Positive transformation: Supporting industries take on new responsibility

To date, about 240 Vietnamese enterprises have participated in Samsung’s supply network; one enterprise has also engaged in production and assembly of high-end cars of BMW Group (Germany) right in Vietnam.

Thanks to economic and political advantages as well as a suitable location, Vietnam is becoming the destination of a series of upstream enterprises in the supply chains of high-tech industries and semiconductor chips... However, experts believe that, in order to participate more deeply in the global supply chain, the Vietnamese supporting industry sector needs to develop more extensively and intensively.

For example, the domestic supporting industry sector is still in the very low value-added segment in the chain, mainly focusing on a number of fields, such as textiles, footwear, wood processing and mechanics, while supporting industry products of high technology content, sophistication and complexity are still held by FDI enterprises.

Vietnam is becoming the destination of a series of upstream enterprises in the supply chains of high-tech industries and semiconductor chips

Furthermore, supporting industry enterprises have not paid appropriate attention to research and development; and still lack human resources for supporting industries...

According to Dr. Kieu Xuan Thuc, Rector of Hanoi University of Industry, currently the number of highly skilled workers in supporting industries is very limited compared to actual demand.

“To solve the human resource problem for the supporting industry sector, a connection is needed between training institutions, enterprises and society. It is necessary to build incentive mechanisms to link vocational training with the labor market,” Dr. Kieu Xuan Thuc said.

Currently, domestic supporting industry enterprises are mostly small and medium in size, which are short of capital and technology, and even need support in trade promotion and sales... Therefore, to improve the capacity of supporting industries, Vice Chairman of the Hanoi Supporting Industry Business Association (HANSIBA) Nguyen Van said that supporting industry enterprises are expecting a lot of support from mechanisms, policies and assistance from state management agencies.

Satisfied with the business investment environment in Vietnam, Nguyen Quoc Cuong, Director of Hanel Plastics Joint Stock Company, believes that more and more large corporations will come to help Vietnamese supporting industry enterprises. However, he also recommends that enterprises themselves must improve their technological level and readiness to produce products of high added value, thereby maintaining their stable positions in supply chains.

“The readiness level of an enterprise is its reputation and ability to meet partners’ requirements. For example, when customers only provide product samples and their ideas, a supporting industry enterprise can immediately respond by offering them product designs and manufacturing, even with extremely complex sets of components,” Cuong explained.

A representative of the VIA said that the Ministry of Industry and Trade (MoIT) has been closely coordinating with ministries, sectors, localities, international organizations and multinational corporations to support Vietnamese supporting industry enterprises to improve their capacity, and at the same time, the Ministry plays an important role in connecting enterprises in the supply chain.

Regarding market expansion, in addition to investment promotion, the VIA will coordinate with ministries and sectors to build industrial parks, clusters and areas for separate sectors, so that leading enterprises will make investments, attract supporting industry enterprises, thereby reducing product prices and increasing the advantages of Vietnamese supporting industry enterprises.

In particular, the MoIT will amend and complete legal policies, especially the Law on Key Industries to support supporting industry enterprises in the best way possible, including the amendment of Decree No.111/2015/ND-CP of the Government on the development of supporting industries, with the proposal to subsidize interest rates for enterprises producing supporting industry products; at the same time, expanding the list of supporting industry products, as well as supporting enterprises with many preferential mechanisms.