Vietnamese enterprises limited in global supply chain

A production line at Toyota in the northern province of Vinh Phuc. (Photo: VNA)

Vietnamese enterprises currently have limited participation in the global supply chain, and are not deeply involved in the value chain of multinational corporations in Vietnam.

Pham Tuan Anh, Deputy Director of the Industry Agency at the Ministry of Industry and Trade, said that Vietnam currently had about 5,000 processing and manufacturing enterprises engaged in providing spare parts for the automotive and mechanical industries.

In which 70% of enterprises supply domestic manufacturers, 8% supply exporters and 17% are involved in providing both.

Only about 30% of supporting industry enterprises have joined the global supply chain and value chain.

This linkage is loose for many reasons, the main one being the limited internal resources of the industry, said Anh.

Do Thi Thuy Huong, Vice President of the Vietnam Association for Supporting Industries, said that the specificity of the industry required capital and technology, which were two weaknesses of Vietnamese enterprises.

Besides, the linkage between enterprises in Vietnam is still limited and can be said to be weak. They have not fully been aware of the great benefits of linking into the domestic business community or between domestic and foreign enterprises.

Anh also acknowledged that Vietnam currently did not have a leading business in the industry.

The level of enterprises and the quality of human resources were still limited. Research and development work and new product development had not been paid attention and there was a lack of investment capital, said Anh.

Meanwhile, he added that the allocation of resources to implement policies to support the development of the supporting industry was still ineffective due to the overlapping conflicts of other laws.

“We must strengthen linkages between domestic enterprises, the FDI sector and the global market to take advantage of opportunities from free trade agreements from the fourth industrial revolution to bring industrial enterprises in the country to participate more deeply in the global value chain,” Anh told Cong Thuong (Industry and Trade) newspaper./.