Vietnam joins Boeing, Airbus industry supply chains

  • by VNBUSINESS
  • November 12, 2014

Vietnam has joined the global production chains of world’s most reputable aircraft manufacturers – Boeing and Airbus – by providing low-value parts and accessories.

Boeing, Airbus, supply chains

Most people are unaware that modern Boeings and Airbuses are built with some parts made in Vietnam.

MHI Aerospace Vietnam, a factory of Mitsubishi Heavy Industries (MHI) located in the Thang Long Industrial Zone in Hanoi, will assemble passenger doors for Boeing 777 model.

A senior executive of MHI Aerospace Vietnam said that in the immediate time, it can assemble four to eight doors every month, which would increase to 32 in the future.

The factory also provides flaps for the Boeing 737.

The Japanese-invested factory plans to expand the production scale in Vietnam, assembling other aircraft parts and accessories to be assigned by the holding company in Nagoya, Japan.

MHI is known as the strategic partner of Boeing, in charge of making passenger doors and back bodies of Boeing 777 aircraft.

Nikkiso Vietnam, a 100 percent Japanese owned factory in Hung Yen province, also plans to provide more aircraft parts to both Boeing and Airbus.

Three years ago, Nikkiso Vietnam for the first time supplied blocker doors, made of composite material, a key component on Boeing 777’s GE 115 engine.

In April, Airbus announced that Nikkiso Vietnam would produce and supply composite interior parts and outer panels to retrofit planes to meet new Sharklet specs that serve the manufacturing of A320s.

The fact that factories in Vietnam now can provide components to aircraft manufacturers is “good news” which will pave the way for Vietnam to take a larger part in the manufacturers’ global supply chains.

However, observers commented that Vietnam is too optimistic about its ability to join the global chains.

Shigefumi Tatsumi, Vice President of MHI, said thousands of separate parts needed to assemble Boeing 777 passenger doors are imported from Japan or from other countries.

Similarly, all the machines, materials and components needed to assemble Boeing flaps over the last five years are all imports. What Vietnam can provide to the production chain is the labor force of 100 workers.

Do Nhat Hoang, Head of the Foreign Investment Agency (FIA), who was present at the opening ceremony of a new workshop at MHI Aerospace Vietnam, asked MHI to seek parts suppliers in Vietnam instead of foreign sources.

In reply, a representative of MHI said the company once considered increasing the locally made content ratio of passenger cabin’s doors to 10 percent, but encountered too many difficulties when implementing the plan.

The question if Vietnam can improve the localization ratio of aircraft components remains unanswered.

The representative said making components and accessories in Vietnam will be a very complicated work, because the production workshops must satisfy many strict requirements set up by aircraft manufacturers.

The biggest advantage Vietnam has when joining the global supply chain, according to MHI, is the industrious, cheap and skilful labor force.

Kim Chi

Source: VietNamNet

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