ABB upbeat about EU FTAs pushing new green project wave in Vietnam

15:15 | 02/07/2019
Vietnam and the European Union signed a free trade agreement, opening opportunities to boost trade between the euro bloc and one of Southeast Asia’s biggest manufacturing nations. As one of the earliest European investors in Vietnam, Brian Hull, country managing director of ABB in Vietnam, told VIR’s Phuong Thu about the high potential of the new wave of green projects contributing to Vietnam's sustainable development.
abb upbeat about eu ftas pushing new green project wave in vietnam
Brian Hull, country managing director of ABB in Vietnam

Making its presence felt right from the beginning of Vietnam’s economic renovation, how does ABB see the opportunities arising from the newly-signed EU-Vietnam Free Trade Agreement (EVFTA) and EU-Vietnam Investment Promotion Agreement (EVIPA)?

When the EVFTA comes into effect, it will open the doors for EU and Vietnam businesses to expand business co-operation and bring momentum for the business community in Europe to expand investment in Vietnam. It will certainly bring more jobs as well as create better growth and more opportunities for new investment.

For ABB, I think a key potential lies in opportunities to help new investors to develop their greenfield projects right at the beginning phase to meet time requirements, from the initial design/concept process to the provision of products and systems for renewable and efficient energy solutions, as well as advanced technologies for manufacturing such as robots, Manufacturing Execution System, and others.

We also see opportunities to bring digitalisation into the electrical and water infrastructure sector which will see hefty growth in demand. With ABB’s years of experience of working in Vietnam and global domain expertise, we can help ensure grid reliability, develop renewable power resources, and improve water utility networks.

For domestic businesses, as they are entering into new markets which have strict conditions in terms of quality and hygiene for example, ABB will have more opportunities to work with them to help them in upgrading their production facilities to the next level of manufacturing via automation, energy efficiency, and higher productivity. With ABB Ability, we deliver digital and connected solutions that enable our customers to improve quality, flexibility, productivity, and reduce production costs. This means increasing profitability and margins for our customers.

As a pioneering technology leader that works closely with utility, industry, transportation, and infrastructure customers, how has ABB been preparing to tap into the potential and cope with the challenges?

We are one of the earliest European investors in Vietnam and the only European transformer producer in the country. Our products serve the domestic markets and are exported to more than 60 countries in the world. We will continue with our long-term commitment to Vietnam as well as deepen our community engagement. We have invested in a high voltage factory in Bac Ninh to provide real examples of digitalisation and sustainability to help businesses understand the benefits of the application of advanced technologies.

We also established Vietnam’s first robotics technical and services centre in Bac Ninh in the north and will open another in Ho Chi Minh City in the south. These centres will not only help our local team, but will allow us to co-operate with customers to develop Industry 4.0 with our connected services and bring the manufacturing industry – and even universities – closer to companies like ABB to show them the incredible gains new technology could yield. We have been working closely with engineering universities in Vietnam through our 26-year presence in the country.

There are many activities running to nurture the next generations of capable engineers, including the donation of equipment to bring practical work process and experience into the learning environment, scholarship programmes, as well as apprenticeship and internship programmes. In robotics particularly, we also sponsor the 3D Simulation Software – RobotStudioTM to help students virtually programme and simulate the robotics systems for many different applications. The names of several universities have already come up to establish working relationships with and to acquaint students with the newest technologies coming out to the market.

Besides, ABB Vietnam has invested nearly 3,400 days of training, and sent our talents to a leading US business school to ensure they are up to date on the latest management ideas. This week we have just welcomed the first students from an innovative two-year apprenticeship scheme, where we worked with Bac Ninh College of Industry to train the next generation of manufacturing technicians for our facilities. I believe these investments in creating a skilled workforce coupled with leading digital technology will give Vietnam the best opportunity to improve productivity and competitiveness and move higher up the global value chain.

Though the EU-Vietnam Free Trade Agreement, European investment will continue to flow into Vietnam. What is your suggestion for the effective utilisation of the EVFTA?

To increase the businesses’ presence in the European markets, I think Vietnam needs to adopt industry digitalisation – advanced manufacturing through robotics and automation and ensure provision and access to sustainable energy, which is akey consideration for many European investors and consumers. I believe the Vietnamese government can provide support in three ways.

First, educational institutions should be encouraged to launch specific courses in relevant subjects such as robotics, machine learning, and Industry 4.0 to ensure a ready supply of graduate talent to satisfy the needs of employers.

Second, there needs to be streamlined and transparent decision making, particularly to stimulate the adoption of the latest technology. Examples could include low-cost finance and fiscal incentives to private investors and industry players who use smart technology. For example, as in Korea, the government could provide higher feed-in tariffs or charge lower taxes to renewable projects that use battery energy storage. In addition, mandating smart technology in government tenders, government procurement, and the licencing of investment should ensure that Vietnam develops smart, sustainable, and digital technologies.

Third, focus needs to be set on local innovation, supporting local startups, and fostering a partnership model between the industry, the government, and the academia in new-age technologies (AI, ML, robotics).

By Phuong Thu

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