JETRO: Vietnam supporting industries improving

Weak supporting industries are a major challenge to Japanese companies in Vietnam in the past years. However, the situation has improved.

A recent survey of JETRO showed the proportion of locally-made products supplied to Japanese producers in Vietnam picked up from 22% four years ago to 33% last year, Hirotaka Yasuzumi, managing director of JETRO in HCMC, told a signing ceremony of the Business Alliance for Supporting Industry 2015 in HCMC Thursday.

Yasuzumi, however, said the improvement was greatly contributed by foreign-invested companies in this market but the contribution of domestic firms remained modest. On top of that, the localization ratio in Vietnam was below the 64% ratio in China and 53% in Thailand.

Yasuzumi said foreign direct investment (FDI) flows in general and Japanese investments in particular in Vietnam would continue to rise. This means local enterprises need to increase supplies for foreign investors.

Duangdej Yuaikwarmdee, deputy managing director of Thailand’s Reed Tradex Co. Ltd., said Vietnam is emerging as an attractive destination for foreign investors and this has resulted in higher demand for industrial parts.

To develop supporting industries, Yasuzumi called for the Government to offer more supporting policies for enterprises to solve their problems related to a lack of capital and technology.

As most enterprises active in supporting industries are small and medium, they are weak in finance and governance and unable to access modern technology. The solutions for them are incentives concerning tax, human resource development, credit and administrative procedures, said Yasuzumi.

Yasuzumi noted some backing policies for supporting industries have yet to work.

According to him, an official of the Ministry of Planning and Investment recently said the National Assembly had been aware of the importance of developing local enterprises and started to discuss a law on support for small- and medium-sized enterprises (SMEs).

“I appreciate this move for SMEs because the development of local SMEs is important to supply more locally-made parts to Japanese companies in this market,” Yasuzumi said at a function held in HCMC to introduce METALEX Vietnam 2015.+ Reed Tradex Co. Ltd. is the organizer of the machine tools and metalworking technologies expo METALEX in Vietnam and Thailand.

The expo, which is part of ASEAN’s largest International Machine Tools and Metalworking Technologies Trade Exhibition, will take place at the Saigon Exhibition and Convention Center (SECC) in HCMC’s District 7 on October 8-10. International suppliers will showcase their advanced products and solutions in the sector.

The exhibition of Business Alliance for Supporting Industry 2015 will be organized by the HCMC Office of JETRO and the HCMC Investment and Trade Promotion Center (ITPC) at SECC in the period. The event will be a platform for parts manufacturers to introduce their products and find suppliers in Vietnam.

Theo Quoc Hung – thesaigontimes.vn