return icon

How do VN businesses join the global supply chain?

“If enterprises want to join the global supply chain, don’t think local,” said Nguyen Anh Tuan from Samsung Vietnam.

Tuan, at a recent conference on supporting Vietnam’s enterprises developing sustainable value chains, spoke about Samsung’s component vendors.





“A lot of Vietnam’s companies said to us: As long as you commit to buy our products, we will borrow money to make investments with advanced technologies to make the products that meet the standards set by Samsung,” Tuan said.

“However, we are living in a flat world with fair competition. There is no discriminatory treatment between South Korean or Japanese and Vietnamese enterprises,” he said.

The competitiveness of enterprises and products, according to Tuan, are reflected in the production costs of small devices.

Samsung’s mobile phones and phone parts are getting more sophisticated and smaller, which change every six months. It is a challenge for Vietnamese enterprises to renovate production lines and technologies, which requires huge capital.

“If Vietnamese vendors can provide products with quality, meeting requirements, and at stable reasonable prices, there won’t be a reason for Samsung to refuse to buy products from them,” he said.

According to Tuan, there are many challenges that Vietnamese enterprises encounter in trying to become Samsung’s vendors.

Samsung’s mobile phones and phone parts are getting more sophisticated and smaller, which change every six months. It is a challenge for Vietnamese enterprises to renovate production lines and technologies, which requires huge capital.

If Vietnamese enterprises have huge capital, they would rather invest in the service sector than in manufacturing.

Besides the major requirements on production and quality control, Samsung also encourages its partners to pay attention to R&D. In Vietnam, enterprises’ spending on R&D is very low, just 0.2-0.3 percent of their revenue.

“You can sell a screw at 1 dong today, but you’ll need to sell it at 0.8 dong the next year, or sell a product with higher quality at the same price,” he said, adding that enterprises can’t do this without R&D.

Another criterion Samsung considers is the vendors’ compliance with laws. If enterprises are slow in paying their workers, this could be a risk: workers may go on strike which would disrupt the supply sources of Samsung, which will force Samsung to find other solutions.

Environmental protection is also one of Samsung’s concerns. Any violations of environmental protection laws will affect its reputation.

The last thing many Vietnam’s enterprises find difficult to do is credit risk management.

“Enterprises borrow too much,” Tuan said. “Many of them are sometimes overconfident and make overly heavy investments in production lines, and therefore, they suffer heavily as there are few orders because of Covid-19 and other reasons." Nhip Song Kinh Te

Translated by Kim Chi 


Nikkei Asian Review: Samsung Electronics looks to shift production to VN

Nikkei Asian Review: Samsung Electronics looks to shift production to VN

Samsung Electronics will end personal computer production in China as it looks to shift production to Viet Nam to cut costs and remain competitive in the PC business, according to the Nikkei Asian Review. 

Creating global connections for supporting industries

Creating global connections for supporting industries

Companies that provide support to manufacturing and processing industries may have grown steadily in recent years but many are still struggling to connect to the global market.


Corporate bond market struggling with challenges

The size of the corporate bond market is estimated at some VND1,374 trillion, equivalent to 15% of GDP. The Government aims to raise this figure to 20% by 2025.

President requires greater efforts to promote value of Ngoc Linh ginseng

Ngoc Linh ginseng deserves the "National treasure" title, and it is necessary to strongly promote the role of this treasure in improving people's livelihoods, President Nguyen Xuan Phuc said .

EVFTA outpaces CPTPP in preference utilisation rate

The utilisation rate of tax incentives set out in the EU-Vietnam Free Trade Agreement (EVFTA) during Q1 soared by over 32%, representing a four-fold rise compared to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Refusal to issue visas to new VN passport causes problems for travel firms

The rejection of Vietnam’s new passport by some EU member countries is affecting HCM City tourism companies since their customers are unable to travel to those countries.

Vietnam set to scrap COVID quarantine for imported processed seafood

The Ministry of Agriculture and Rural Development has removed COVID-related quarantine requirements for frozen processed seafood products imported for the purpose of reprocessing for export.

HCM City seeks to boost technology transfer from universities

Huynh Kim Tuoc, managing director of Sai Gon Innovation Hub's (SiHub) Start-up Support Centre under the HCM City Department of Science and Technology, affirmed Vietnam holds tremendous potential for technology development

Vigilance urged against COVID-19 amid emergence of new epidemics

Prime Minister Pham Minh Chinh asked ministries, agencies and localities to maintain vigilance against COVID-19 while addressing a meeting in Hanoi on Saturday.

Vietnamese, British agencies coordinate in identifying fire victims

The Consular Department under the Ministry of Foreign Affairs and the Vietnamese Embassy in the UK will continue to coordinate with Vietnamese and British agencies to identify victims in a blaze in Greater Manchester on May 7.

Photo contest highlighting beauty of Vietnamese islands kicks off

Professional and amateur photographers across Vietnam are encouraged to compete in a photo contest highlighting the beauty of Vietnamese Hoang Sa and Truong Sa islands.

Enjoying Quang-style noodle soup in the place where it was born

Phu Chiem Village in Dien Phuong Commune, Dien Ban District, Quang Nam Province, is where the popular Quang-style noodle soup was first created. And where better to taste this specialty than the place where it was born.

Exploring hidden spots on Co To Island

Aside from white sand, the blue sea and fresh air, Co To Island in Quang Ninh Province has several other beautiful spots that are worth a visit.

Vietnamese leaders extend sympathy to Cuba over oil tank explosion

Top Vietnamese leaders have sent messages of sympathy to their Cuban counterparts over severe losses caused by a massive blaze in an oil storage facility in Cuba’s province of Matanzas on August 5.

CNN reporter loves Vietnamese fish sauce

Chris Dwyer, a reporter for CNN, says he has loved Vietnamese fish sauce made in Phu Quoc (South Vietnam), though it was not easy to taste at the beginning.

Apple CEO Tim Cook appreciates Vietnam market potential

Vietnam, together with Brazil, Indonesia and India that are emerging markets, have made practical contributions to Apple’s group’s outstanding performance in the second quarter of this year, said CEO Tim Cook.

Electronics manufacturers ‘forget’ to recall or recycle used products

Large electronics manufacturers are still not willing to participate in the collecting and recycling of electronic waste to ensure a good living environment for people.