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Is Vietnam heading towards greater automation?

by Apparel Resources

05-March-2017  |  10 mins read

Cason KS Yu, Director and General Manager, Ngai Shing Development Ltd. (extreme right) with his Vietnam Team
Cason KS Yu, Director and General Manager, Ngai Shing Development Ltd. (extreme right) with his Vietnam Team

The Vietnam industry is moving to imbibe greater automation, compelling machine manufacturers to beeline for the country hoping to get a bigger share of the growing business. Among the growing number of such machine providers are many Chinese companies like Euromac, MAQI, Ngai Shing and Hikari. According to a recent report by the International Labour Organisation (ILO), as many as 86 per cent of workers in the garment-textiles and leather-footwear industries worldwide may face unemployment due to automation, which accentuates the growing focus on automation over the last few years.

The growing trend has been brought on by many factors of which one is low productivity due to low worker efficiency which is at least 7 per cent less than the efficiency level of China. Even though the efficiency is low, so is the wages which makes Vietnam cheaper, but not for long. According to the Ministry of Labour, Invalids and Social Affairs, in the 2017-2025 period, Vietnam’s workforce will rise 1.28 per cent or 7,23,000 people per year, to reach 62 million in the year 2025; out of such large workforce (by the end of 2016), only 20.6 per cent have been trained, highlighting the requirement of more training institutes and also at the same time use of automation to offset for the low productivity.

Peter Ye, Director, Global Marketing, Zhejiang Maqi Sewing Machine Co. Ltd.
Peter Ye, Director, Global Marketing, Zhejiang Maqi Sewing Machine Co. Ltd.

Interestingly, seizing the opportunity many new entrants, mostly from China, are launching machines and work aids to support the demand for productivity. One of them, MAQI, has a vision to focus on customer value, excellent quality and innovation in development to make industrial sewing machines that are more advanced and convenient. The brand is already a well-known name in markets like India for its computerized sewing machines including, lockstitch, overlock, interlock, chainstitch, bar-tacking, button-attaching, button-holing, pattern sewing, heavy-material zigzag sewing machines and servo control system. “Vietnam is a very small market for direct-drive machines, as our target factories in this segment are small- to medium-level exporters.

But we are more positive about automated machines, as Vietnamese companies are now looking for such solutions. So we have appointed a distributor, supported by a local service team, to promote our machines, and we are very hopeful of increased business,” says Peter Ye, Director, Global Marketing, Zhejiang Maqi Sewing Machine Co. Ltd., which has an R&D centre in Shanghai.

Henry Jiang, Sales Director
Henry Jiang, Sales Director and Member of the
Board of Euromac, China

Another Chinese high-end automated solution provider Euromac is also very positive of growth potential in the Vietnamese market with shifting preferences in technology. “Now Vietnam has become an important market for us, so we have introduced our range of machines that are for special lines like jeans, jackets and shirts,” shares Henry Jiang, Sales Director and Member of the Board of Euromac, China. As of now the service team is stationed in China. “Since our machines are very high-end it needs expert hands for after-sales services; so till we have put in place a well-trained team, we prefer to service customers directly from China,” adds Henry. The company has 30 different machines for production of jeans and though denim is yet not a big category for Vietnam, many new players are investing in such lines, informs the company. Currently, Bangladesh is the biggest market for Euromac.

Liangjie Wu, Chairman, Hikari
Liangjie Wu, Chairman, Hikari

Riding high on the global success of its lockstitch machine, Hikari has set new standards of quality in sewing technology from China, and now considered as a worthy competitor to European units. Hikari has registered 60 per cent increase in sales since last year on its high-end computerized overlock machine and is also upbeat of its other automatic machines that are fast gaining recognition in the Vietnam market. Liangjie Wu, Chairman, Hikari shares the factors that make the company a leading automation provider in sewing machines.

The confidence that Hikari has in its products has over the past year been reinforced with many leading companies in Vietnam endorsing the same. Vietnam Ho Chi Minh, a large private garment group company, and one of Vietnam’s largest clothing groups, has recently replaced its Japanese brand of machines with Hikari products. “When making the decision, the company took into consideration factors like machine stability, quality, service, function and price,” shares Liangjie Wu. The company invested in model numbers HT9220TA-7P, HMS2210 with reversal presser foot pattern machine, HH380A and other varieties. Another big company, Vietnam Dintsun Enterprise Co. Ltd., the Vietnamese arm of Taiwan-based Bao Chen Group and among the world’s 10 largest manufacturing partners of Adidas with more than 1,00,000 workers, has entered into a strategic cooperation with Hikari for supply of machines to both the shoe and garment manufacturing sections.

What really sets Hikari apart from other Chinese counterparts is its R&D. The Chairman is proud of the achievement and minces no words when describing the efforts in R&D. “We first established Hikari – HIT Mechanical and Electrical Engineering Joint R&D base, and in September 2013 we set up a “new generation of computerized sewing machine Academy” which will continue to focus on R&D for leading-edge products,” avers Liangjie Wu.

Another area that Hikari scores over other competitors is in the speed of sewing, which is set as high as 8000 RMP. “Our machines are superfast and guarantee quality stitching even at such high speeds, which is a challenge even to the best of machine manufacturers,” says Liangjie Wu. He also adds that the company customizes machines specific to the manufacturing unit’s need, which adds to the value proposition of Hikari machines.

“We are also focused on sustainability in the product with provision for servo motors, sensor movement of needles as against traditional peddles and LED lights for sewing clarity,” concludes Liangjie Wu.

On similar lines, Ngai Shing also admits that Vietnam is a relatively new market for the brand, though they do have a presence in Hanoi and have recently made effort to enter the HCM City hub. “With industry giants like Luen Thai garment company setting up units in Vietnam, we cannot afford to ignore the potential of the Vietnamese industry,” says Cason KS Yu, Director and General Manager, Ngai Shing Development Ltd.

The automatic sewing equipment from the company which is receiving good response in Vietnam include automatic tripe-tape attaching machine with cutter and stacker, suitable for coats and trousers. Other solutions that are in demand include automatic pattern sewer, automatic buttonhole machine with stacker, automatic button feeder and automatic cuff hemming with stacker to name a few. “Increasing productivity is a major concern area for the industry today, and we have solutions that not only increase production, but also cut down on number of workers required,” adds Cason KS Yu. The company is also providing many work aids and spare parts, which is another strong business growth area.

Indeed, with huge investments by big global manufacturing companies happening as an important strategic step to strengthen their position in Vietnam as the infrastructure, the rapid development of the textile/garment industry, coupled with trade preferences, should make Vietnam a country of choice, the spotlight has also shifted on the efficiency of workers and global competitiveness.