So far, high-tech industries have recorded the lowest localisation rates, accounting for only 15-20 percent of product prices. Therefore, more policies are needed to encourage investment and development in this segment, the Vietnam Economic News reported.

According to head of the Saigon Hi-Tech Park (SHTP) management board Le Hoai Quoc, the localisation rates in new industrial products account for only 20 percent and the remainder depends on imported materials. Take the electricity – electronics sector which is growing strongly in Ho Chi Minh City for example, although the localisation rates increase but account for only 20-30 percent, which remains too low compared with requirements. Operating electronic enterprises in Vietnam mainly deal with assembling and integrating accessories and parts to make products based on imported basic electronic parts like circuit boards and transistor components.

General Director of Intel Products Vietnam Sherry Boger said Intel has become one of the investors that have the biggest export revenue in the SHTP. However, until 2013, the localisation rate of this group only reached 10 percent, equal to about 11 million USD. Even though the group wants to increase this rate but the capabilities of Vietnamese enterprises to meet Intel’s requirements remain quite modest.

Like Intel Group, Director of the Japan External Trade Organization (JETRO) in Ho Chi Minh City Kazuhiko Osato said in 2013 Japan undertook over 500 projects in Vietnam with total capital of nearly 6 billion USD but unfortunately, the Vietnam’s localisation rate for Japanese enterprises have not reached 32 percent yet, equal to half of the rates of China and Thailand.

Deputy head of SHTP management board Le Bich Loan said the high-tech enterprises in SHTP have been aware of the importance of localisation and given more priorities to seeking domestic partners.

However, material sources for localisation are mainly to make simple products like packaging and plastic trays. Vietnamese enterprises have not been capable to produce high tech demanding electronic spare parts like transistor components or electronic mechanical parts.

Vietnamese enterprises are just at the stage of doing research or piloting production on small scales like wafer FRED of the SHTP’s R&D Centre or pressure sensors jointly produced by SHTP and Vietnam National University Integrated Circuit Design Research and Education Centre (ICDREC).

According to Director of the Ho Chi Minh City Investment and Trade Promotion Centre (ITPC) Pho Nam Phuong, apart from current preferential treatments for enterprises working in the support industry, the city has asked relevant departments and sectors, including the SHTP management board to study and offer better preferential packages regarding tax, infrastructure and training workforce to encourage domestic enterprises join the support industry.

In terms of infrastructure, preferential policies on land lease need to be adopted. In pieces of land where no infrastructure has been built, the land lease rentals should be calculated like those levels in the High-tech Park in District 9: from 12,300-18,500 VND/sq.m a year. As for pieces of land with infrastructure: from 17,200-26,000 VND/sq.m a year and workshop rentals from 4-5 USD/sq.m a year depending on different locations.-VNA