Major foreign manufacturers provide opportunities for support industries
Major foreign manufacturers provide opportunities for support industries
The Covid-19 pandemic has affected the supply of goods of large enterprises in the global support industry, providing an opportunity for Vietnam's support industries to promote internal resources to meet buyers’ needs.
Large corporations seek domestic supplies
According to Do Thi Thuy Huong, Vice President of the Vietnam Association for Supporting Industries and Executive Board Member of the Vietnam Electronic Industries Association (VEIA), a number of manufacturers in the global supply chain are gradually focusing on Vietnam.
For example, Apple moved 11 factories of Chinese Taipei enterprises in its supply chain to Vietnam, while others have expanded existing production facilities in Vietnam, including Foxconn, Luxshare, Pegatron, and Wistron. Samsung has decided to expand in Vietnam by building the group's largest research and development center in Southeast Asia, valued at US$220 million in Hanoi, and plans to expand factories in Bac Ninh and Thai Nguyen provinces. Earlier this year, Dong Nai Province granted investment licenses for two US$100 million projects of Hansol Electronics Vietnam, a Korean component supplier for Samsung. An American enterprise, Techtronic Industries Vietnam Manufacturing Co., Ltd (TTI Group) is actively searching for more than 300 domestic suppliers to provide thousands of components and parts.
Support industry enterprises need state support to join global supply chains |
Do Phuoc Tong, General Director of the Duy Khanh Engineering Co., Ltd, said that to meet the needs of large corporations for support industry products, domestic enterprises must meet production technology requirements. Currently, his company is investing in a new factory valued at more than VND180 billion to produce new components and equipment for FDI enterprises.
Enterprises need to be more dynamic
Do Thi Thuy Huong said the positive market signals are also an opportunity for domestic enterprises to participate in the supply chain. However, in order to seize these opportunities, they need to improve their competitiveness and apply advanced technologies and production models. In addition, the government needs to support infrastructure development, reform administrative procedures, and improve competitive capacity at national level. In the long term, the state needs to formulate the Law on Supporting Industry, with specialized policies to boost support industry development, and attract investment flows and production shifts from other countries.
Pham Tuan Anh, Deputy Director of the Vietnam Industry Agency (VIA) under the Ministry of Industry and Trade, said the ministry is making efforts to improve related policy and coordinate with international organizations and multinational corporations to support enterprises in improving their capacity, management capabilities and most importantly to participate in supply chains.
The VIA representative also mentioned factors that create opportunities for the formation and development of domestic value chains. These include effective investment attraction and promotion of business connections and linkages between Vietnamese enterprises and multinational enterprises and between domestic and foreign manufacturing and assembly companies. In particular, he suggested building concentrated supporting industry clusters for specific industries to increase added value and competitiveness of Vietnamese products and enterprises in the global value chain.
