Panels & Furniture Asia Sep/Oct 2018

PANELS & FURNITURE ASIA • Issue 5 • September / October 2018 our yearly budget in new equipment and new technologies like UV and painting machines,” Mr Viet said. “Labour costs are also increasing in Vietnam, though the level of efficiency is nowhere near China’s, so there will be a lot of work for us to do in order to improve and gain an advantage, which is why we are investing in machinery to improve the factory. Unfortunately, that leads to another challenge Mr Liem faces: Managing his workers. “With orders transitioning from China to Vietnam, it is important for us to invest in new technology and equipment so that we can deliver on our orders in time and with better quality. Machinery does reduce labour, but the workers as well as management would need to improve. If the workers cannot use the machines properly, productivity would go down and the costs would rise as well,” he continued. “Vietnam is perfectly positioned with numerous competitive advantages over other Asian countries, especially with certain market events that have taken, or are taking, place. But i f V i e t nam wan t s to t ake ove r China and the United States, the f a c t o r i e s h e re wo u l d h a v e t o improve a lot, and invest more in machinery and human resources to increase the capacity to get orders from big customers so that they can push down the cost of the products. At the end of the day, it is higher productivity at lower cost.” Some challenges Lam Viet faces are the rising cost of labour as well as labour shortage Investing in machinery increases Lam Viet’s capacity while also pushing production costs down