New push to link local support industries with multinationals

Enterprises have taken the initiative in technology innovation to improve productivity

The two-year program will help domestic suppliers meet requirements of multinational corporations in terms of quality, prices and delivery, as well as connect with partners.

The project is sponsored by the Ministry of Industry and Trade’s Industrial Department and the International Finance Corporation, a member of the World Bank.

The program will partner with eight multinational corporations in the fields of automobiles, electronics, energy and consumer goods, including Bosch, Canon, Datalogic, Denso, Ford, General Electric, Panasonic and Toyota. Some 45 domestic enterprises recommended by multinational corporations and trade associations have been chosen to join the program.

These enterprises have taken the initiative in technology innovation and increased connectivity in recent years to improve productivity and product quality and join global supply chains. A number of enterprises have invested in precision engineering projects totaling more than VND1 trillion in Ho Chi Minh City’s Saigon High-tech Park (SHTP).

Targeted programs

With the cooperation of industrial enterprises and state support, localities have implemented a series of other programs and activities to facilitate access of small to medium-sized enterprises (SMEs) and suppliers to the support industry sector. Notable programs include the Sustaining Competitive and Responsible Enterprises (SCORE) program designed to help SMEs improve productivity and product quality, a Good Supplier Development program, and forging hundreds of direct connections between domestic enterprises and foreign-invested businesses in order to find market for products.

The People’s Committee of the capital Hanoi has approved a project for support industry development in 2017-2020, with a vision to 2025. The city has set a target of having 900 professional support industry enterprises by 2020, including 40 enterprises with international standard production systems and products, capable of participating in multinational corporations’ global production networks.

A representative of the Truong Hai Auto Joint Stock Company (Thaco) said Thaco has 13 satellite factories, which provide components for Thaco producers in addition to supplying products for non-Thaco manufacturers in Vietnam. Connectivity and cooperation must be strengthened, he said, and information channels including websites, must be developed to enable support industry enterprises to easily search for development opportunities and connect with other businesses.

The Minh Nguyen Support Industry Joint Stock Company has joined the Good Supplier Development program. The company has procured advanced equipment and technology worth VND1.6 trillion to produce high-tech products. The company has become a level-1 electronic component supplier of the Republic of Korea’s Samsung Group. The total number of Samsung suppliers has increased to 308 vendors, with the number of tier-1 vendors up from only four in 2014 to 29 in 2017.

Ho Chi Minh City ranks first nationwide in terms of the number of support industry enterprises. The city has built databases of more than 500 support industry companies. Hanoi is attracting investment in and developing support industries through a program for forming satellite businesses and promoting cooperation and connectivity between local support industry enterprises and assemblers, multinational corporations and foreign invested enterprises.