Mega Shows to Drive up Vietnam’s Metalworking and Manufacturing Industry

Four major events to speed up supporting industry in Ho Chi Minh City, including “Business Alliance 2015 for Supporting Industry”, “METALEX Vietnam 2015 (MXV)”, “Electronics Assembly 2015 (EA)”, and “Industrial Components & Subcontracting Vietnam 2015 (ICSV)”, were organized on October 8-10 at Saigon Exhibition & Convention Center (SECC) in Ho Chi Minh City by Reed Tradex Co., Ltd., Japan External Trade Organization (JETRO HCMC); and Investment & Trade Promotion Center (ITPC) of Ho Chi Minh City.

Mr. Duangdej Yuaikwarmdee, Deputy Managing Director and General Manager Vietnam of Reed Tradex Co., Ltd. Said: “Recently, Vietnam is one of ASEAN’s top production bases for auto parts, motorbike components, processing steel and so on. With the intention of supporting this vibrant manufacturing hub, this year, METALEX Vietnam with continue the mission to be the global sourcing platform of over 500 brands from 25 countries, along with 7 national Pavilions, that are eager to provide the participants cutting edge technologies to meet high production standards and yield unmatched results.

In addition to experiencing state-of-the-art machineries at METALEX Vietnam, the participants can also get the most out of this business inducing event by meeting with Japanese part buyers and Vietnamese subcontractors at the “Business Alliance for Supporting Industry 2015” organized by both prestigious organizations Japan External Trade Organization in Ho Chi Minh City and Investment & Trade Promotion Centre of Ho Chi Minh City. Besides this alliance, parts makers from Thailand under the leadership of BOI Unit for Industrial Linkage Development (BUILD) will showcase industrial grade parts and components that will add performance and value to your products at “Industrial Components & Subcontracting Vietnam.” Given strong commitment for a stronger industry, JETRO, ITPC, and BUILD are Vietnam’s valuable partners for a brighter future in this industry.

Driving development requires more than just technologies, which are knowledge and networking opportunities that holds the key productivity. Therefore, METALEX Vietnam also prepared rich diverse activities, for instance Vietnam Supporting Industries Forum, Engineer Master Class, Business Matchmaking Service, and the KomaTaisen Tournament that aims to expand global outlook and sharpen business competitive edge. This show is ready to contribute to the development of Vietnam’s metalworking and manufacturing industry, as well as empower participants to be ready to take on any unforeseen challenges.”

Mr. Hirotaka Yasuzumi, Chief Representative of Japan External Trade Organization (JETRO HCMC) shared his opinion “In 2015, the investment of Japanese enterprises in Vietnam keeps increasing, and also has trend to surpass the previous year. In the future, the investment of Japanese enterprises will continue to be a great motivation source for Vietnam's economy.

One of the main concerns for Japanese enterprises to invest in Vietnam is the ability of domestic supply. Referring “JETRO Survey of Japanese-Affiliated Firms in ASIA and Oceania” gave the results as the labor costs accounted for 17.4% in total overall annual cost of production, while the cost of raw materials and components up to 58%.Therefore, the important issue to enhance the price’s competitiveness is how to develop the strong supporting industry to be able cut cost of raw materials. The settlement of this demand involves increasing the proportion of domestic supply. According to a JETRO survey, 78% of Japanese enterprises who intends investing in Vietnam, have the plan to increase the supply ratio in Vietnam. 77% of respondents gave the serious intention to have main supplies from local market – Vietnam to cut costs and reduce processing time.

The local manufacturers, especially the companies in the South of Vietnam is now keeping  to develop the technological capabilities firmly, number of businesses which are able to meet the expected quality, technology, delivery timing for the Japanese enterprises; gradually increase. For Japanese companies have the pinnacle technical level of quality management, the supporting industry of Vietnam is gradually becoming a trusted partner.”

Mr. Nguyen Tuan, Vice Director of Investment & Trade Promotion Center (ITPC) stated “Developing supporting industries has been considered as one of the most prior policies of Vietnam in order to promote the development of industries, and help to boost the process of industrialization - modernization of the country. In the master plan for developing supporting industries by 2020, with a vision to 2030 approved by the Ministry of Industry and Trade, Vietnam has focused on developing supporting industries under 3 main areas which are (1) metal parts and components, plastic - rubber, electrical – electronics (2) Textile – footwear industry and (3) The supporting industrial sector for high technology industry.

The first main area, metal parts and components, plastic - rubber, electrical - electronics, by 2020 to meet 60% of demand for parts and components for industries. In 2030, it can be possible to meet 80% of this demand. Mechanical, automotive, agricultural machinery, electronic industries ... are prioritized to develop. To support businesses that produce spare parts in joining the regional and international markets.

However, the supporting industrial sector for high technology industry, to develop business systems providing specialized equipment, to support the transfer of technology in this field; to form the businesses in machinery maintenance and repair that meet international standards in order to develop equipment and software manufacturers. Prioritizing to attract investment in manufacturing materials such as steel fabrication, plastics, rubber, composites, ceramic serving high tech industry, basic chemicals, specialized chemicals for biotechnology industry, electronic materials...

In recent years, foreign investment flowing into Vietnam is quite large. According to the Department of Planning and Investment of Ho Chi Minh City, from the beginning of the year to September 15, 2015, the city has been had 397 foreign-invested projects granted investment certificates in the province with registered capital of $ 2362.8 million, increasing 115.3% in comparison with the same perious last year. Sort by the investment scale, there were 15 projects with the capital from $ 10 million to less than $ 100 million, capitalized at US $ 554.5 million in total; and 3 projects with capital of $100 million capital or more, invested $1,610 million. The investment sector mainly focus on: real estate, industry, construction and trading... Manufacturers in Japan, South Korea, Taiwan ... tends to transfer technologies and factories to Vietnam. This has led to a high demand for parts and components of the manufacturers. This is a chance for domestic enterprises to take opportunities and become the suppliers for corporations.

Export Processing Zones & Industrial Parks in Ho Chi Minh City now have got about 260 FDI enterprises in supporting industry, accounting for over 50% of the total FDI companies. These companies mainly produce for: electronics, mechanical, automotive industries... Their products are mainly exported to overseas in order to implement the next process of the global supply chain. Most of materials, components and parts are imported from abroad, this shows that the connection and cooperation between local enterprises and foreign invested enterprises are still limited.”

Le Phuong