09:31 | 04/03/2020 Companies
(VEN) - Vietnam aims to have 1,000 supporting industry enterprises participating in the production network of multinational corporations by 2020, and 2,000 ones by 2030. To achieve this goal, the Ministry of Industry and Trade (MoIT) has been cooperating with the Republic of Korea’s tech giant Samsung on programs to improve the capacity of local supporting industry enterprises.
Over the last few years, Vietnam’s supporting industry has played an important role in supply chains and the global value chain. According to recent data, the number of supporting industry enterprises accounts for nearly 4.5 percent of the total enterprises in the processing and manufacturing industries. They have created more than 600,000 jobs, with net production and business turnover in 2018 estimated at over VND900 trillion, contributing about 11 percent of the total revenue of the processing and manufacturing industries. The localization rates of household electronic appliances reached 30-35 percent, and of electronic equipment in automobile and motorbike manufacturing about 40 percent.
Being aware of the importance but also the limitations of the supporting industry, the government has made a concerted effort to boost their development. It has issued Decree 111/2015/ND-CP on the development of supporting industries, Decision 10/2017/QD-TTg on management and implementation of the development program and Decision 68/QD-TTg approving the program on development of supporting industries from 2016 to 2025.
To realize the targets for supporting industry development, the MoIT has recently cooperated with Samsung Vietnam on training Vietnamese consultants to improve production and product quality in the support industry. The program helped participating enterprises join the global supply chain, specifically in supplying accessories and parts for Samsung plants in Vietnam.
At present, Samsung plans to form a network of potential domestic suppliers, not only first-tier but also second-tier suppliers in a wide range of areas and products. The number of first-tier suppliers increased from 35 in 2018 to 42 enterprises in 2019, and those of second-tier suppliers from 157 in 2018 to 170 enterprises in 2019. Previously, the suppliers were mainly engaged in producing packages and plastic products, but have gradually shifted to making electronic products and thus yielding higher added values.
Director of Samsung Vietnam Choi Joo Ho said since starting operations in Vietnam in 2008, Samsung Vietnam has contributed to the development of local support industries through various support programs. For example, Samsung has dispatched experts to Vietnam to advise local firms seeking to enhance their production activities. Recipients of the consultancy services reported significant improvement in productivity and product quality, lower inventories and more opportunities to join in the tech giant’s and other global supply chains.
In addition, Samsung Vietnam is also closely cooperating with the MoIT on training Vietnamese consultants in order to improve production and quality at Vietnamese firms. “From 2020, Samsung through cooperation with the MoIT will train 200 experts in manufacturing molds to improve the quality of supporting industry which is regarded as a key in the manufacturing sector,” the company announced.
Choi Joo Ho expressed his hope that Samsung Vietnam will continue to cooperate with the Vietnamese government and agencies to expand training activities in specialized fields, and share experience to help domestic supporting industry enterprises achieve production capacity that meets global standards.
|Vietnam aims to raise supporting industries’ share in the industrial sector’s production value to 11 percent in 2020 and 14 percent by 2030, and strives for supporting industry products to meet 70 percent of domestic production and consumption demand.|