HCM City boosts the development of supporting industries
HCM City boosts the development of supporting industries
Foreign manufacturers in Viet Nam are increasingly looking for feedstocks and intermediate goods locally to reduce costs and minimise risks as the COVID-19 pandemic continues to disrupt global supply chains.
This is an unprecedented opportunity for local firms in the supporting industries to enter the supply chains of foreign firms, Do Phuoc Tong, chairman of the HCM City Mechanical and Electrical Enterprise Association, said.
The pandemic hit production, but it is now being restored and speeded up as orders start to come back.
Le Nguyen Duy Oanh, deputy director of the Centre for Supporting Industries Development in HCM City, said foreign manufacturing companies in the electronics, mechanical engineering, robotics, and factory automation and other sectors like Samsung Electronics, Techtronic Tools, Panasonic, and BOSCH sought more than 400 types of components from local suppliers at the Sourcing Fair for Supporting Industry held in HCM City last month.
More than 300 business matches between them and local supporting industry companies were made at the event, she said.
But to capitalise on the opportunity to further penetrate the global supply chain, Vietnamese firms must improve their technology to make products of higher quality at competitive prices, she said.
According to the HCM City Union of Business Associations, local companies still supply only simple products without high value addition and not core ones.
A majority are small with limited resources and limitations in terms of production scale, controlling costs adopting technology.
In terms of space for production, industrial parks and high-tech zones in the city are almost fully occupied and it is not possible to develop new production facilities in residential areas, it pointed out.
It wanted the Government to therefore create more favourable conditions for firms investing in the sector such as subsidising loan interest for longer periods.
Vo Van Hoan, deputy chairman of the city People's Committee, said the city government would do its best to develop supporting industries, considered the backbone of the manufacturing sector and an important factor in attracting foreign manufacturing firms.
The city has issued a number of resolutions and directives to help develop supporting industries in the next 10 years, he said.
It would have policies to support firms that seek to adopt advanced technologies in production and consider and come up with more mechanisms and policies to provide firms with greater support to invest in machinery and equipment to produce high-tech products, he said.
The city has set aside more than 300 hectares of land to develop a hi-tech supporting industrial park, he said.
The establishment of the park has attracted interest from numerous local and foreign firms.
According to enterprises, if such an industrial park can be set up with hi-tech supporting industry firms, it will provide a big boost to the development of the city’s supporting industries.
But the city needs to carefully consider criteria applied to investors in the park since if they are too strict domestic enterprises would not be able to meeting them, they said.
