Representatives of Reed Tradex, JETRO and ITPC (from left to right) at the contract signing ceremony.  — Photo laodong.com.vn

Nguyen Van Tuan, deputy director of the Investment and Trade Promotion Centre (ITPC) of HCM City, said support industries have much room to develop since they are in their infancy.

HCM City considers their development one of its key tasks in the upcoming time, he said.

Hirotaka Yasusumi, managing director of the Japan External Trade Organisation (JETRO)'s HCM City office, said "the investment by Japanese companies in Viet Nam is still full of vigour and vim", accounting for 26 per cent of total foreign investment last year, but the main problem for Japanese firms is the difficulty in procuring parts.

According to a JETRO survey, local procurement of industrial materials and sub-components by Japanese companies in Viet Nam is only 32 per cent, compared to 64 per cent in China and 53 per cent in Thailand, he said citing a few examples.

Bui Quang Hai, deputy chairman of the HCM City Association of Mechanical Engineering, said the country's exports of electronic products, computers, and telephones have surged in recent years, but import of components for them has increased sharply too.

Many firms admit that their production depends too much on import of inputs, he said.

With multinationals following an outsourcing strategy based on the China plus 1 (Thailand, Indonesia, Viet Nam) model, Viet Nam should focus on improving the competitiveness of its mechanical engineering industry to take part further in the global supply chain.

Japan has promised support for strengthening Viet Nam's supporting industries, he pointed out.

Yasusumi said: "We are now working on a new scheme in which private companies and government departments co-operate to work for the development of support industries.

"We are aiming to identify and satisfy companies' potential needs through business matching events, seminars, and personnel training to make a proposal to the government for policies for support industries.

"In order not to fall into the middle-income trap Viet Nam needs technical innovation, and so we promote technology transfer to Vietnamese companies by furthering human resource development and creating a close relationship between Japanese and Vietnamese companies."

Duangdej Yuaikwamdee, deputy managing director of Thai-owned Reed Tradex Co Ltd, said Viet Nam is a highly attractive investment destination for international manufacturers including those in support industries.

Finding the right partners to do business with would also help Viet Nam's industries become strong and profitable in the long run, he said.

Yasusumi said since most Vietnamese companies involved in the supporting industries are small and medium sized, they need Government support in terms of personnel training and funding.

The forum was organised by the ITPC, JETRO, and Reed Tradex. — VNS