Support industry has development potential

Support industry has development potential

Viet Nam's support industry has been urged to expand and capitalise on the opportunities created by foreign firms establishing manufacturing and assembling facilities in the country.

The comment was made by Reed Tradex Deputy Managing Director Duangdej Yuaikwarmdee during a conference on the country's support industry held in the capital city on Wednesday.

Businesses that produce parts to support manufacturing play an important role in the production process, but many Vietnamese firms have failed to win contracts to supply parts to foreign-invested manufacturing projects.

Yuaikwarmdee said that continued economic integration into the ASEAN community had made trade in machinery, technology and other products easier, and this helped speed up the development of Viet Nam's industry and trade sectors.

However, rising competition from other countries in the region with promising industrial capacities, also required the country to further improve its support industry, he said.

A large gap remained in terms of capacities between domestic firms in support industry and those from regional countries, said Dao Thu Vinh, deputy director of the Ha Noi Department of Industry and Trade.

Few local firms have won contracts to supply foreign-invested enterprises in Viet Nam while those that have been successful in securing contracts supply the most basic of parts, Vinh said.

Without greater efforts, she warned, the domestic firms would likely to lose their home market to competitors from regional countries.

Viet Nam Association of Machinery Industry chairman Nguyen Van Thu suggested the domestic enterprises take initiatives in seeking orders for support industry products from foreign companies.

Local firms in the sector were also urged to continue to improve management capacities and invest in technical innovation to ensure higher quality products that better meet the demands of foreign enterprises.

Securing contracts as parts suppliers for foreign companies would not only help local businesses have more capital to reinvest in sharpening their internal capacities but also helped Vietnamese businesses to expand their foot-hold in the global production chain, he said.

Meanwhile, more Government incentives for firms in the sector were also necessary, the chairman said.

The Government has offered favourable conditions for investment in support industry for both foreign and domestic investors.

Support industry manufacturing projects are advertised for free on the Ministry of Industry and Trade's website and some are eligible for financial assistance, while getting opportunities to join supply networks, recruit labourers and use facilities at industrial parks.

Local firms in the sector did not have to pay import duties on feed stock and other raw materials for production and scientific research

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