Industrial restructuring plan nearing completion

Priority should be given to key mechanical product development

Unstable growth

Deputy Minister of Industry and Trade Cao Quoc Hung said that over the past decade, Vietnamese industry has recorded major achievements, with production value increasing almost 3.5-fold, from VND340 trillion to VND1,170 trillion. Industry has become the biggest sector in terms of contribution to the state budget. The sector has contributed annually 31-32 percent and almost 90 percent to the country’s gross domestic product (GDP) and export revenue, respectively.

“Nevertheless, in recent years, Vietnam’s industrial growth has been on a downward trend, falling from an average of 14.3 percent per year in the 2006-2010 period to 10 percent in the 2011-2015 period; the industrial productivity growth was about 2.4 percent per year in 2006-2015, 1.5 percent lower than the country’s average. Vietnam currently ranks 101st among 143 countries in terms of per capita value added in the manufacturing and processing industry. These are worrisome issues, as Vietnam is just in its early stages of industrialization,” Deputy Minister Cao Quoc Hung said.

Director of the Ministry of Industry and Trade’s Planning Department, Duong Duy Hung, speaking at the seminar, pointed out 12 “bottlenecks” that make Vietnam’s industrial growth slow and unsustainable. He cited as an example key industries, especially export-oriented industries that have not been organized according to the value chain model. “Actually, the industrial sector has suffered a continuous trade deficit, with such industries as textile and garment, footwear and electronics being highly reliant on material imports,” Hung said.

Industrial restructuring

On November 8, 2016, the National Assembly issued Resolution 24/2016/QH14 - an industrial restructuring plan for the 2016-2020 period. The Ministry of Industry and Trade was assigned to prepare the plan for submission to the government in June 2017 for approval.

Nguyen Van Thu, President of the Vietnam Association of Mechanical Industry (VAMI), said priority should be given to rapid development of key mechanical industries and products with competitive advantages according to domestic and foreign market demands. The mechanical industry’s targets to 2025 are mechanical manufacturing accounting for 90-95 percent of the sector’s production capacity, satisfying at least 55-60 percent of the domestic market demand, and exporting 34-36 percent of its products.

Le Tien Truong, general director of the Vietnam National Textile and Garment Group (VINATEX), said Vietnam needs to renovate technology if the country is to increase its textile and garment productivity.

The director of the Ministry of Industry and Trade’s Planning Department, Duong Duy Hung, said the ministry will continue improving the plan for submission to the government, aiming to promote strong, effective industrial restructuring from now to 2020.