.
Chu Lai Port promotes direct shipping route to India.
THACO Chairman said that previously, the Prime Minister had directed and we were ready to invest nearly 4,000 billion VND for the new waterway. However, we are currently waiting for the Government to approve the planning and this planning is needed for this project to be implemented.
The volume of goods from Southern Laos to Vietnam is currently very large. This year, minerals alone account for 1 million tons, other goods account for more than 1 million tons. However, Road 14D is almost completely damaged, and Road 14E is under construction very slowly. Recently, THACO has implemented 2 BOT projects and will try to implement these projects.
To do this, the chairman said he would connect three regions: Northern Cambodia, the Central Highlands to the Central region, including Chu Lai, Quy Nhon; Southern Laos, Kon Tum to Chu Lai and neighboring provinces from Quang Ngai, Quang Nam.
Currently, Quang Ngai has a company that makes furniture, exporting 140 containers/day, but has to transport them to Da Nang, costing an additional 4.5 million VND/container. Therefore, the planning of seaports in the Central region should not be concentrated in one place, but should be directed to the West, through Laos and Cambodia, so that the entire Central region, all seaports can still operate well.
“I hope the Ministry of Transport and the Government will reconsider these major changes so that we can adjust and upgrade the port. As a private port, we would not be foolish enough to invest heavily if it is not effective,” he said.
Regarding trade and services, during the Covid-19 pandemic, THACO acquired the Emart supermarket system. Currently, THACO has formed 3 large centers of hypermarkets and new-generation shopping centers in Vietnam.
By the end of this year and into 2025, we will invest in 3 more centers, and by 2027, we will have 16 systems, hoping to become, together with Aeon, the leading system of shopping centers and supermarkets in the domestic market.
In addition, by 2025, when THACO basically completes agriculture and has certain revenue, we are researching and accepting bids to invest in a number of infrastructure projects in the coming years.
| Regarding social responsibility activities, THACO has an annual implementation plan. Recently, during the Covid-19 pandemic, THACO has produced many ambulances. In the recent natural disasters in the mountainous areas, as the Prime Minister shared, "we must know how to live with natural disasters in the new generation". We have experience in afforestation and planning. Two or three years ago in Quang Nam province, a flash flood wiped out a village, we 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. On the farm, we have 60,000 workers, 1 house has only 6 people, we are building 1,000 houses and building very fast. We will present this house model and select to carry out a few practical and sustainable projects. Chairman of THACO Board of Directors Tran Ba Duong |
Source: https://diendandoanhnghiep.vn/khat-vong-phat-trien-va-nhung-ke-hoach-dau-tu-lon-cua-chu-cich-thaco-10142566.html
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