Vietnam speeds up development of supporting industries

The Ministry of Industry and Trade (MoIT) will pay greater attention this year to the implementation of projects manufacturing products in supporting industries. (Photo: VNA)

The Ministry of Industry and Trade (MoIT) will pay greater attention this year to the implementation of projects manufacturing products in supporting industries, as many opportunities have appeared for Vietnam to bolster production and exports.

The COVID-19 pandemic has been a blow to the country’s economy and manufacturing sector, triggering a constant shortage of materials along with difficulties and congested delivery for finished products.

To address the problems, many Vietnamese firms are seeking domestic partners in material production and supporting industries, in a bid to save cost and time and improve quality.

Furthermore, a host of free trade agreements (FTAs) have created optimal conditions for an influx of investment into Vietnam as investors try to access preferential tariffs.

Foreign enterprises operating in Vietnam have taken the initiative in restructuring production value chains or switching to supporting industries, according to the MoIT.

In addition, businesses in the field have spared no effort to raise their quality and sharpen their competitive edge. Vietnam ranked eighth in the 2021 Agility Emerging Markets Logistics Index, up three places compared to 2020.

The index is an annual snapshot of industry sentiment and a ranking of the world’s 50 leading emerging markets by size, business conditions, infrastructure, and transport connections.

This year, the Vietnam Industry Agency under the MoIT is to review manufacturing projects, especially major endeavours in industrial products for export. It will join hands with relevant agencies in attracting investment, bolstering global production chains, and capitalising on trade agreements.

It will also carry out procedures for infrastructure investment for two centres facilitating industrial development in the northern and southern regions, along with working with localities that possess advantages in this regard, to discuss appropriate policies.

These centres will help industrial producers and enterprises in supporting industries boost innovation and technology transfer, improve productivity and quality, increase added value in their products, and take part in global supply chains.

Prime Minister Nguyen Xuan Phuc signed Resolution No.115 last year on measures to further propel supporting industries, setting out development goals for the next decade.

Vietnamese enterprises are to be able to produce highly-competitive support products, meeting 45 percent of essential needs for domestic production and consumption and accounting for about 11 percent of industrial production value by 2025.

About 1,000 enterprises are to be capable of direct supply to assembly enterprises and multinational corporations, with domestic enterprises to account for about 30 percent by 2025.

By 2030, support products will meet 70 percent of demand and account for about 14 percent of industrial production value. Some 2,000 companies are to be capable of supplying directly to assemblers and multinational corporations by 2030.

Vietnamese businesses operating in supporting industries have been developing in both quantity and quality in recent years, with improved production capacity and increasing engagement in global production chains.

In a recent report submitted to the National Assembly Standing Committee and legislators, the Government cited statistics showing that companies in supporting industries account for nearly 4.5 percent of all manufacturing and processing businesses and have created more than 600,000 jobs, equivalent to 8 percent of the workforce in the manufacturing and processing sector. Their net revenue now tops 900 trillion VND (38.9 billion USD), or about 11 percent of the sector’s total.

Some Vietnamese enterprises boast relatively good capacity in producing moulds, bicycle and motorbike components, electrical cables, plastic and rubber components, and tyres, meeting domestic demand and the requirements of foreign importers.

The report noted that supporting industries play a decisive role in restructuring the economy, improving workplace productivity and skills, and promoting the competitiveness and quality of Vietnamese goods and the economy./.