Support industry urged to boost capacity

12:08 | 06/05/2018 Industry

(VEN) - Vietnam plans to prioritize development of support industries serving component and spare parts, textile and garment, leather and footwear, and high-technology industries.

support industry urged to boost capacity
The demand for support industry products serving the automobile industry is huge

Meeting 10 percent of domestic demand

According to the Ministry of Industry and Trade’s Department of Industry, most support industries in Vietnam need to improve their production capacity and technology, given that they currently only meet 10 percent of the domestic market demand. Vietnamese enterprises barely satisfy any of demand for high-tech support industry products, as the gap between their capability and multinational corporations’ requirements remains large. Some support industry producers are only interested in production expansion and haven’t paid heed to intensive investment in technology improvement. Ensuring stable quality, punctual delivery and reasonable price is integral for producers to join multinational corporations’ production chains.

The government issued Decision 68/QD-TTg on development of support industries from 2016-2025, providing many preferential policies and programs for support industry producers. These policies and programs are designed to pave the way for enterprises to improve capability, access markets and technology, develop human resources, join global value chains, and reduce the cost of such industrial products as automobiles, textiles, garment, leather and footwear, and electronic products.

Increasing local content

Support industry manufacturers are expected to meet 45 and 65 percent of the domestic demand by 2020 and 2015, respectively. Under a plan to 2020 with a vision to 2025, the government will prioritize development of support industries serving component and spare parts, textile and garment, leather and footwear, and high-technology industries. The government has set a target for support industry producers to meet 35 and 55 percent of the domestic demand for metal, plastic, rubber, electrical and electronic components and spare parts for different industries by 2020 and 2025, respectively, with priority given to production of products serving high-tech industries. Meanwhile, local industry is expected to meet 65 and 75-80 percent of domestic textile-garment and leather-footwear part and component demands by 2020.

Support industry producers serving high-tech industries will focus on development of materials and equipment for special use, software and services. Providers of equipment for special use and technology transfer services will be developed.

Annually, based on specific programs and proposals of the Ministry of Industry and Trade, the Ministry of Finance allocates state capital for support industry development. People’s committees of centrally governed provinces and cities draw up plans and budget estimates for those activities in accordance with the Budget Law and current regulations.