Support industry business gets new boost

09:03 | 27/03/2019 Industry

(VEN) - Major corporations have been implementing support industry projects, providing opportunities for small- and medium-sized enterprises to participate in regional and global supply chains.

support industry business gets new boost

Large investments

The Truong Hai Auto Corporation is expected to pour several billion US dollars into new projects in Quang Nam Province, including the Chu Lai-Truong Hai Automobile Mechanical Industrial Zone.

Truong Hai Auto Corporation Chairman of the Board of Directors Tran Ba Duong said the project would include small enterprises at home and abroad producing components and spare parts for automobiles and agricultural machines, as well as other export products.

In addition to attracting domestic and foreign enterprises to develop component supply chains, the corporation has also built large-scale component manufacturing factories and exchanged products with regional producers. “The corporation makes main components, while auxiliary details are intended for small suppliers. In addition, the corporation cooperates with foreign partners to purchase raw materials and exchange products by exporting seat upholstery and importing engineering parts,” Tran Ba Duong said.

VinFast is also planning a manufacturing complex to attract leading industrial corporations and small- and medium-sized enterprises in order to produce support industry components and spare parts. VinFast aims to create a synchronous supply chain to develop the auto industry, turning it into one of the country’s key industrial sectors. “We are ready to create the best conditions for investors, and cooperate with leading manufacturers at home and abroad to establish joint ventures, giving priority to producers already present in Vietnam and Vietnamese support industry businesses,” said Vo Quang Hue, deputy general director of Vingroup in charge of the VinFast project.

Guiding support industry development

With the basic guidance of large industrial corporations in the country, Vietnamese support industries have begun to record progress. If this strategy succeeds, it will overcome the weakness of Vietnam’s support industries, which is the lack of enterprises capable of leading the industry’s growth, as pointed out by Deputy Prime Minister Trinh Dinh Dung in a conference in Hanoi in late 2018 on developing Vietnam’s support industries.

Vietnam’s goal is to increase local content rate to maintain sustainable development of domestic industries and avoid reliance on imports, and paying attention to the rules of origin to maximize the advantages of free trade agreements. The story of the garment and textile sector is a typical example. As one of the key export sectors of Vietnam, it has achieved high growth in recent years. However, the sector still depends heavily on imported raw materials, making it difficult to increase its added value.

Strong development of the garment and textile support industry by increased local content will guarantee sustainable development of the sector.

According to the Ministry of Industry and Trade, to promote the development of support industries, businesses need to enhance their technical level, improve management and production capacity, strengthen technology transfer, focus on scientific and technological development, and promote training of human resources.

There should be policies to attract the participation of businesses in each stage of supply chains. In addition, expanding the scale and improving the capability of support industry businesses to meet the requirements are needed.

Truong Hai Auto Corporation Chairman of the Board of Directors Tran Ba Duong said that to encourage the

development of domestic support industry businesses, Vietnam needs to cut the special consumption tax imposed on

locally made parts. Links among businesses should also be promoted, he added.

Lan Anh