MoIT helps enterprises connect with multinational corporations

Advantages and challenges

According to the Ministry of Industry and Trade (MoIT), as supporting industry grows, the localization rate has increased in many industries, such as textile, garment and footwear industries reaching 45 to 50 percent, and mechanical engineering exceeding 30 percent.

Domestic supporting industry enterprises have become direct suppliers to multinational corporations

Domestic supporting industry enterprises have improved their production capabilities and become direct suppliers to manufacturers, assemblers of finished products and multinational corporations globally. Processed and manufactured products, including those in supporting industries, are contributing more to the country’s total export revenue.

A report by the Vietnam Industry Agency (VIA) under the MoIT shows that, to date, Vietnamese enterprises have produced a series of planting and harvesting machines, contributing to improving the mechanization level in agricultural production. Over 90 percent of rice milling, polishing machines, and dryers manufactured by domestic enterprises have reached advanced technology levels and exported to ASEAN, American, and African countries.

Particularly, regarding manufacturing of bicycle and motorbike components, standard mechanical components, plastic-rubber components, and more, Vietnamese enterprises have met most of the domestic and export demand.

In the electronics sector, the number of tier 1-2 supplying enterprises in Samsung’s production chain increased from 25 in 2014 to 306 enterprises in late 2023.

Urgent and specific solutions needed

To tackle limitations and ease difficulties during the implementation of policies on supporting industry, the MoIT has coordinated with ministries, sectors, localities and enterprises to implement the following specific solutions:

The MoIT has advised the Government with many policies to promote and develop supporting industries, and improve the capability of supporting industry enterprises. In addition, the ministry supported Vietnamese enterprises by connecting them with multinational corporations so that they could seek business opportunities in the supply chain of these corporations in Vietnam as well as abroad.

Pham Tuan Anh, Deputy Director of the VIA, said that Vietnam needs to create a market for supporting industries by developing downstream industries, attracting multinational corporations’ investment in large-scale projects in Vietnam; gradually expanding to foreign markets to take advantage of signed FTAs, implementing policies to encourage the use of domestic supporting industry and mechanical industry products, associated with developing prioritized industries, such as automobiles, agricultural mechanics, and railways.