Aluminum casting & mold design services

In the Japanese manufacturing industry, maintaining cost competitiveness and optimizing supply chains are eternal challenges. Particularly in the fields of “aluminum molds” and “aluminum castings,” which require high-precision processing, domestic procurement has long been the mainstream. However, against the backdrop of the recent rapid depreciation of the yen, soaring raw material prices, and labor shortages, many companies are seeking a shift to overseas procurement. Among the options, “Vietnam” is currently attracting the most attention. With its abundant young labor force, pro-Japanese national character, and government-led industrialization policies, Vietnam is rapidly emerging as a manufacturing hub in Asia.
In this article, based on actual success stories supported by Daiwa Aluminum Vietnam, we will introduce the extent of cost reductions achieved in aluminum mold production in Vietnam and how Japanese quality is guaranteed, along with the latest statistical data. By reading this article, you will be able to resolve “quality concerns” regarding overseas procurement and gain insights for your next cost strategy.

Vietnam’s economic growth is outstanding among Asian nations. The real GDP growth rate in 2023 reached 5.05% (announced by the General Statistics Office of Vietnam), and growth exceeding 6% is expected in 2024. This growth is driven by the manufacturing sector, which has come to account for approximately 25% of the GDP.

In the field of aluminum processing specifically, many foreign-affiliated companies are expanding into Vietnam as a recipient of the “China Plus One” strategy. The entry of Japanese companies is also continuing; according to a survey by JETRO (Japan External Trade Organization), approximately 56.7% of Japanese companies in Vietnam responded that they are considering business expansion in the next one to two years. This is among the highest levels in Southeast Asian countries.

One of Vietnam’s greatest strengths is its “demographics.” The average age is very young at approximately 32.5 years, and because the country focuses on STEM education, it is an environment where it is easy to secure talented young engineers proficient in CAD/CAM. They are quick to acquire technical skills in 3D modeling and precision processing, which are essential in mold making, and a system is being established to digitalize and inherit the “tacit knowledge” held by skilled Japanese technicians.

The greatest merit of aluminum mold production in Vietnam is, above all, the low “labor costs.” As of 2024, the statutory minimum wage in Vietnam (Region 1) is approximately 4.96 million VND (just over 30,000 JPY) per month. Even for technical interns or engineer-class staff, labor costs can be kept to about 1/5 to 1/3 compared to those in Japan.

Since mold making has a “labor-intensive” aspect that requires significant man-hours for finishing and adjustment, this difference in labor costs is directly reflected in the product unit price. Generally, it is not uncommon to reduce total production costs by 30% to 50% compared to production within Japan.

The procurement of aluminum ingots within Vietnam is also stable. Vietnam is said to have the world’s second-largest bauxite reserves (approximately 5.8 billion tons), and the construction of supply chains from upstream processes is progressing. Furthermore, with the development of major ports such as Hai Phong Port and Da Nang Port, the lead time to Japan is relatively short and stable at about 2 to 3 weeks compared to other locations in Southeast Asia.

Key Data: Vietnam Investment Environment and Cost Indicators

Even if costs are low, there is no value as a manufacturing business if quality is not maintained. At Daiwa Aluminum Vietnam, we have introduced Japanese-made machining centers and 3D measuring machines to establish an equipment environment equivalent to that in Japan. To guarantee the ±0.01mm level of accuracy required for aluminum molds, we strictly implement processing in constant-temperature rooms and 100% inspections.

The biggest concern in overseas procurement is the “language barrier” and “misinterpretation of specifications.” To resolve this, we employ Vietnamese bridge engineers with extensive practical experience in Japan. They accurately convey everything from minute instructions on drawings to the required texture of the finish—often referred to in Japan as “Aun no Kokyu” (harmonious unspoken understanding)—to the local work staff.

Furthermore, by conducting weekly progress reports via online meetings and sharing photos of the work in progress, we have established a system where customers can “visualize” the factory status while remaining in Japan. This minimizes the risk of delivery delays.

A certain major domestic automotive parts manufacturer reached a point where their long-used aluminum casting molds reached the end of their lifespan and required renewal. However, when they requested a quote from a domestic mold maker, the price presented was approximately double that of five years ago due to soaring raw material and energy prices. This was a critical situation where the profitability of the product could no longer be maintained.

Consequently, our company proposed a plan to handle everything from mold design to casting and processing consistently at our Vietnam factory. Initially, the customer was cautious, wondering if “Vietnamese-made molds could achieve Japan’s strict dimensional accuracy.” However, by presenting our sample processing data and quality control processes based on ISO9001, they decided to proceed with a trial.

As a result, mold production costs were successfully reduced by 42% compared to the domestic quote. Additionally, by adopting an integrated production system, the period from mold production to the first sample (T1) was shortened by 15% compared to conventional methods. The delivered molds have been operating without trouble even in mass production exceeding 100,000 shots, and they have received evaluations stating that the quality is “comparable to those made in Japan.”

Protecting intellectual property is a crucial point when expanding into Vietnam. Our company maintains a factory management system with strict security, ensuring server management of drawing data and thorough measures to prevent information leakage by departing employees. The Vietnamese government is also strengthening the protection of intellectual property rights (IPR), and the 2022 revised Intellectual Property Law has established a legal framework in line with international standards.

Among Southeast Asian nations, Vietnam maintains a stable political system despite being a socialist republic. The extremely low risk of political upheaval, as seen in Myanmar, or intense strikes observed in other countries, is a great source of reassurance when building a supply chain.

Aluminum mold production in Vietnam has evolved from the era of “cheap but poor quality” to a strategic “high quality, low cost” option. By combining the advantage of labor costs, abundant young talent, and a quality control system based on Japanese standards, it serves as a powerful prescription for the cost challenges faced by the Japanese manufacturing industry.

The key to success is choosing a partner who can correctly understand local technical capabilities and maintain close communication. Daiwa Aluminum Vietnam will accurately give shape to our customers’ design intentions and support the compatibility of cost reduction and quality improvement. For those who feel challenged by current procurement costs or are considering taking the first step into overseas procurement, why not experience the possibilities by first requesting a quote from a single drawing?