Cooperation in the development of supporting industries with Japan: Mutual benefits

VCN - Japan continues to be one of Vietnam's leading economic partners, especially in supporting industries. This connection is expected to boost the export of supporting industry products to the Japanese market.
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Vietnamese supporting industry enterprises need connection opportunities to increase exports to international markets. Photo: NV
Vietnamese supporting industry enterprises need connection opportunities to increase exports to international markets. Photo: NV

Motivation for cooperation

Over the years, Vietnam's supporting industry enterprises have grown in quantity and quality, improved their production capacity, and become increasingly involved in the global production chain. As a result, the number of enterprises operating in the supporting industry accounts for nearly 4.5% of the total enterprises in the processing and manufacturing industry. Production and business revenue reached more than 900,000 billion VND, contributing nearly 11% of the total revenue of the whole processing and manufacturing industry.

Although many components, finished products and semi-finished products of Vietnam have met domestic demand and been exported to many countries around the world, including Japan, the number of Vietnamese enterprises becoming a supplier of supporting industrial products for Japanese enterprises is limited.

Meanwhile, Japan is Vietnam's major trading partner, with a total import-export turnover of about US $43 billion in 2021. In addition, Japan is the second investor among countries and territories investing in Vietnam, with more than 4,300 projects with a total registered capital of nearly US $ 60 billion.

In particular, to develop cooperative relations between the two countries in the industrial field, the Prime Minister approved Vietnam's industrialization strategy within the framework of Vietnam-Japan cooperation towards 2020, vision to 2030. The strategy was developed and implemented with the active support of the Japanese Embassy in Vietnam, the Japanese Ministry of Economy and Industry, the Japan International Cooperation Agency (JICA) and many other Japanese agencies based on consulting businesses and scientists. The overall objective of the strategy is to promote technological innovation, increase labour productivity, build international competitiveness, have products with high added value, have a spillover effect, and achieve international standards advanced quality standards in the export and domestic consumption market.

Seizing opportunities actively

The domestic supporting industry business community has actively increased trade promotion and investment cooperation with businesses from Japan.

Typically, right after Vietnam reopened its economy after the Covid-19 pandemic was basically under control in early 2022, Japan's Onaga Company invested in building a chain of factories for manufacturing components of aircraft, aviation, shinkansen, automobiles, ships, agriculture and fishery, automated robots, etc. in Hanoi South Supporting Industrial Park (HANSSIP). This is an enterprise with an age of over fifty years in Japan, a manufacturer and supplier of products and components for corporations such as Boeing, Airbus… The project is being urgently built and implemented as planned in the second quarter of 2023.

The official investment by Onaga Company in HANSSIP Industrial Park has concretized the cooperation agreement signed on November 25, 2021, in Tokyo between N&G Group - Vietnam and Onaga Company - Japan (representative of the business group in Kobe) in the presence of Prime Minister Pham Minh Chinh and Japanese officials. According to the signed cooperation content, N&G Group will support all procedures related to investment and construction permits; import machinery and equipment already in use in Japan to move to Vietnam; support recruitment and training of workers according to Japanese standards right at the Vietnam Supporting Industries Vocational Institute (VSI) in the form of "non-profit".

In addition, the Hanoi Supporting Industry Business Association (HANSIBA), with N&G Group and Kobe Japan Manufacturers Association have also established a Vietnam Supporting Industry Development - Investment - Consulting Company – Japan (VI-JA CID). This company will initially cooperate in transfer, consulting technology and management, supplying export components for dozens of supporting industry enterprises in Hanoi.

From the success of a Japanese enterprise going ahead, recently, Kobe Japan's business delegation also came to survey and plan together with HANSIBA member enterprises to invest and together rush to complete the first chain of the factory in the second quarter of 2023, promptly joined the production chain of Japan and the world.

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It can be seen that the connection and trade cooperation between businesses will be good opportunities for Vietnamese enterprises to find potential customers and promote the export of supporting industrial products; at the same time, helping Japanese businesses have "good land" to expand investment, cooperation and international links. This will enhance the supporting industry's role and position in the spirit of Resolution No. 23-NQ/TW dated March 22, 2018, of the Politburo on orientations for formulating public development policies. National industry to 2030, vision to 2045.

By Huongdiu/Quynhlan

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