Vietnamese enterprises expand cooperation with foreign partners

06:00 | 04/05/2022 Industry

(VEN) - Growing cooperation in production and supply development between domestic and foreign-invested enterprises (FDI) not only improves the competitiveness of domestic enterprises, but also helps them accumulate experience and master technologies for sustainable development.

Recorded results

Nhat Nam Mechanical Co. Ltd (Dong Nai Province), with its motto “Japanese Technical Engineering, Vietnamese Hands”, aims to become a closed unit of research, design, and production. The company's products are mainly exported to the US (40 percent), to Japan (30 percent), Australia (20 percent). Some 10 percent are sold domestically.

General Director of Nhat Nam Mechanical Co, Ltd Tran Quy said there is still room for development of mechanical engineering products and auxiliary equipment. Cooperation with foreign partners in general, and Japanese enterprises specifically, has yielded more development opportunities for the company.

At the Thanh Phu Industrial Park (Dong Nai Province), GSB Steel Structure Joint Stock Company recently cooperated strategically with NS BlueScope Lysaght Vietnam Co., Ltd (a member of Australia's largest steel manufacturer BlueScope Steel Limited). The cooperation is expected to provide the best choices to customers across Vietnam for green and energy saving-oriented development.

So far, foreign investors such as Honda and Samsung have pulled Vietnamese enterprises into their value chains. Since 2015, Samsung has been offering consulting programs to improve the production and quality of Vietnamese manufacturers, and also trained Vietnamese consultants to advise on production improvement for Vietnamese enterprises. By late 2021, Samsung had provided consultancy to 379 businesses, contributing to a rapid increase in the number of the group’s Vietnamese suppliers.

Many provinces and cities have also coordinated to promote cooperation with FDI enterprises from Japan, the Republic of Korea, and Chinese Taipei to develop support industries. Various Vietnamese businesses have also participated in exchange and connection programs with foreign business associations to seek customers. This effort not only serves export but also promotes the manufacturing of supporting industrial products for foreign investors in Vietnam.

Sustainable cooperation

A recent report submitted to the government by the Ministry of Planning and Investment (MPI) showed that the link between the FDI sector and domestic enterprises is still a major limitation in attracting and using FDI capital. Vietnam’s average localization rate has only reached 20 to 25 percent, with the garment and footwear achieving 40-45 percent of localization, household electronics 30-35 percent but personal car assembly only 7-10 percent.

Many domestic enterprises are suppliers of FDI enterprises

The draft strategy on Foreign Investment Cooperation for the period 2021-2030 outlined by the MPI underlines key focuses and harmony between attracting large and small investors, with priorities given to connecting production chains and global supply, attracting green investment, high technologies, core technology and auxiliary technology. Adequate investment incentive policies are also being formulated as part of this strategy.

For its part, the Ministry of Industry and Trade (MoIT) will strengthen close connections with multinational FDI enterprises, such as Samsung and Toyota, seek capable domestic enterprises producing raw materials and accessories to replace imports in the short and long term. The MoIT is determined to bolster support industries according to the approved Supporting Industry Development Program in a number of key industries, among them automobiles, electronics, textiles, and footwear. It also strives to enable participation of domestic enterprises in foreign-invested projects and supply chains in order to effectively exploit Vietnam’s global integration process.

Ngoc Thao