Despite consumers increasingly placing their trust in products made in Vietnam, a number of barriers are holding local products back on the domestic market, heard a seminar in Ho Chi Minh City on July 16.

Vice Minister of Industry and Trade Ho Thi Kim Thoa told participants that after five years of implementing Instruction 494/CT-TTg on the use of locally-produced materials and goods for State-funded projects, Vietnamese enterprises have increased the use of locally-manufactured goods, thus reducing their production and business costs.

According to the Vice Minister, the instruction contributed to reducing the trade deficit-export turnover ratio from 17.47 percent in 2010 to 10.16 percent in 2011, and achieving a trade surplus from 2012 onwards. It also helped to improve the competitiveness of Vietnamese goods.

In the first six months of 2015, the manufacturing and processing sector grew by 9.6 percent compared to the same period last year.

Huynh Dac Thang, Deputy Head of the Planning Department under the Ministry of Industry and Trade (MoIT), said the Instruction had helped boost the production of a number of new products to replace imported ones.

The instruction has been well implemented in State-run corporations and helped change investors’ attitudes towards domestically-produced goods.

The business community, however, pointed out a number of challenges faced in selling products and winning contracts.

According to Dinh Van Thanh, General Director of the Bach Khoa Mechanical And Refrigeration Engineering Company Limited, most enterprises which produce equipment for the entire beverage industry are too small in scale to be able to compete effectively with international contractors.

The quality and design of local products often does not meet investors’ requirements. In this regard, Thanh suggested that the country should remove technical barriers and create support policies to reduce the cost of technological transfers in a bid to improve Vietnamese products.

Meanwhile, Tran Tho Huy, General Director of the Thien Nam Elevator Joint Stock Company, said local manufacturers and suppliers still faced challenges in winning tenders given that many investors required goods to be of foreign origin.

Huynh Dac Thang emphasised that increasing the effectiveness of Instruction 494 in the future was key to increasing the country’s strengths and competitive edge.

In addition to enterprises’ efforts to improve the quality and diversify products, Thang said Government agencies would create a legal framework to promote and assist the development of local supporting, manufacturing and hi-tech industries.-VNA