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THACO opens $22mn agricultural machinery factory

Released at: 14:24, 22/02/2018

THACO opens $22mn agricultural machinery factory

Photo: THACO

Truong Hai Auto opens Quang Nam factory on February 21.

by Minh Do

The Truong Hai Auto JSC opened a THACO agricultural machinery factory with a capacity of producing 2,000 tractors a year on February 21 in the Chu Lai - Truong Hai Automobile Mechanical Complex at the Chu Lai - Truong Hai Open Economic Zone in central Quang Nam province.

Construction began in January 2017 on an area of 12,500 sq m with total investment of VND500 billion ($22 million) and the factory will manufacture agricultural tractors with a capacity of 18HP - 120HP, harvesters, and farming equipment for agriculture under the ISO:TS16949 quality management system.

It has a designed capacity of 2,000 tractors a year in the first phase, 3,000 cultivators, and 1,000 combine harvesters. The factory was purchased from the LS Mtron Group, the largest agricultural machinery manufacturer in South Korea, with a 40 per cent market share, and with factories in Brazil and China and providing tractors in over 40 countries.

LS Mtron transferred tractor manufacturing technology and trained THACO’s engineers to localize tractor components to reach a regional value content (RVC) of up to 50 per cent. Machinery and equipment will be produced by THACO with advice from LS Mtron and some test equipment imported from South Korea that cannot be produced in Vietnam, such as speed test equipment, lift test equipment, and power take off (PTO) equipment.

Localized components will be produced by THACO-supported industrial plants and domestic producers, with completely-knocked-down (CKD) components imported from South Korea. Completely assembled agricultural tractors will be tested on state-of-the-art production lines, including lift tests, speed tests, and power take-off (PTO) tests.

In design, the factory will apply NX Unigraphic 13.0 software from Germany's the Siemens Group and invest in mechanical design software and CAN software to enhance solutions that optimize the production of localized components.

The factory will also invest in more rapid prototypes and 3D scanners for R&D, ensuring quality and reliability in its tractors. The factor’s goal is to gradually master production technology, improve technology content, and create high-quality tractors that are suitable to Vietnam’s terrain and cultivation conditions.

The tractors will be sold domestically, with a target of a 7 per cent market share this year, or 500 tractors, and 2,100 tractors, or a 38 per cent market share, by 2026. The factory will continue to research and develop other agricultural machinery to meet domestic demand and export. Major export markets include Laos, Cambodia, the Philippines, Myanmar, and Indonesia, and others within the trading system of LS Mtron.

The factory will prioritize the use of materials available in Vietnam, cooperate with local manufacturers to produce localized components, and import high-tech components that cannot be produced domestically from South Korea and ASEAN countries.

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