Vietnamese and foreign entrepreneurs discussed ways to develop thecountry's support industries at a recent forum in Ho Chi Minh City.
NguyenVan Tuan, Deputy Director of the Investment and Trade Promotion Centre(ITPC) of HCM City, said support industries have much room to developsince they are in their infancy.
HCM City considers their development one of its key tasks in the upcoming time, he said.
HirotakaYasusumi, Managing Director of the Japan External Trade Organisation(JETRO)'s HCM City office, said "the investment by Japanese companies inVietnam is still full of vigour and vim", accounting for 26 percent oftotal foreign investment last year, but the main problem for Japanesefirms is the difficulty in procuring parts.
According to a JETROsurvey, local procurement of industrial materials and sub-components byJapanese companies in Vietnam is only 32 percent, compared to 64 percentin China and 53 percent in Thailand, he said citing a few examples.
BuiQuang Hai, Deputy Chairman of the HCM City Association of MechanicalEngineering, said the country's exports of electronic products,computers, and telephones have surged in recent years, but import ofcomponents for them has increased sharply too.
Many firms admit that their production depends too much on import of inputs, he said.
Withmultinationals following an outsourcing strategy based on the Chinaplus 1 (Thailand, Indonesia, Vietnam) model, Vietnam should focus onimproving the competitiveness of its mechanical engineering industry totake part further in the global supply chain.
Japan has promised support for strengthening Vietnam's supporting industries, he pointed out.
Yasusumisaid: "We are now working on a new scheme in which private companiesand government departments co-operate to work for the development ofsupport industries.
"We are aiming to identify and satisfycompanies' potential needs through business matching events, seminars,and personnel training to make a proposal to the government for policiesfor support industries.
"In order not to fall into themiddle-income trap Vietnam needs technical innovation, and so we promotetechnology transfer to Vietnamese companies by furthering humanresource development and creating a close relationship between Japaneseand Vietnamese companies."
Duangdej Yuaikwamdee, Deputy ManagingDirector of Thai-owned Reed Tradex Co Ltd, said Vietnam is a highlyattractive investment destination for international manufacturersincluding those in support industries.
Finding the right partnersto do business with would also help Vietnam's industries become strongand profitable in the long run, he said.
Yasusumi said since mostVietnamese companies involved in the supporting industries are smalland medium sized, they need Government support in terms of personneltraining and funding.
The forum was organised by the ITPC, JETRO, and Reed Tradex.-VNA