Supporting industries are no longer simply auxiliary manufacturing sectors. They have become the foundation for enhancing industrial self-reliance, increasing localisation, improving competitiveness and enabling businesses to integrate more deeply into regional and global supply chains.
Policies are needed to boost the number of domestic enterprises participating in the supply chain of multinational companies, and a boost is necessary in the localisation rate of the processing and manufacturing industry, which now remain modest, insiders said.
Under a strategy to develop garments, textiles and footwear by 2030 with a vision to 2035, Vietnam aims to gain 38-39 billion USD in export turnover from leather and footwear products by 2030.
Vietnamese firms in the mechanical engineering outsourcing sector have low competitiveness when joining global supply chains largely due to their small scale, technological shortages, and low productivity.
The automobile industry of Vietnam has witnessed progress in the last two years, but the localisation rate (local part supply) still remains low, not meeting the set target, according to a Ministry of Industry and Trade (MoIT) report sent to the National Assembly for discussion and direction.
The Vietnamese Government highly appreciated investors from the Republic of Korea (RoK), including Samsung, for their efforts towards maintaining the RoK’s position as the largest foreign investor in Vietnam for many years, said Deputy Prime Minister Trinh Dinh Dung.
Japanese businesses have been working with Vietnamese partners in technology transfer and equipment manufacturing, as well as increasing investments in precision mechanics.
Vietnam sets a target of earning between 19.5 - 20 billion USD from leather and footwear exports in 2018, up 10 percent from 2017, heard a conference in January 12.
Samsung Vietnam has achieved a significant breakthrough in increasing the localisation rate of its products from 35 percent in 2014 to 57 percent at present.
The localisation rate in Vietnam - the percentage of a product locally made - is too low as the number of Vietnamese part supplying businesses accounted for only three percent of the country’s total.
