10:16 | 11/11/2019 Industry
(VEN) - The southern province of Dong Nai is one of the country’s three leaders in attracting investment in support industries and is now home to 600 such enterprises.
Investment in support industries soars
The management board of Dong Nai industrial parks reported that in the last four years, the number of foreign direct investment (FDI) enterprises investing in supporting industries has increased rapidly. For example, since early this year, the province has attracted 53 newly licensed FDI projects, including 18 support industry projects with registered capital accounting for over 41 percent of total new projects.
Four types of support industries attract the most attention, namely manufacturing spare parts, accessories for the garment, textile, leather and footwear industries; manufacturing equipment for various kinds of machines; manufacturing electronic components; and production of chemical products.
Speaking about the development potential of support industries in Dong Nai, a leader of the Vietnam Kaneco Co, Ltd based in the Nhon Trach 3 Industrial Zone - phase 2 (Nhon Trach District) said the company chose to invest in support industries to supply products to the domestic market as well as its main exporting markets, Japan and the Republic of Korea. Currently, the company is also expanding production to bring support industry products to ASEAN markets. Vietnam Kaneco Co, Ltd specializes in manufacturing safety valves for machinery, gas production equipment, liquid chemicals, and oil. Only a few businesses in Vietnam produce these products, ensuring the company a large market share.
According to major garment, textile, leather and footwear enterprises, the ratio of imported input materials has decreased from 80-95 percent to 50-60 percent or lower, with many FDI enterprises producing fiber, leather and related accessories and supplying input materials.
For the past three years, besides promoting trade abroad, Dong Nai has paid great attention to trade promotion domestically to introduce support industry products of local FDI enterprises to Vietnamese businesses and reduce imports.
Many businesses producing equipment and components for machinery in Dong Nai also said that iron, steel, aluminum and alloy materials are almost all made domestically. Thus, when selling products under signed trade agreements, exporters are less worried about the localization rates.
Tran Van Vinh, Vice Chairman of the Dong Nai People’s Committee, said the province often organizes 2-3 trade promotion programs each year so that FDI and domestic enterprises can meet, exchange experiences and sign trade deals.
In addition, Dong Nai Province has been expanding its industrial parks along with preferential policies, notably in finance, tax, management and technical assistance. In its industrial development orientation by 2030 with a vision to 2045, the industry sector will account for 53-54 percent of the provincial GDP. Dong Nai also plans to develop large-scale domestic support industry enterprises that can compete in the world market.
The Dong Nai Department of Industry and Trade acts as an advisor to the provincial People’s Committee about a
support industry development scheme by 2025 with a vision to 2030, to strengthen capabilities of domestic
enterprises in the global value chain.