While the world’s largest emerging economies including Russia, Brazil and China falter, Vietnam’s steady economic growth at near 7 per cent this year will make it a standout investment country. But despite the fact that there are ample opportunities for investors to Vietnam's market, many small and medium businesses have yet to overcome difficulties in the area of high-quality machinery and equipment, even to produce the spare parts to catch this chance.
According to a survey of the Japan External Trade Organisation (JETRO), in the supporting industry, although the localisation rate of Japanese enterprises in Vietnam has reached 32.2 per cent, up 4.3 percentage points compared with the year before, this level is still low compared to 64 per cent in China, 53 per cent in Thailand, 42 per cent in Malaysia and 41 per cent in Indonesia. Mr Daisuke Hiratsuka, Executive Vice President of JETRO said, “International enterprises when making investments in Vietnam have to encounter huge costs of importing components, which pushes up production costs. Therefore, to become more attractive to the investors and more competitive as well as to prepare for the TPP, AEC and Vietnam’s industrialisation in 2020, the development of supporting industries and localisation is crucial”.
As reported by Reuters, the Vietnamese government plans to invest a total of VND1.72 trillion (US$77 million) in supporting industries over the next 10 years. About 52 per cent of this VND 890 billion will be used to subsidize research and development projects. Launched in January, the initiative is focused on improving the technical capabilities of domestic companies.
Indeed, "In a very competitive global environment, domestic provide ability is king. Some of the world’s biggest manufacturers are already producing in Vietnam such as Samsung Electronics with 10 per cent localisation as of last autumn, and Toyota Motor was 19-37 per cent, depending on the car model. Such a delay in localisation has caused these investors to import a large amount of components. This year is an important milestone for all the manufacturers and industrialists in Vietnam to update the industrial facts and global trends, upgrade the technology and exchange knowledge to gain the firmly competitive position in the region", said Mr Duangdej Yuaikwarmdee, Deputy Managing Director and General Manager Vietnam of Reed Tradex Co., Ltd.
Reed Tradex, one of Asean’s leading exhibition organizers, has taken the opportunity to schedule the Vietnam Manufacturing Expo this April, during the golden time as TPP and AEC have taken full effects in the beginning of this year. Vietnam Manufacturing Expo 2016 focuses on machine tools for Mould & Die making and injection technologies for plastics manufacturing. To maximize the business integration and technology exchange, the organizer will bring up 200 brands from 20 countries to present their machine and equipment, including showing their intention to expand business in Vietnam. This will be the chance for Vietnam industrialists to attend on-site seminars and presentations by experts from the relevant industry associations, government representatives and the top leading companies, in order to get updated on industrial facts and global trends.
Former Ford Vietnam General Director, Laurent Charpentiersaid, “To increase the localisation, the role of supporting industry is extremely important; there is a necessity of quality spare parts manufacturers, parts supply and assembly businesses”. Vietnam Manufacturing Expo 2016 is one of thenotableevents for industrialists in Hanoi to have an objective look on current market demand, as well as directly sharing the practical experience to contribute to the implementation of the essential strategies in the near future to improve production ability, as well as meet specifications request from foreign partners.
“Vietnam Manufacturing Expo 2016” will be co-located with “Sheet Metalex Vietnam 2016” which is Vietnam’s only sheet metal fabrication technology and machinery exhibition on 06-08 April, 2016 at Hanoi International Centre for Exhibition (I.C.E.), Hanoi, Vietnam. For more information at: www.vietnammanufacturingexpo.com
Nam Pham
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Vietnamese
