Unique opportunity for businesses in the supporting industry

According to international organizations, Vietnam is emerging as a bright spot, affirming its important position in the global supply chain. How do you assess this opportunity for the supporting industry?

Statically, Vietnam has 2,000 enterprises producing supporting industrial products, of which about 300 enterprises participate in multinational supply chains. Supporting industrial enterprises are making remarkable progress in competitiveness. Over the years, enterprises have had the opportunity to approach customers, continuously improve production activities, production management as well as invest in ISO standards to meet the needs of FDI enterprises in the supply chain

For example, Vi Nam Viet Production and Trading Joint Stock Company (Vinavit), Tien Thinh has participated in Samsung's supply chain or Nam Son Technology Engineering Company Limited from a distribution to research and development unit, successfully assembled "made in Vietnam" laser equipment, provided solutions for Vinsmart, even directly exported Vietnamese-branded laser cutting and engraving machines to Korea and Switzerland. Previously, Nidec and most recently, Foxconn Group (Taiwan, China) have studied Nam Son's products used to cut electronic circuit boards in the production process.

Not only supplying orders to foreign direct investment (FDI) enterprises, supporting industry enterprises are also confident in expanding their global market share. A clear proof of this is that as soon as the Supporting Industry Development Center, Ho Chi Minh City Department of Industry and Trade announced the list of 400 supporting industry products that FDI enterprises need to source from domestic enterprises in October 2023, more than 300 domestic enterprises approached and received sample orders. Up to now, the center has recorded more than 100 enterprises officially signing contracts with FDI enterprises. The products of these enterprises not only meet the needs of FDI enterprises but also supply to the global market.

Notably, we currently have an advantage in the production techniques of Vietnamese workers in the field of semiconductor chips and are of great interest to FDI investors and international corporations. Enterprises in the domestic supporting industry will be able to meet the investment needs of the semiconductor industry in Vietnam. Many new opportunities are opened up for enterprises in manufacturing supporting industries to penetrate in other emerging technology markets such as the aerospace industry, high-value medical industry, etc.

Besides opportunities, in your opinion, what difficulties do supporting industry enterprises need to overcome when participating deeply in the global supply chain?

Recent trends show that foreign manufacturers require a closed supply chain and most of them ask for providing A-Z components, instead of some individual details such as turning, welding, etc. for a long time. As participating directly in many activities connecting domestic supporting industry enterprises with FDI enterprises, I realize that the number of Vietnamese enterprises that can meet this requirement can be counted on the fingers.

Therefore, to make good use of the advantages, enterprises need to continue to improve their techniques, qualifications, as well as invest more in ISO, production qualifications and meet human resources. Thus, we will be more ready for Vietnam to "stand" in the global supply chain. On the other hand, cooperation and linkage between supporting industrial enterprises are needed to form chains and detail clusters to meet the strict and extremely high requirements of emerging technology markets as mentioned above as well as increase competitiveness in global supply chains.

As a locality with many advantages in attracting FDI investment in high-tech fields, what support has Ho Chi Minh City provided to supporting industrial enterprises, Madam?

In recent years, industrial production enterprises Ho Chi Minh City are exposed to many opportunities to link up to supply multinational corporations, to receive technology transfer, production management experience and gradually modernize domestic production. In particular, focusing on attracting enterprises to invest in high-tech zones in the field of semiconductor chips and high-value technology fields. To support enterprises, in recent years, the Ho Chi Minh City Department of Industry and Trade has also coordinated with departments, branches and sectors such as the Ho Chi Minh City Investment and Trade Promotion Center (ITPC) to implement many activities to promote opportunities for supporting industrial production enterprises to access FDI enterprises.

Ho Chi Minh City has issued Resolution 09, including Decision 42 of the city on regulations to support investment in projects. In particular, 4 key industries and supporting industrial sectors are also supported so that businesses have more motivation to invest in innovation, upgrade, expand production scale, and meet the requirements of the markets.

However, in my opinion, the important thing to do immediately is the readiness of supporting industrial production enterprises. Enterprises must map out a strategy in parallel with Ho Chi Minh City to upgrade production activities, better meeting the needs of the supply chain.

Thank you very much!