Self-sufficiency in raw materials and components: The foundation for developing supporting industries

Efforts to innovate and enhance the value of industrial products

According to the Department of Industry (Ministry of Industry and Trade), the supporting industry is still not self-sufficient in production inputs, leading to a large dependence on imported components and raw materials. The trade deficit in production inputs has been a long-standing situation for many years, causing the added value of domestic industries to be very low.

Self-sufficiency in domestic raw materials and components is a core issue, creating a foundation for the supporting industry to develop sustainably and enhance national competitiveness. Photo: TT

The Department of Industry pointed out that in recent years, manufacturing and processing industries have accounted for a high proportion of nearly 40% of the total net revenue from production and business of the economy, but only contributed about 14% of GDP (very low added value compared to other industries).

The above weaknesses not only affect production development and economic growth in the short term, but will continue to affect industry in particular and the Vietnamese economy in general in the long term in the context of increasingly deep international integration. "Therefore, developing supporting industries, gradually self-sufficient in domestic raw materials and components is one of the core issues for sustainable development of Vietnamese industry in the long term" - the representative of the Department of Industry emphasized.

As one of the enterprises with sufficient capacity and production scale to supply products to end-user enterprises, Do Phuoc Tong, Chairman of the Board of Members of Duy Khanh Mechanical Company Limited, said that in order to meet customer demand, the company had to invest nearly 200 billion VND to equip a new production line. Participating in the supply chain has created motivation for the enterprise to change, catch up with the scale and needs of its partners.

Not stopping there, the company has upgraded the entire production line of products such as: Motors, pumps, hand tools, sewing machines, motion controllers in cars..., ensuring standard supply for: Toshiba Industry, Rinnai, MK Seiko, Bonfiglioli, Thermtrol, Sanei Technology, USM Health Care...

“Thanks to the new technological line, the company can research and manufacture new products according to market demand instead of processing as before. From there, it enhances the value and position of the company's products. This is also the foundation for the company to improve its ranking in the global supply chain,” Mr. Do Phuoc Tong shared.

At Dien Quang, participating in the supporting industrial supply chain in both roles, as a supplier and a buyer, the company has had to continuously invest on a large scale in machinery and equipment lines to open up development opportunities.

The representative of Dien Quang Group's leadership also said that to get orders, the company has invested in modern, synchronous production lines such as LED Chip factory, electronic circuit board factory, OEM and ODM product assembly production...

Accordingly, the company also focuses on researching and developing new products suitable for the market in 5 areas: lighting, smart control, household appliances, electrical equipment and solar energy.

Forming and developing domestic value chains

According to the Department of Industry, to develop supporting industries, gradually becoming self-sufficient in domestic raw materials and components is one of the core issues for sustainable development of Vietnamese industry.

Highlighting the solution, the Department of Industry stated that first of all, it is necessary to improve the capacity of supporting industrial enterprises; open up market opportunities for supporting industrial enterprises to become suppliers, participating in the supply chain of enterprises manufacturing and assembling final products.

According to the Ministry of Industry and Trade, to improve the capacity of supporting industry enterprises, the prerequisite is to have a developed domestic processing and manufacturing industry. This will open up market opportunities for supporting industry enterprises to become suppliers and participate in the supply chain of enterprises that manufacture and assemble final products.

It is necessary to enhance the autonomy of industry through developing supporting industries. Photo: Quang Ninh Newspaper

However, the state also needs to actively expand foreign markets for supporting industry enterprises, along with receiving technical processes and production skills from abroad to improve production capacity.

In addition, it is necessary to accelerate the construction of concentrated supporting industrial zones to create industry clusters; develop material industries to increase self-sufficiency in input materials for production, reducing dependence on imported sources. Accordingly, it will increase the added value and competitiveness of Vietnamese products and enterprises in the global value chain.

Ms. Truong Thi Chi Binh - General Secretary of the Vietnam Association of Supporting Industries (VASI) proposed that in the long term, the Government can issue the Law on Supporting Industries and the Law on Key Industrial Development to affirm the importance of this type of industry, thereby having specialized policies to promote industrial development, welcome investment flows and shift production from other countries.

Adding more comments, Dr. Nguyen Van Hoi - Director of the Institute for Strategy and Policy Research on Industry and Trade (Ministry of Industry and Trade) said that it is necessary to focus on attracting investment and developing production in the fields of processing and manufacturing, especially in fields applying high technology.

Along with that, it is necessary to enhance the autonomy of the industry through the development of supporting industries. Specifically, it is necessary to encourage all economic sectors to participate in investing in supporting industries; continuously improve mechanisms, policies, and make investment procedures more and more open to encourage investors, and at the same time have preferential policies to encourage and attract projects to produce supporting industrial products applying modern technology.

According to the Department of Industry, the Department is currently accelerating the construction of the Northern Industrial Development Support Center and the Southern Industrial Development Support Technical Center. These two centers play a role in supporting innovation and providing technical support to industrial enterprises, especially supporting enterprises. Support and encourage localities to build industrial innovation centers in localities with conditions for industrial development.

Duy Anh

Source: https://congthuong.vn/tu-chu-nguyen-lieu-linh-kien-nen-tang-phat-trien-cong-nghiep-ho-tro-387687.html