Support industries to get 2020 boost

10:09 | 17/02/2020 Industry

(VEN) - Under the Support Industry Development Strategy by 2020 set by the Ministry of Industry and Trade, Vietnamese supporting industry products are forecast to meet 45 percent of essential requirements for industrial production and domestic consumption, and yield export revenues accounting for 25 percent of industrial production value.

support industries to get 2020 boost

Joining global supply chain

Over the last few years, Vietnamese support industry enterprises have made significant progress due to state support in terms of preferential mechanisms and policies. The Ministry of Industry and Trade (MOIT) has implemented support industry development programs, offering companies help in applying modern management systems and standards to improve product quality and reliability and gradually participate in the global supply chain.

MOIT data show that the number of enterprises operating in support industries accounted for nearly 4.5 percent of the total enterprises in the manufacturing and processing industries, creating jobs for more than 600,000 workers. Their net production and business turnover in 2018 was estimated at over VND900 trillion, contributing about 11 percent of the total revenue of the manufacturing and processing industries.

General Director of the Hanoi Plastics Joint Stock Company Bui Thanh Nam said his company has been in a long-term cooperative relationship with Toyota since 2010, when the company produced only two parts for Toyota. By 2018, the company was making 30 parts and 14 more in 2019.

“According to the MOIT’s planning, the output of nine-seat (or fewer) vehicles by 2020 will be 415,000 units, and the localization rate was set to reach 50 percent by 2030, as required by the government. This is a very big opportunity for the An Phat Holdings Group and Hanoi Plastics Joint Stock Company. We have established a company specializing in manufacturing molds to process electronic products and also a large processing center. These are expected to develop with support from the government,” Bui Thanh Nam said.

A representative of the Truong Hai Automobile Corporation (Thaco) said the company has 13 support industry plants which supply auto parts not only to Thaco but also to other enterprises in Vietnam.

Thanks to the program “Developing good suppliers”, the Minh Nguyen Supporting Industry Joint Stock Company has invested VND1.6 trillion in advanced equipment and technologies to produce quality products. The company has become a first-tier supplier for Samsung Vietnam, manufacturing electronic components.

Considering support industries a major sector

Minister of Industry and Trade Tran Tuan Anh said to boost the development of support industries, the state must provide more support and issue specific policies to help small and medium-sized enterprises (SMEs) as well as micro enterprises enter the support industry market.

The state also needs to urge reasonable allocation of local budgets for support industries, prioritize support industry development for certain downstream industries like automobile, electronics, garments and footwear. “Other issues need to be solved, including improving capacity of supporting industry enterprises, bank credit supports, difficulties in tax levies, and environmental treatment,” Minister Tran Tuan Anh noted.

Most recently, the MOIT has inaugurated Vietnam’s first Industry Development Center in Hanoi to boost domestic support industry programs and help Vietnamese enterprises participate in global supply chains. This event marked an important step by the ministry in support industry enterprises and acting as a bridge to enhance the development of the country’s support industries.

Head of the MOIT’s Industry Agency Truong Thanh Hoai said the ministry has worked out cooperation programs with leading FDI enterprises, including a memorandum of understanding with Samsung on training Vietnamese consultants in the support industry. So far, Vietnam has more than 300 consultants trained in the Republic of Korea and at Samsung manufacturing facilities who meet the requirements of the Samsung supply chain. “There are 30-40 enterprises that are first-tier suppliers and hundreds of other enterprises are second-tier suppliers, creating a close link between the FDI and Vietnamese support industry enterprises,” Hoai said.

Minister of Industry and Trade Tran Tuan Anh: The state needs to formulate a flexible policy on import taxes on parts and accessories to help support industry enterprises reduce product prices, improve their competitive capacity and create a favorable environment for support industry start-ups.

Lan Anh