Latest News about supporting industries
Vietnam is looking to work closely with foreign firms such as Samsung and Toyota to boost the supply of parts within the country, according to the Ministry of Industry and Trade.
Foreign direct investment in supporting industries is expected to spike in the coming months as more and more foreign companies establish production facilities in Vietnam and seek to develop supply chains here, experts said.
The Ministry of Industry and Trade (MoIT) has introduced a range of measures to boost the growth of support industries in a bid to promote the engagement of local companies in production chains.
Some foreign automobile manufacturers and car part producers are considering setting up manufacturing facilities in Vietnam. Will Vietnam take advantage of the opportunity to become a production base in the region?
The ratio of Vietnamese goods imported and used as input materials by foreign countries is decreasing, while the ratio of Vietnam’s import of input materials to produce goods for end-consumption is increasing.
“If enterprises want to join the global supply chain, don’t think local,” said Nguyen Anh Tuan from Samsung Vietnam.
The foreign capital inflow into Vietnam will help local enterprises expand their production, but the opportunity can only be grabbed by capable enterprises.
While other industries complain about the lack of jobs, enterprises in supporting industries have been operating at full capacity to satisfy a high number of orders.
International manufacturers are seeking component suppliers in Vietnam, considering Vietnam as an alternative market in the context of Covid-19 escalation.
A number of local firms in supporting industries have been receiving more orders from foreign partners due to the coronavirus outbreak disrupting supply chains in China.
Samsung Electronics has announced the temporary shutdown of its factory in Gumi, South Korea and has relocated the production line of some high-end smartphone models to Vietnam.
Because of the Chinese supply interruption in Covid-19, Vietnam’s enterprises have tried to import materials from Japan and South Korea. But the two countries have also been suffering from the epidemic.
The luxury tax rate on electric automobiles and the added value created in Vietnam in automobile manufacturing and assembling may be cut to zero percent to encourage the development of supporting industries.
The move is aimed to help develop the automotive supporting industries, particularly as Vietnam still has to import massive basic materials for domestic car production.
The proportion of automobile parts made in Vietnam remains modest because of problems in production costs and quality.
The textile and garment industry has orders to export $18 billion worth of products, but the opportunities brought by CPTPP have not been that great so far.