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Supporting industries need big support to develop

VietNamNet Bridge – Vietnam has vowed to develop supporting industries, but it still does not know what it should do to obtain that goal.

VietNamNet Bridge – Vietnam has vowed to develop supporting industries, but it still does not know what it should do to obtain that goal.

What to do to become an enterprise in supporting industry?

Mr Sanobe from Kawasaki City Supporting Industries Association, when asked what a business should have to become a satellite enterprise in a big complex, said that is the technology.

He said that such an enterprise does not need to have many workers, and does not need to have huge investment capital. “Manufacturers do not expect capital; they just want you to provide small parts of the machines. If you can provide small screw, then you have one reason to exist,” he said, “if your screw can satisfy the requirements set by the manufacturers”.

Meanwhile, a survey conducted by the Center for Developing Supporting Industries Enterprises, an arm of the Ministry of Industry and Trade on 346 enterprises showed that 182 enterprises are small ones with less than 200 workers.

Of these, most of the enterprises (59) operate in mechanical engineering, 63 are plastics and rubber companies, 30 are electrical and electronic enterprises. However, their partners are mostly domestic producers, while they still cannot cooperate with foreign companies just because of the low technologies.

HCM City, Dong Nai, Binh Duong and Ba Ria – Vung Tau are the four localities believed to have the highest numbers of enterprises in supporting industries. However, the local authorities all have confirmed that the enterprises remain incapable enough to approach foreign clients, because they understand that low technologies are a big problem.

Le Tuan Anh, General Director of Cat Thai Company, has noted that in the negotiations with foreign partners, the partners would first ask about the technologies utilized by Vietnamese enterprises, and then about the prices.

Vuong Trong Sanh, a senior official of the Dong Nai provincial Industry and Trade Department, also said Dong Nai has 588 enterprises in supporting industries, but only a few have been accepted by foreign partners, while others have been refused due to the technological problems.

According to Truong Thi Chi Binh, Director of the Center for Developing Supporting Industries Enterprises, only two Vietnamese enterprises have been chosen by Toyota Motor Vietnam as the satellite enterprises for it. Meanwhile, the automobile manufacturer needs the suppliers of 30,000 car parts which need to be made by some 2000 enterprises.

Lacking information?

According to the Industrial Policies Institute, only 50 enterprises, mostly foreign invested and joint ventures are capable to provide car parts to auto manufacturers. Meanwhile, Indonesia has 250, Malaysia 400, and Thailand 2500.

There have been no official statistics about the scale of the enterprises in supporting industries and the number of enterprises joining the product value chains. Binh said she cannot understand why the General Statistics Office still has not cared about this, while this is a very important production field.

Binh went on to say that motorbike, household electric, metal processing, office equipment, trucks and passenger vehicles manufacturers need Vietnamese supporting enterprises in 32 different production fields.

Meanwhile, a lot of Vietnamese enterprises complain that they lack information about the potential partners. Director of the Tam Hiep Thanh Mechanical Engineering Company in Dong Nai province said he got many orders from South Korean or Japanese partners, but he has not received any orders from domestic enterprises. “Maybe Vietnamese enterprises lack information about us?” he questioned.



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