Localization fortifying support industries

15:59 | 27/06/2017 Industry

(VEN) - The Japan External Trade Organization (JETRO) in Hanoi and the Reed Tradex Ltd. Co. announced the cooperation between both parties with great support from the Vietnamese government via the Vietnam Trade Promotion Agency (VIETRADE) and from a strong local association - the Vietnam Electronic Industries Association (VEIA), to launch the 7th Vietnam - Japan Supporting Industries Exhibition which is co-located with Industrial Components & Subcontracting Vietnam 2017 and NEPCON Vietnam 2017.  

localization fortifying support industries

All the parties have a mutual mission to offer the business opportunities and increase the localization index for the electronic industry and supporting industry in Vietnam and furthermore to grasp Information Technology Agreement (ITA) by the World Trade Organization (WTO).

Suttisak Wilanan, Deputy Managing Director of Reed Tradex – the organizer of NEPCON Vietnam (NEV) 2017, shared his positive belief on Vietnam’s capability and potentials, saying, “Imports have nearly tripled from 2011 to 2016, while exports have increased by nearly five times, rising from US$12.8 billion to US$65.8 billion in 2015. At the beginning of 2015, Vietnam is the 12th largest electronics exporter in the world and the 3rd largest in ASEAN, but at this rate, it is expected to climb up the list very quickly. In fact, Vietnam has already surpassed the goal of US$40 billion in electronic exports by 2017.”

He underlined the need of enhancing localization in the integration process, as a member of the WTO, Vietnam is also a participant in the Information Technology Agreement or ITA, and has a potential to take more advantages from the expansion of ITA. In order to do that, the country needs to raise productivity, move up the value chain and increase localization. Currently, foreign enterprises represent just one-third of electronic enterprises in Vietnam, but they are accounted for 90 percent of the nation’s total electronic export turnover and hold 80 percent of the local market share.

As the co-organizer of the 7th Vietnam - Japan Supporting Industries Exhibition, Hironobu Kitagawa , Chief of Representative of JETRO in Hanoi, also saw the low localization rate of raw materials, materials and components is inhibiting Vietnam’s growth. He said, “The localization level of raw materials, components and components of Japanese enterprises in Vietnam is very low, only 34 percent, while China is 68 percent and Thailand is 57 percent. Therefore, businesses are forced to import from neighboring countries such as Thailand, China. This is the cause of increased costs and risks for businesses.”

Moreover, Vietnam is in the competitive world where the nation needs to raise up the capability and complete the full supporting industry chain.

According to Suttisak Wilanan, the government has a 10-year plan to assist firms in the supply sector in their research and development, technology transfers and renewal, as well as in human resource training to better participate in the global production chain, and promote foreign direct investment in the industry.

From 13 – 15 September, NEPCON Vietnam 2017 will repeatedly return to Hanoi with a focus on demonstrating SMT, testing

technology, equipment. The leading technology providers of electronics industry as Techvalley, Sinfonia, Juki, Wkk, Sip,

Hibex and Lintec will showcase their electronics manufacturing intelligence solutions on the show floor.

Nguyen Huong