VN desires to attract new wave of investment from RoK
Deputy Director of the Vietnam Industry Agency Pham Tuan Anh
At the seminar ‘Resolving difficulties, increasing support for supporting industries’ today held in Hanoi, Deputy Director of the Vietnam Industry Agency under the Ministry of Industry and Trade Pham Tuan Anh said that about 5,000 supporting industry enterprises across the country currently are providing supporting industry products such as electric cables, gearboxes, plastic components to export to main export markets including Korea, Japan, China, the US.
Deputy Director Pham Tuan Anh also informed that about 100 Vietnamese businesses are currently first-grade suppliers for multinational corporations while about 700 businesses are working as level 2 and level 3 suppliers.
In particular, about 50 businesses in the electronics field are presently level 1 suppliers, about 170 businesses are second-grade suppliers for Samsung Group, and about 12 mechanical engineering - automobiles businesses are supplying devices for Toyota. He revealed there will about to be a wave of new investment into Vietnam.
The localization rate of supporting industry products has improved significantly in recent times. Specifically, the localization rate in the fields of textiles, garments and footwear is about 45 - 50 percent while it is 15 - 20 percent and 5 - 20 percent in the mechanical manufacturing field and the automobile manufacturing and assembly respectively. Some products such as trucks and passenger cars see this localization rate higher.
Referring to the potential and future picture of supporting industries in Vietnam, Mr. Tuan Anh commented that large corporations and manufacturers tend to move to countries with political stability for long-term production.
With a stable political situation and an abundant young workforce, Vietnam has the opportunity to receive the investment shift trend of industries such as high-tech and semiconductor.
During the official visits of the leaders of Vietnam and the United States, there were hints that US investors would invest in Vietnam. During a recent business trip to the United States, Prime Minister Pham Minh Chinh witnessed signings between Vietnamese organizations and businesses with leading US semiconductor chip manufacturing corporations.
There are good signs and great opportunities, but Mr. Pham Tuan Anh said that there are still many challenges and bottlenecks in infrastructure and capacity to support industry enterprises.
According to him, when a foreign business invests in Vietnam, they really need capable domestic satellite businesses to provide products for them, helping to reduce many costs in the production process but Vietnamese businesses can’t provide what they need, that’s the country’s weakness, Mr. Pham Tuan Anh said.
Mr. Pham Tuan Anh said that to overcome such difficulties, the Ministry of Industry and Trade has a policy of working with other ministries and agencies to build industry-linked industrial zones and clusters, attracting at least one leading enterprise to invest with the expectation to pull in supporting industry enterprises; thereby, reducing production costs and increasing the advantages of supporting industry enterprises.
The Government’s Decree No. 111/2015/ND-CP on supporting industry development has been issued for 8 years and needs to be supplemented and edited. The draft decree amending Decree 111/2015/ND-CP has raised the core point of providing interest rate support for enterprises producing supporting industrial products. Despite some concerns about this proposal, the Ministry of Industry and Trade announced the state's support for businesses in the early stages of the production process is to nurture revenue sources.
By Van Phuc – Translated By Dan Thuy