How to reduce pressure to import raw materials for industrial production?

VCN - Excessive dependence on imported raw materials has reduced the competitiveness of industrial production. Promoting the development of industries that produce input materials for other industries is one of the key considerations in industrial development in the coming period, in order to improve the autonomy and competitiveness of the entire industry.
Production depends heavily on imported materials, so Vietnamese industrial products currently lack competition, and added value is not high. Photo: N.Thanh
Production depends heavily on imported materials, so Vietnamese industrial products currently lack competition, and added value is not high. Photo: N.Thanh

Importing 94% means of production

The latest information from the Ministry of Industry and Trade shows that, in the first eight months of 2022, the import turnover of goods is estimated at US$246.84 billion, up 13.6% over the same period last year (in the same period last year, it increased by 34.4%).

Notably, in terms of the structure of imported goods, means of production accounted for 94%, up 0.1 percentage point over the same period last year (in which machinery, equipment, tools and spare parts accounted for 44.3%, the group of raw materials, fuel and materials accounted for 49.7%); consumer goods accounted for 6%, down 0.1 percentage point. China is still Vietnam's largest import market with an estimated turnover of US$81.8 billion, up 12.8% over the same period last year.

Referring to the dependence on imported raw materials in industrial production, Mr. Pham Tuan Anh, Deputy Director of the Department of Industry (Ministry of Industry and Trade) assessed that industry was a key export sector with steady growth over the years, but there were still many limitations, the internal strength of enterprises was very weak.

“Vietnam currently has no enterprises or industrial products with Vietnamese brands that are big enough and strong enough. Production depends on imported materials, so industrial products lack competition, and added value is not high,” emphasized Mr. Pham Tuan Anh.

From the perspective of enterprises, Mr. Dinh Quoc Thai, General Secretary of the Vietnam Steel Association, said that Vietnam's steel industry had grown from being a small backward industry to mastering science and technology, with a total capacity of 25 million tons of crude steel/year. From an economy that depended on imported steel, up to now, Vietnam rose to be an exporter of tens of billions of dollars. Specifically, in 2021, Vietnam exported more than 14 million tons of steel of all kinds, a turnover of about US$12.7 billion to more than 30 countries and territories.

However, the steel industry now also had to import mostly raw materials such as iron ore and scrap steel as raw materials and some spare parts to replace in the production process. “In the future, the first thing is to balance supply and demand, proactively supply input sources,” said Mr. Thai.

Similarly, Mr. Nguyen Huu Tu, a member of the Board of Directors, Vietnam Chemical Group, shared that chemicals were the foundation industry, acting as input materials for many important industries of the country. The chemical sector had sub-sectors from fertilizers, basic chemicals, industrial gases, rubber production, petrochemicals, consumer goods production, and electrochemistry. Vietnam produced basic products. such as caustic soda, all kinds of H2SO4, HCl, H3PO4, other chemicals meet the input. However, Vietnam still had not self-controlled some materials and had to import them.

Promoting the development of the materials industry

In the future, in order to contribute to improving the proactiveness of steel supply for the processing and manufacturing industries, the Vietnam Steel Association proposes to the Ministry of Industry and Trade to quickly develop a strategy for Vietnam's steel industry to 2030 with a vision to 2050, including specific policies to ensure the fast and sustainable development of Vietnam's steel industry in line with the National Strategy on Climate Change and the National Development Goals.

In addition, the State continues to promote policies to develop supporting industries, including a priority mechanism to develop processing and manufacturing facilities for details, components and spare parts using domestic steel as raw materials for other industries and other fields of the national economy that use steel as a material.

“The State also needs to continue promoting protective policies for the domestic steel industry to ensure that Vietnam’s steel industry develops quickly and strongly in a green direction, in line with the trend of global integration,” said Dinh. Quoc Thai.

Mr. Pham Tuan Anh analyzed that in the future, the world economy would follow the trend of taking advantage of the achievements of the Fourth Industrial Revolution.

Digital transformation would take place in many fields and sectors, along with supply chains as well as international economic integration activities would have adjustments, ensuring sustainability, avoiding external impacts such as the case of the recent Covid-19 pandemic, which disrupted the supply and lost the source of goods.

Therefore, in industrial development, Vietnam must develop autonomously in the country. When choosing sectors and sub-sectors for industrial development, it must be based on the strong and developing industries, and also on other criteria.

For example, among the foundation industries that are prioritized for development, there must be enterprises with the potential to build into strong economic corporations to lead industries and support industries to develop accordingly.

“In parallel with the development of the foundation industry, Vietnam must also develop sectors that produce input materials for other industries such as supporting industries, mechanical engineering, chemicals and materials industry. Those are issues that need attention in industrial development,” said Mr. Pham Tuan Anh.

To develop Vietnam's industry, the Ministry of Industry and Trade will propose the Government build large-scale industrial clusters and zones to attract investment as well as build industrial production chains. In addition to supporting policies for large corporations, the Ministry of Industry and Trade will also propose policies to support small and medium-sized enterprises in the industrial sector.

This is to overcome the inherent weaknesses of this group of enterprises through capital support, human resource training support, and technology transfer support. The goal is to form a complete industrial ecosystem in the future.

By Thanh Nguyen/ Binh Minh

Related News

Hai Phong Customs’ revenue rises about VND 1,000 billion

Hai Phong Customs’ revenue rises about VND 1,000 billion

VCN- In the first month of the year, Hai Phong Customs' revenue increased by nearly VND1,000 billion.
Import and export turnover reaches about US$29 billion in the second half of January 2025

Import and export turnover reaches about US$29 billion in the second half of January 2025

VCN - Vietnam's total import and export turnover in the second half of January 2025 (January 16-31, 2025) reached US$28.9 billion, the latest preliminary statistics of the General Department of Vietnam Customs reported.
State revenue in first month of the year equal to 14% of the estimate

State revenue in first month of the year equal to 14% of the estimate

VCN - According to the Ministry of Finance, in January - the first month of 2025, the total state budget revenue is estimated at VND275.9 trillion, equal to 14% of the estimate; meanwhile, the total state budget expenditure is estimated at VND134.4 trillion.
Hai Phong Customs processes more than 1,500 declarations during 2025 Lunar New Year holiday

Hai Phong Customs processes more than 1,500 declarations during 2025 Lunar New Year holiday

VCN - During the 2025 Lunar New Year holiday, Hai Phong Customs Department processed 1,547 declarations.

Latest News

Market edges up slightly as liquidity remains low

Market edges up slightly as liquidity remains low

Market breadth remained positive, with 161 gainers outnumbering 144 decliners.
Business regulations must be trimmed for development of enterprises: Experts

Business regulations must be trimmed for development of enterprises: Experts

The General Statistics Office (GSO)'s socio-economic report for January 2025 reveals that while over 33,400 newly established or resumed businesses entered the market - marking a 15% increase compared to January 2024 - more than 58,300 businesses withdrew from the market, representing a growth of 8.1% on year.
Vietnam's agricultural product exports shine in 2024

Vietnam's agricultural product exports shine in 2024

The agricultural sector wrapped up 2024 with 62.4 billion USD in export turnover, marking an 18.5% increase against 2023, while achieving a record trade surplus of 18.6 billion USD, surging 53.1%.
Aiming for 16% credit growth and removing credit room allocation

Aiming for 16% credit growth and removing credit room allocation

VCN - A representative of the State Bank of Vietnam (SBV) said that the SBV is gradually innovating its credit management methods, aiming to remove the mechanism of allocating credit room to each credit institution.

More News

Malaysia initiates anti-dumping investigation on galvanised sheets from Việt Nam

Malaysia initiates anti-dumping investigation on galvanised sheets from Việt Nam

Malaysia has announced it will initiate an anti-dumping duty investigation on the imports of galvanised iron coils/sheets or galvanised steel coils/sheets originating from or imported from Việt Nam, China and South Korea.
Coffee prices hit record highs, heightening speculation risks

Coffee prices hit record highs, heightening speculation risks

Phan Minh Thông, Chairman of Phúc Sinh JSC, called the price surge "insane," warning of continued increases as businesses are compelled to trade at elevated prices instead of following pre-set contracts.
Exports witness a rise of US$1 billion in the first 15 days of 2025

Exports witness a rise of US$1 billion in the first 15 days of 2025

VCN - Compared to the same period in 2024, exports in the first half of January 2025 increased by more than 6%, equivalent to nearly USS$1 billion.
Central industrial hub sets ambitious growth target in 2025

Central industrial hub sets ambitious growth target in 2025

The central province has targeted ambitious growth of up to 10 per cent with some key strategic industrial investment projects in 2025, contributing VNĐ25 trillion (US$1 billion) to the State budget.
Demand for dragon fruit in Tiền Giang Province continues to increase

Demand for dragon fruit in Tiền Giang Province continues to increase

Dragon fruit prices in Tiền Giang Province remain high after the Lunar New Year due to increased demand from China and domestic consumption.
Data centres are attracting investors in Asia

Data centres are attracting investors in Asia

The global data centre market reached new heights in 2024, driven by the growing demand for generative AI, which has triggered a new wave of investment.
US or China: Who will lead in Vietnamese Tra fish imports?

US or China: Who will lead in Vietnamese Tra fish imports?

VCN - Given that tra fish is a key export commodity for Vietnam's seafood industry, the question arises whether the United States will surpass China as the leading importer of this product in 2025.
Sustainable fashion presents promising niche market for textile manufacturers

Sustainable fashion presents promising niche market for textile manufacturers

The combination of sustainability and culture will open up more opportunities for Vietnamese textile enterprises to strengthen their position in the global market and capture the promising Nordic fashion market.
VN

VN's car industry to diversify supply chain

While China remains a significant supplier, recent trade data highlights Việt Nam’s efforts to diversify supply to meet industry demands.
Read More

Your care

Latest Most read
Import and export turnover reaches about US$29 billion in the second half of January 2025

Import and export turnover reaches about US$29 billion in the second half of January 2025

VCN - The figure decreased by 15.6% (equivalent to a decrease of US$5.33 billion) compared to the figure in the first half of January 2025.
Market edges up slightly as liquidity remains low

Market edges up slightly as liquidity remains low

Market breadth remained positive, with 161 gainers outnumbering 144 decliners.
Business regulations must be trimmed for development of enterprises: Experts

Business regulations must be trimmed for development of enterprises: Experts

The General Statistics Office (GSO)'s socio-economic report for January 2025 reveals that while over 33,400 newly established or resumed businesses entered the market - marking a 15% increase compared to January 2024 - more than 58,300 businesses withdrew from the market, representing a growth of 8.1% on year.
Vietnam's agricultural product exports shine in 2024

Vietnam's agricultural product exports shine in 2024

The agricultural sector wrapped up 2024 with 62.4 billion USD in export turnover, marking an 18.5% increase against 2023, while achieving a record trade surplus of 18.6 billion USD, surging 53.1%.
Aiming for 16% credit growth and removing credit room allocation

Aiming for 16% credit growth and removing credit room allocation

VCN - A representative of the State Bank of Vietnam (SBV) said that the SBV is gradually innovating its credit management methods, aiming to remove the mechanism of allocating credit room to each credit institution.
Mobile Version