On-site processing: An advantage that helps supporting industries increase competitiveness

The development of supporting industries is considered the "key" to increasing production capacity, reducing import dependence and enhancing the position of Vietnamese enterprises in the supply chain. In order to further analyze the role and direction of enterprises in this field, a reporter from the Industry and Trade Newspaper talked with Mr. Hoang Van Hung, Director of Kansai Industrial Joint Stock Company on the sidelines of the Vietnam Industry and Technology Week 2025.

Great potential of supporting businesses

- How do you evaluate the development potential of Vietnamese enterprises in the supporting industry sector, especially products with specialized technical characteristics?

Mr. Hoang Van Hung: In my opinion, the development potential of Vietnamese enterprises in the supporting industry sector is huge, especially for products requiring high technology. The first reason lies in the strong shift of domestic manufacturing industries. From steel, food, chemicals to manufacturing, the demand for specialized components is increasing rapidly and continuously expanding. Vietnamese enterprises have the advantage of flexible response, understanding the domestic market and being able to shorten delivery time compared to imported goods. For items that only need small changes in angle or flow to become a new product code, on-site processing capacity is a very significant advantage.

*Mr. Hoang Van Hung, Director of Kansai Industrial Joint Stock Company, talked with reporters of Cong Thuong Newspaper on the sidelines of Vietnam Industry and Technology Week 2025. Photo: Thanh Tuan*

Another important factor comes from product quality. Currently, many Vietnamese enterprises are fully capable of producing high-precision components, equivalent to Japanese or American products but at lower prices. This creates real competitiveness in the market and increases opportunities for domestic enterprises to participate more deeply in the supply chain. Many large corporations in Vietnam have trusted in using domestic products such as THACO or some steel and railway units. This is clear evidence that Vietnamese enterprises are fully capable of meeting international standards.

In addition, the formation of a mature technical team from foreign enterprises is also the foundation for domestic enterprises to develop sustainably. They understand standards, processes and know how to maintain stable quality. This is an especially important factor in fields that are specific and require high meticulousness.

If there is more effective connection between small businesses and support programs from the State and leading corporations, I believe that Vietnam's supporting industry will develop even more strongly, not only stopping at the domestic market but also being able to gradually expand to the international market in advantageous niche fields.

Solving the "connectivity problem" for small businesses

- In the process of participating in the supply chain of large corporations, what difficulties are small businesses like Kansai facing in terms of connection, procedures or access to government support programs, sir?

Mr. Hoang Van Hung: In my experience, small businesses like Kansai face many difficulties when participating in the supply chain of large corporations, not only in production capacity but also in connection and procedures. On paper, there are many programs and support packages mentioned, but for a family-sized business with few employees like us to access them is not a simple matter. Information is often scattered across many channels, without anyone to guide each step, so most small businesses only hear about it but do not know where to start.

Regarding procedures, the biggest difficulty is the documents and conditions. Many programs require a very systematic revenue scale, number of employees, management standards, and paperwork system, while small businesses often focus all their efforts on production and do not have a specialized department to follow these procedures. To borrow preferential loans, you must also have collateral and a good financial report, while the nature of the processing industry is low capital, not many machinery assets, and cash flow is based on orders. Therefore, although there are many incentives, in reality, it is very difficult to get your hands on those incentives.

On-site processing capabilities help supporting industrial enterprises proactively source components, improve quality and accelerate participation in the supply chains of large corporations. Photo: Thanh Tuan

When it comes to connecting with large corporations, small businesses are often in a passive position. We rely heavily on relationships and technical reputation accumulated through each order; there are very few official channels to introduce, evaluate and then list potential suppliers. Fairs and exhibitions like this one are very valuable occasions, but they only stop at the initial meeting step. If there were deeper connection mechanisms, intermediary units to guarantee technical aspects and support small businesses to complete documents and procedures to participate in State programs and supply chains of large corporations, the effectiveness would be much more substantial.

- From your many years of experience in the industry, what do you think is the key factor that helps Vietnamese supporting industry enterprises improve their capacity and participate more deeply in domestic and international supply chains?

Mr. Hoang Van Hung: In my opinion, the first key factor is people and professional thinking. The supporting industry is a very specific field, requiring meticulousness, patience and a spirit of continuous learning. If the technical team does not really understand the product, does not grasp the operating principles of the system they are processing parts, it will be very difficult to meet the requirements of large corporations. Enterprises must build a core group of human resources, knowledgeable about both technology and customer requirements, and ready to communicate directly with partner engineers in the same professional language.

The second factor is discipline in quality and progress. Supporting industry enterprises that want to go far cannot do things on a whim. Every detail provided to customers must be highly stable, repeatable, and have clear management records. Once in the supply chain of large corporations, on-time delivery, meeting exact technical specifications, and quickly handling arising errors are mandatory. If they can do this consistently, the enterprise will build up its reputation and gradually be assigned more difficult orders with higher technical content.

Finally, the ability to be flexible and proactive in upgrading technology. The characteristic of supporting industries is that just changing a spray angle, a flow rate or a small detail will create a different product code. Enterprises must have an optimization mindset, invest in machinery at a reasonable level but know how to exploit full capacity, and proactively learn technology from foreign partners. When Vietnamese enterprises can prove that they can make products equivalent to imported goods, with better prices and faster delivery times, the "door" to participate more deeply in the domestic and international supply chain will be much more open.

Thank you!

The supporting industry can only grow when Vietnamese enterprises maintain quality discipline, continuously innovate technology and form a team of in-depth technicians. The initiative of enterprises together with effective connection mechanisms will create a foundation for enterprises to participate more deeply in the global value chain.

Source: https://congthuong.vn/gia-cong-tai-cho-loi-the-giup-cong-nghiep-ho-tro-tang-suc-canh-tranh-430654.html