09:20 | 18/08/2015 Industry
(VEN) - Deputy Minister of Industry and Trade Tran Tuan Anh said that in the current context of global economic integration, the Vietnamese industrial sector cannot survive and grow without developed support industries. Opportunities come
Deputy Minister of Industry and Trade Tran Tuan Anh (right) talks with Vietnamese businesses at a Samsung exhibition on support industries
All the many global groups which have invested in Vietnam such as Canon, Samsung, Hyundai, Nokia and LG want to increase the local content of their products in Vietnam. For example, Samsung has poured almost US$10 billion in the electronics industry and is working with the Vietnamese government to develop support industries to increase the localization rate. To achieve this goal, Samsung has organized exhibitions to show Vietnamese businesses components and parts it needs.
Samsung jointly worked with the Vietnamese Ministry of Industry and Trade to recently launch a Samsung electronics exhibition and workshop on support industries. At the exhibition the group announced a list of more than 200 kinds of components it is seeking from Vietnamese suppliers. The event attracted almost 300 domestic businesses which are expected to become a part of Samsung’s global production chain.
According to Tran Tuan Anh, the workshop has not only created an ideal environment for enhancing cooperation, but has also connected Vietnamese producers with foreign direct investment (FDI) companies which are operating in Vietnam.
Opportunities for the development of support industries are clear. The only question now is for Vietnamese businesses and authorities to make the most of these opportunities.
Don’t only rely on businesses
At the first exhibition of this kind held in 2014 under the association between Samsung and the Ministry of Planning and Investment, only seven Vietnamese businesses were capable of becoming Samsung’s support industry suppliers compared with 32 for this year including four first-level and 28 second-level suppliers, plus one business with potential to become Samsung’s first-level supplier and eight businesses with potential to become second-level suppliers, thereby increasing the total number of Samsung’s existing and potential Vietnamese suppliers to 41. The success resulted from initial efforts of Samsung, the government and Vietnamese businesses after more than a year of connecting them domestic and FDI businesses. However, there remains much to do to develop Vietnamese support industries. According to Nguyen Van Hao, director of the HTMP Company which is a first-level supplier of Samsung’s third factory specializing in producing vacuum cleaners, to become Samsung’s first-level suppliers, Vietnamese businesses must try hard and compete with their rivals, including FDI businesses which have invested in Vietnam together with Samsung. In consideration of this, relying on businesses is not enough. To develop support industries the government needs to apply incentive policies via preferences in terms of ground leasing, expanding factories and obtaining credit.
Tran Tuan Anh also said that support industries need the government’s strong policies. With that in mind, the Ministry of Industry and Trade has drafted a decree on developing support industries via comprehensive mechanisms and policies which are commensurate with Vietnam’s international and regional economic integration.
The draft decree on developing support industries aims to connect Vietnamese businesses with foreign giants and dramatically increase capital from the state and FDI and domestic businesses.