Supporting industries expected to become key link in supply chains

Supporting industries expected to become key link in supply chains

The presence of multinationals like Samsung, Canon, Intel, and Bosch has provided a strong boost. These giants bring not only investment or technology but also stringent quality and management standards, compelling Vietnam’s enterprises operating in supporting industries to upgrade themselves.

Việt Nam is working to turn supporting industries into a key link in supply chains. VNA/VNS Photo

Now is a golden opportunity for supporting industries – a backbone of modern manufacturing – to break through as global “eagles” (multinational corporations) are actively seeking reliable partners for their supply chains, many insiders have said.

According to the Ministry of Industry and Trade, Việt Nam’s industry has made great strides, with a growing number of enterprises, enhanced production capacity, and notable advancements in certain key areas.

Currently, Việt Nam has over 40,000 enterprises operating in supporting industries, accounting for nearly 10 per cent of the total industrial businesses.

The rate of locally made components in certain sectors such as automobile and electronics production, has increased but remains modest. The presence of multinationals like Samsung, Canon, Intel, and Bosch has provided a strong boost. These giants bring not only investment or technology but also stringent quality and management standards, compelling Việt Nam’s enterprises operating in supporting industries to upgrade themselves.

Many local enterprises have boldly invested in modern machinery, adopted international quality management systems (ISO, IATF), and gradually become Tier-2 and Tier-3 suppliers in the supply chains of big corporations. It is increasingly common to see Vietnamese companies that once produced only simple packaging or plastic components now supplying precision mechanical parts and complex molds for global corporations. These success stories are vivid proof of the resilience and adaptability of Vietnamese firms.

Phan Đăng Tuất, Chairman of the Vietnam Association for Supporting Industries (VASI), noted that although the number of supporting industry firms is large, most of them remain small or micro-sized, with limited finances, outdated technology, and weak management capacity. These make it difficult for them to meet large orders with high quality requirements and strict deadlines from multinational corporations.

Surveys on technology and production capacity conducted by independent financial institutions show that most supporting industry firms in the country still apply low to medium-level technology.

Insiders said weak investment in research and development (R&D) has left products lacking innovation and competitiveness. Meanwhile, training has not kept pace with market demand, creating a gap between labour supply and demand.

Despite efforts, links between Vietnamese supporting industry firms and foreign-invested corporations remain weak. Vietnamese firms often struggle to access information, technical requirements, or supplier evaluation processes of multinational firms. Conversely, multinationals face difficulty finding qualified local suppliers, forcing them to import most components. As a result, the rate of locally produced parts is still low, averaging 20–30 per cent across most industries.

Nguyễn Đức Trung, Chairman of the Board of Directors of the HBT Vietnam Precision Mechanics JSC, said that as global supply chains shift due to geopolitical concerns and trade tensions, Việt Nam – with its strategic location, stable investment climate, and an extensive free trade agreement (FTA) network – has emerged as an ideal destination for multinationals, offering major opportunities for local supporting industry businesses.

The Government has introduced various incentives, including tax breaks, training support, and technology transfer programmes, to promote the industries. Notably, the Politburo's Resolution 23-NQ/TW, which outlines orientations for building national industrial development policies through 2030, with a vision to 2045, designates supporting industries as a priority area.

Experts said supporting industry enterprises should leverage preferential rules of origin and tariff incentives under the 16 new-generation FTAs Việt Nam has signed to boost their export competitiveness. They added that Việt Nam’s open foreign policy will also contribute to attracting more high-quality FDI, which in turn will further raise demand for supporting industries. 

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