The southern province of Dong Nai has reviewed support industries for spearhead industrial sectors, in addition to high-tech industry (Illustrative photo: VNA) HCM City (VNA) - The southern provinceof Dong Nai has reviewed support industries for spearhead industrial sectors, inaddition to high-tech industry.
Both sectors are able to generate high added valueand accelerate the industrial restructuring. The modernisation of devices andproduction technology, along with market expansion in line with joining globalsupply chains, are therefore necessary, according to insiders.
Dong Nai is home to more than 600 companies insupport industries, primarily in garments and textiles, footwear, electronics,and mechanical engineering.
The province’s industrial production value insupport industries this year has surpassed 130 billion VND (5.6 million USD), orsome 23 percent of its total industrial value, according to a representative fromthe provincial Department of Industry and Trade.
Local firms in the sector, however, are stillstruggling because of limits in capital, technology, human resources, andskills.
For example, the Tuong Lai company in Long Thanhdistrict, which specialises in rubber and plastic spare parts for theautomotive industry, is facing a severe shortage of materials as it heavily dependson imports, which have been disrupted by the COVID-19 pandemic.
Meanwhile, the Huynh Duc private trade-services companyin Bien Hoa city recently channelled about 18 billion VND into new equipmentand faces ongoing difficulties in capital mobilisation, its Director Pham NhatDuy said.
Vice head of the Management Board of Dong NaiIndustrial Parks Pham Van Cuong said support industries possess huge room forgrowth.
Of particular note, along with strategic policies fromthe Government, businesses are also advised to renew equipment and technologies,and increase production capacity to take further part in global supply chains tocreate high-quality products sold at competitive prices.
In the time to come, Dong Nai is projected towelcome more FDI enterprises seeking material suppliers, which will help raisethe localisation rate. This is deemed a major opportunity for companies in supportindustries to join global supply chains, Cuong added.
In response, local companies have plans to build newfactories, install modern machinery, and increase the number of skilledworkers.
Vietnamese enterprises are to be able to producehighly-competitive support products, meeting 45 percent of essential needs fordomestic production and consumption and accounting for about 11 percent ofindustrial production value by 2025.
About 1,000 enterprises are to be capable of directsupply to assembly enterprises and multinational corporations, with domesticenterprises to account for about 30 percent by 2025.
Vietnam has taken measures toimprove the capacity of its support industries to see that domestic enterpriseseffectively participate in global value chains.
Considered the backbone of the economy,manufacturing is a key driver of growth in the national industrial sector. Withaverage annual growth of 10.6 per cent, and 4.96 percent in the first half of2020, manufacturing is a “bright spot” in Vietnam’s industrial sector in thecontext of the global economic downturn due to COVID-19.
Manufacturing is also a magnet for FDI. Of3,478 new FDI projects nationwide last year, manufacturing accounted for thehighest proportion, with 21.6 billion USD, or 67.8 percent of total registeredinvestment capital.
If the manufacturing industry was to be viewedas a house, support industries can be compared to its foundations. Developing support industries will help boost the country’s sustainable economicdevelopment.
By 2030, support products are to meet 70 percent ofdemand and account for about 14 percent of industrial production value. Some2,000 companies are to be capable of supplying directly to assemblers andmultinational corporations by 2030.
Vietnam recently put intooperation a database of local processing, manufacturing, and support industries, with the aim of facilitatingconnections between Vietnamese suppliers and multinational corporations./.
