13:00 | 19/10/2020 Industry
(VEN) - More than a decade ago, Dong Nai Province adopted regulations on attracting foreign direct investment (FDI) selectively, with top priority given to capital for support industries in order to increase product localization rate. This orientation places Dong Nai’s supporting industry as one of the biggest in Vietnam.
Leading global corporations
The southeastern province’s support industries include textile fibers, fabrics, tools and spare parts, electronic components, equipment for machinery and input materials for the footwear industry. In promoting investment programs with partners from Japan, the Republic of Korea (RoK), the US, Germany and Chinese Taipei, the province has for years given priority to its support industries. This policy has drawn international corporations to the province, such as Bosch, Hyosung, Fujitsu, Schaeffler, Vision Group, Kenda, and Mabuchi Motor.
The province’s goal is to provide input products to gradually increase the localization rate of products made by these corporations and other enterprises, enabling them to enjoy tariff preferences provided by the free trade agreements that Vietnam has signed.
The province has made significant inroads in this regard with nearly 50 percent of FDI capital poured into support industries. Top investors in this field are businesses from the RoK, Japan, and Chinese Taipei.
Park Hyun Bae, Chair of the Korean Business Association in Dong Nai, said for the past five years, there has been a strong wave of RoK businesses investing in Dong Nai’s industrial sector, many of those in supporting industry enterprises, which supply input materials to large corporations. The RoK is now the top foreign investor in the province with total investments of more than US$6.2 billion.
Local raw material
Dong Nai is gradually becoming the “capital” of the country’s supporting industry. In addition to new FDI investment, many businesses in this field have expanded production, such as Meggitt, Fujitsu, Kenda, Bosch and Hyosung, with their investment capital growing 1.5 to 3 times compared with the original capital.
|Developing its support industry is Dong Nai’s top priority|
The head of the Dong Nai Industrial Zones Authority Cao Tien Sy says the local supporting industry has become a major supplier of raw materials for the country and for exports, attracting additional FDI investors who can now easily find raw materials locally rather than having to import them.
Local leaders also affirm that over the past five years, Dong Nai’s supporting industry has made impressive progress, but they are urging the development of support policies to link businesses at the regional level. They refer for example to specific policy for the Southern Key Economic Zone in order to link and share value among businesses in the region, thereby developing the supporting industry on a much larger scale. The state also needs to adopt detailed policies directly targeting internal difficulties of supporting industry businesses like capital, technology, human resource training and market connection to help them achieve further growth.
|Dong Nai has attracted projects focusing on three areas as required by the government’s guidelines on support industry attraction. These include metal, plastic-rubber and electrical-electronic spare parts; support industries for the textile, garment and footwear industries; and support industries for the high-tech industry.|