Supporting industries not only create industrial production value but also help attract investment into hi-tech industries. Many meetings have been organised to seek measures to promote and develop this potential industry but no significant changes have been made. In 2012, with the sustainable development strategy, Vietnam will invest more for supporting industries to enhance the added value of industrial production, reduce the trade deficit and integrate more deeply into global production chains.
According to survey results, Vietnam is one of the most attractive investment destinations in the region, but the availability of materials for production is a major difficulty for investors. Vietnam’s industry in general and supporting industries in particular are standing ahead of a mixed blessing.
It is undeniable that support industries play an important role in industrial development and the abundant workforce is an advantage of Vietnam in attracting investors. Ancillary industries are now in small scale and lack of development strategies. In reality, Vietnam’s industrial production has grown up in recent years though, major works remain outsourcing and exploitation which have low added value and have weak competitiveness. Industrial products mostly belong to key sectors like mechanical engineering, apparel, footwear and electronics. Nonetheless, inputs are mainly imported from foreign nations. According to the Ministry of Industry and Trade, supporting industries are now relying 80 percent of materials on foreign suppliers.
In addition, although domestic producers can supply apparel materials but the quality is not high enough for high-quality products which are used to export. On the other hand, their capacities are not enough to meet the demand of domestic producers. And, if they lack investment in 2012 and subsequent years, they will not be able to find supply sources.
For that reason, the development of supporting industries is a strategic direction of the Vietnamese industrial sector in the 2011-2015 period. In 2012, Vietnam will focus on investing and attracting investment for auxiliary industries. According to forecasts, many big motorised vehicle producers are locating their production facilities in Vietnam. Thus, supporting industries like parts and electronic device production will attract a lot of investors. Many provinces and industrial zones will develop specialised areas for supporting industries. For example, Binh Duong province will establish supporting industrial zones in 2012.
The 5th Vietnam - Kansai (Japan) Economic Forum Dialogue held in Da Nang City in late 2011 underscored the interest of businesses in Kansai region in manufacturing and supporting industries in Vietnam.
In the coming time, Vietnam will have many more incentive policies to encourage and facilitate the formation of production areas for supporting industries to reduce reliance on foreign supplies. The Government will provide more support for scientific and technological study and application and speed up industrial human resource training. This will be a good opportunity for Vietnam’s supporting industries to address current difficulties.
Speaking at the “Vietnam Manufacturing Industry and Supporting Industry” Forum held in 2011 by the Vietnam Chamber of Commerce and Industry (VCCI) and the Japan External Trade Organization (JETRO), VCCI President Vu Tien Loc said supporting industries would help reduce current trade deficit. Developing supporting industries also serves as a "patchwork" for the development of many other industries, not merely to scale up domestic industrial production but more importantly catch up and attract foreign investment.
According to the supporting industry development plan through 2020, the Government approves supporting industries for garment, textile, leather, footwear, automobile and mechanical engineering. And, industrial parks will be favourite destination for foreign investors to locate their supporting industrial plants.
Notably, in 2015, all tariffs among ASEAN countries will be abolished. Vietnamese supporting industries will have more opportunities for development. In the short term, Vietnam will give priority to manufacturing high-quality moulds, auto parts, motorcycle parts, electronic appliances, oil and gas equipment, steel products, ship components, and plastic products. The country will integrate more deeply into regional and global supply chains.
Thu Ha
Vietnamese
