VietNamNet Bridge - The value of the elevator manufacturing industry reached VND7.6 trillion in the first half of the year, with Vietnam leading South East Asia in elevator production capability.

A report of the Ministry of Construction shows that the construction industry had value of VND76 trillion in the first six months of the year, while the cost of elevators accounted for 10 percent of that value. 

According to Tran Tho Huy, general director of Thien Nam Elevator JSC, the demand for lifts from the low-level market segment, with buildings of 25 stories or less, accounted for 80 percent.

This is a major field for Vietnamese enterprises, which now hold more than 50 percent of the market share. Of the players, Thien Nam and Thai Binh hold 30 percent of the market.

Besides Thai Binh and Thien Nam, there are about 50 elevator trading companies, most of which do not have manufacturing factories in Vietnam, but they outsource to a Vietnamese company – HISA. 

The value of the elevator manufacturing industry reached VND7.6 trillion in the first half of the year, with Vietnam leading South East Asia in elevator production capability.

HISA is leading the market in terms of production capability with 2,000 products a year. The figure far exceeds the total output of both Thien Nam and Thai Binh. However, as an outsourcing company, HISA’s market share is modest.

The elevator industry existed in Vietnam prior to 1975. However, after Pham Vinh, considered the leader in the industry, left Vietnam, the industry went downhill until the 1990s.

During that time, the majority of lifts put into use were ones adapted from old products because spare parts were scarce. The profitability was just 10 percent. 

Meanwhile, the world’s large lift manufacturers such as Otis, Schindler, KONE, Thyssenkrupp and Mitsubishi were selling lifts at reasonable prices in Vietnam (users had to rely on their spare parts, equipment and maintenance services).

The strategy then crushed many well-known manufacturers in Asia, including Dong Yang from South Korea and Thai Lift from Thailand.

In 1994, Thien Nam Elevator was established, and in 1995, Thai Binh was set up. However, the opportunities only came in the 2000s, when the Chinese construction market witnessed a boom with high demand for elevators. The monopoly in the parts supply held by the big players was broken.

In 2015, Thien Nam reported revenue of VND400 billion from both sales and services. In the first six months of 2016, it had revenue of VND200 billion, an increase of 30 percent in comparison with the same period last year. It makes 1,000 products a year. However, Huy said the company does not distribute foreign products.

Meanwhile, Nguyen Phu Quoc from Thai Binh said the company’s revenue in the first half of the year was 15 percent higher than the figure in the same period last year.