Industrial Production Concentration

According to the Vietnam Ministry of Industry and Trade, despite being oriented toward exports, industry hasn’t created spear-head export goods of high added value but concentrated on labour intensive products such as leather and footwear, textile and garment, electric wire and cable, which results in low industrial efficiency. There’s a big difference between growth rates of industrial production value and added value.

 

First nine months in 2011 witnessed the highest growth rate in manufacturing industry year on year (increasing by 10.7 percent, higher than the growth rate of the whole industry). Besides, some specific industries had very strong growth, such as pottery and porcelain production, automobiles, motorbikes, cast metal products manufacturing, fertilizers, clothes, and shoes.

 

However, there were some manufacturing industries with significantly decreasing production, such as ship building and repair at 26.7 percent, desk, chair, wardrobe and bed making at 3.3 percent, insulated electric wire and cable production at 23.1 percent, and vehicle manufacturing at 0.3 percent. The lowest growth rate was of the mining industry at 0.8 percent, even lower than the general growth rate; whereas crude oil and natural gas exploitation decreased by 0.4 percent, stone, sand, gravel, kaolin and clay exploitation only increased by 1.8 percent.

 

For the past time, there have been many difficulties in implementing and developing supporting industries. Since investment to promote supporting industry hasn’t drawn attention from enterprises in economic sectors, there hasn’t been long lasting and sustainable industrial growth yet.

 

The current biggest difficulty in industrial production is still increasing demand for capital caused by higher input floor price while credit capital’s sharp decrease and high interest rate influenced production and business and investment efficiency. Due to lack of capital, projects improving production capacity are progressing slowly, greatly impacting the implementation of set targets and resulting in waste of mobilized resources.

 

In the coming time, the Ministry of Industry and Trade will continue to boost production, and balance supply and demand of necessary goods. Vietnam Electricity chaired and coordinated a meeting with stakeholders to actively adopt measures to ensure electricity production and supply for production and consumption in the coming months, foster electricity conserving programs, and maintain progress on electric power and grid projects.

 

To handle the capital issue, the Ministry of Industry and Trade will mobilize all capital sources for industrial production as well as encourage enterprises to invest in supporting industry, provide material and inputs to textile and garment, leather and shoes, electronics and informatics industries; and components, spares to automobiles, motorbikes, ship building and mechanical engineering industries.

 

As for enterprises, it is necessary to take full advantage of production capacity and market demand to provide economic necessities, which are electricity, coal, petroleum, fertilizer, building steel and iron; some consumption goods such as clothes, footwear, milk, and vegetable oil; and export goods such as crude oil, garment, footwear, mechanical products, electric wire and cable, wood furniture, handicrafts; and enhance and upgrade distribution systems to expand market share for industrial products.