Supporting industrial enterprises have developed in both quantity and quality, improving their competitiveness and participating more deeply in domestic and global value chains. At the same time, the domestic production capacity of supporting industrial products has been enhanced, and the localization rate of some industries in Vietnam has improved.
The supporting industries are undergoing positive changes.
At the seminar themed "Overcoming difficulties and increasing support for supporting industries" organized by the Industry and Trade Magazine on September 22, 2023, Pham Tuan Anh, Deputy Director of the Industry Department, Ministry of Industry and Trade, stated that in recent times, the State's incentive policies and the efforts of businesses have brought positive results in the development of supporting industries.
Government incentive policies, along with the efforts of businesses, have yielded positive results in the development of supporting industries.
Supporting industrial enterprises have developed in both quantity and quality, improving their competitiveness and participating more deeply in domestic and global value chains. At the same time, the domestic production capacity of supporting industrial products has been enhanced, and the localization rate of some industries in Vietnam has improved.
To date, the country has approximately 5,000 supporting industry enterprises; their products are supplied sufficiently domestically and exported to South Korea, Japan, China, the United States, and other countries.
In particular, the number of businesses acting as Tier 1 suppliers for multinational corporations is approximately 100; the number of Tier 2 and Tier 3 suppliers is around 700. Notably, about 50 businesses are Tier 1 suppliers and 170 are Tier 2 suppliers to Samsung Group. In the automotive and mechanical engineering sector, about 12 businesses are Tier 1 suppliers to Toyota.
In addition, the localization rate of our supporting industrial products has also improved significantly in recent times. Specifically, in the textile and footwear sectors, the localization rate is approximately 45-50%; in the mechanical engineering sector, it reaches 15-20%; and in the automotive manufacturing and assembly sector, it is 5-20%, with even higher localization rates for some vehicle products such as trucks and buses.
Currently, Vietnamese supporting industry enterprises have become aware of the need to improve and enhance their capabilities through training for management teams and incorporating scientific and technological advancements into production processes to improve manufacturing – said Mr. Pham Tuan Anh.
Increase support to help supporting industry businesses seize opportunities.
Nevertheless, Vietnam's supporting industries are generally still quite young, with limited scale and capacity of supporting industry enterprises, and products still in the low value-added segment of the supply chain. Especially in the context of global difficulties and changes in supply chain policies across countries, many opportunities and challenges are emerging for Vietnamese supporting industry enterprises.
According to Mr. Pham Tuan Anh, global economic fluctuations have prompted some countries to intensify efforts to attract their corporations to return and invest, while others are seeking countries with stable political situations and favorable policies, such as Vietnam, for long-term production. Most recently, during official visits by leaders of Vietnam and the United States, there have been suggestions that US investors will invest more heavily in Vietnam.
Supporting industrial enterprises have developed in both quantity and quality.
Hanoi is aiming to establish 1,000 enterprises in the supporting industries sector by 2025, while also developing them in depth. To achieve this goal, according to Mr. Nguyen Van, Hanoi is focusing on implementing solutions including strengthening support for businesses to access loans; promoting trade activities and leveraging the advantages of FTAs; and enhancing human resource training and connecting with large enterprises to improve technological capabilities.
The Ministry of Industry and Trade will revise and improve policies and laws, especially developing a Law on Key Industries to best support supporting industry enterprises. At the same time, the Ministry will cooperate with large corporations such as Samsung and Toyota to support Vietnamese supporting industry enterprises in enhancing their capabilities through training and market expansion.
“In the public investment program for the period 2021-2024, the Ministry of Industry and Trade has been allocated funds to build two industrial development support centers in Hanoi and Ho Chi Minh City. We expect that once the infrastructure and functional apparatus are completed, the two centers will provide more support to businesses in the future,” Mr. Pham Tuan Anh shared.
PV
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