Local firms urged to join global value chain

Friday, Oct 30, 2015 08:28

"Demand for support industry development in Viet Nam has been big as FDI inflows into the country has been on the rise,"  Nguyen Mai  said.

HA NOI (Biz Hub) — Vietnamese enterprises have a big opportunity to enter the global value chain with several investors entering the country, Nguyen Mai, chairman of Viet Nam Association of Foreign Invested Enterprises said.

Mai told the conference on connecting supply chain for support products held in Ha Noi yesterday that several international big groups such as Samsung, Intel, LG, Canon and Microsoft – Nokia expected to see Vietnamese companies joining their production chain and becoming their vendors.

For example, Samsung Electronics Viet Nam wanted to co-operate with local firms to provide spare parts for their production.

"Demand for support industry development in Viet Nam has been big as FDI inflows into the country has been on the rise," he said.

Statistics from the Foreign Investment Agency showed that foreign direct investment (FDI) worth US$19.2 billion poured into Viet Nam in the first 10 months of the year, posting year-on-year 40 per cent increase.

He forecast that a new wave of high quality FDI inflow would come into Viet Nam from the Organisation for Economic Co-operation and Development (OECD), especially from the United States after the Trans-Pacific Partnership (TPP) takes effects.

He asked Vietnamese companies to be confident while investing in modern technologies and taking advantage of the government's preferential policies.

Truong Thanh Hoai, director of the Ministry of Industry and Trade's Heavy Industry Department, said the ministry has completed a draft decree on supporting industry development which they will be submitting to the government for consideration. The decree is expected to issue in the middle of next month.

He said the most difficulties for Vietnamese businesses in co-operation with global groups in the support industry was with regard to limited capacity and technology with low competitiveness and dependency on imported material.

Most of the domestic firms have produced simple products with low technology while big groups required three criteria of stable quantity, on-time delivery and suitable prices to join into their production chain.

Sharing the ideas, Luu Hoang Long, chairman of the Viet Nam Electronics Industries Association said Viet Nam's electronics industry has low added value despite increasing export turnover in the past few years.

The sector's exports have surpassed that of crude oil since 2012, becoming Viet Nam's key export staples.

"The electronics sector has largely depended on contributions from FDI enterprises," Long said, adding that the firms accounted for over 80 per cent of local market and 90 per cent of export turnover, though the number of the companies was one-third of the total.

He suggested that Viet Nam should increase supply of spare parts for FDI producers, thus increasing added value and GDP.

The government should create a consumption market for local support industry producers. The ministry should clarify on the list of support industry products which Vietnamese businesses could have advantages for development and provide them with support policies. — VNS

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