Samsung Vietnam: "Increasing the localization rate comes from the benefit of Samsung itself"

Mr. Bang Hyun Woo, Deputy General Director for Foreign Affairs, Samsung Vietnam

Could you tell us, to date, how many suppliers have Samsung got in Vietnam?

In 2013, Samsung has only five Vietnamese enterprises as tier 1 suppliers, the Samsung's direct suppliers. It is expected that by the end of this year, it will be 29 enterprises.

As a supplier for Samsung, Vietnamese companies just stop at providing simple products such as packaging. However, over time, under the guidance of Samsung, the products that Vietnamese enterprises can supply to Samsung have shifted to more specialized fields, such as plastic injection or more sophisticated parts.

How has Samsung been deploying to support Vietnamese enterprises to increasingly meet the requirements set out, qualified to become a supplier for Samsung?

To find more Vietnamese enterprises as suppliers, each year Samsung held exhibitions, seminars seeking suppliers. Through these events, Samsung is finding out potential enterprises to become suppliers, then proceed to support them to improve capacity. For example, recently, 138 Vietnamese enterprises through the exhibition were listed as potential enterprises for Samsung to continue researching and training suppliers.

Do you have any advice for Vietnamese enterprises to actively change, better meet the requirements that large enterprises such as Samsung set out?

Not only Samsung but many other FDI companies have high requirements for technology, quality etc. This can not be achieved in a short time. In order to improve their capability, Vietnamese enterprises can go in the direction of inviting experts who have worked for many years in Korea and Japan to work as consultants. Through this team, Vietnamese enterprises can learn many things about technology as well as management skills and gradually accumulate to improve their level.

In addition to the supplier issue, one of the relatively interesting content is the current localization rate of Samsung. Could you please tell me how much of this is up to now and how is it possible to increase the localization rate in the coming time?

By the end of 2016, Samsung's official localization rate is 57%. Improving the localization rate cannot be said simply. It is not right to think that a company with a high localization rate is a good company.

Samsung Electronics is producing high tech products so the localization rate cannot be as great as the thinking and desire of the people or the Government of Vietnam.

Today, Samsung manufactures a range of mobile phones, particularly sophisticated. Besides, Samsung also has a home appliance factory in Ho Chi Minh City, with less sophistication. Therefore, in the future, the localization rate of household products can grow faster than the production of mobile phones.

Samsung's efforts to improve the localization rate does not come from the request of the Government of Vietnam or the people's opinion that the higher Samsung's localization rate, the more proved good business. This enhancement comes from the factor, the higher the localization rate, the more benefit Samsung. Except for some of an essential parts, Samsung Electronics wants to buy the parts and accessories are Samsung policy.

In the future, there may be many Vietnamese enterprises involved in the supply chain of Samsung and will not only supply to Samsung's manufacturing plants in Vietnam but will also supply to Samsung's factories in other markets in Europe and other continents.

Thank you, Sir!