The local supporting industries have seen positive movements after Vietnam has more thoroughly embraced its diverse new-generation free trade agreements.
Southern Vietnam has seen several investments in the supporting industry due to favourable policies.
Do Phuoc Tong, chairman of Duy Khanh Engineering Co., Ltd. based in Saigon High-Tech Park (SHTP), said that SHTP Management Authority has granted a license allowing the company to inject additional capital into its project on precise model manufacturing.
“We have pumped VND66.3 billion ($2.88 million) additional capital into the project and plan to kick-off the factory construction in this May,” said Tong, adding that in 2017, their company was licensed to invest in SHTP with the total registered capital of VND116.3 billion ($5 million).
Duy Khanh operates in the supporting industry, and the company's project is eligible for support from Ho Chi Minh City’s programme to boost investment.
In fact, due to procedure-related hurdles, the project has yet to receive support and has been stalling until present.
Duy Khanh is one of a fair number of firms who decided to pour money into the supporting industry of southern locations.
Binh Duong province has courted more than $170 million in foreign direct investment in January alone, with several projects in the supporting industry.
Early this month, Ba Ria-Vung Tau province licensed five projects valued at more than $174 million in total investment value. One of these is a supporting industry project that comes from Japan’s Arakawa Chemical Industries Ltd.
This project, valued at $45.6 million, is specialised in Polymer Acrylic production and trading to feed the paper industry.
Meanwhile, Binh Duong province has courted more than $170 million in foreign direct investment in January alone, with several projects in the supporting industry.
This includes the $20 million project of Singapore-backed Altop Vietnam Ltd. to produce and process moulding and casting items from aluminium alloys or Japan’s KBK Vietnam Co., Ltd. raising its investment capital by $5 million to produce and process springs and diverse mechanical components and accessories.
According to Nguyen Phuong Dong, deputy director of Ho Chi Minh City Department of Industry and Trade, to concentrate resources into supporting major industrial items and key industries, the department will further team up with related agencies to implement five major groups of measures.
The measures aim to attract investment from foreign-invested and local businesses into producing complete items, facilitating engagement of supporting industry businesses in the supply chain (through conferences to connect suppliers and international exhibitions on supporting industry) attached to the direction of developing the city’s major industrial products.
“Authorised agencies have devised the list of programmes designed to boost investment in light of Resolution 16of the municipal People’s Council to fuel investment into city-based supporting industry during 2018-2020 to provide practical support to businesses in this field,” Dong said. VIR
The supporting industries are having fresh opportunities amid the inflow of foreign capital and orders into Vietnam. However, local enterprises have to overcome multiple challenges to be able to take advantage of such opportunities.
Analysts say Vietnam’s supporting industries are seeing new opportunities as orders have increased and the capital continues to flow into Vietnam.