Many Incentives for Supporting Industry Development

8:13:32 AM | 10/8/2023

Vinh Phuc province has identified developing supporting industries as one of the key solutions to attract more investment funds and help Vinh Phuc achieve its goal of becoming an automobile and motorcycle manufacturing hub of the northern key economic region and the country. Therefore, Vinh Phuc province has issued many incentive policies to facilitate industrial parts manufacturers to participate more deeply in global production networks and value chains.

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According to Decision 3663/QD-UBND on Vinh Phuc Supporting Industry Development Program in 2021-2025, Vinh Phuc planned to allocate nearly VND95 billion in four years (2022-2025) to develop supporting industries. The program aims to enable its supporting industries to produce high-value industrial products for large domestic and international firms and increase their exports. By 2025, more local parts manufacturers will become first-tier and second-tier suppliers for automobile, motorcycle, electric and electronics producers that supply complete products and equip some for giant firms or export to foreign markets. Vinh Phuc province hoped to have 10 domestic industrial parts manufacturers involved in value chains operated by giant firms to produce products of international standards. To achieve the above objectives, the Vinh Phuc Provincial People’s Committee assigned related agencies to implement solutions to develop supporting industries such as enhancing communications on supporting industries; organizing trade fairs and exhibitions for businesses to introduce and display their industrial parts; building thematic search and developing domestic and foreign markets for industrial components. In addition, Vinh Phuc province introduced support policies on high-quality human resources training, research and development (R&D), technological application, transfer and innovation and testing. It also built and operated websites on supporting industries.

Vinh Phuc province has issued Decision 39/2017/QD-UBND on support for manufacturers that produce prioritized industrial parts in 2017-2025, in order to develop supporting industries as a solid foundation for other industries. According to this decision, manufacturers involved in prioritized industries such as electronics, automobile, mechanical engineering and high-tech were eligible for preferential loans for new investment projects or production expansion projects. They were also subsidized up to 80% of the budget, not exceeding VND300 million, for participating in domestic and foreign trade fairs to promote and introduce their products. By 2022, Vinh Phuc province had 240 supporting industrial enterprises, mainly engaged in mechanical engineering, automobile, motorcycle, textile and garment, electronics, information technology and construction materials. Many companies effectively utilized the central and local support mechanisms and policies to actively increase their capital and expand their production scale, innovate their product models, improve their product quality and enlarge their consumption markets. This not only created jobs for many workers and increased state budget revenue, but also helped boost key local industries and enhance the local investment environment. Industrial workers earned VND6-8 million of salary per month each, while highly skilled workers earned up to VND12-15 million per month. The introduction of support policies and mechanisms for the development of supporting industries, tailored flexibly for specific periods in line with foreign investment inflows, driven by in-depth development, productivity and product quality improvement, has enabled Vinh Phuc to attract more domestic and foreign investors and foster rapid and sustainable socioeconomic development.

By Nguyet Tham, Vietnam Business Forum