Dong Nai seeks ways to bolster support industries

26-Nov-2020 Intellasia | VNA | 6:02 AM Print This Post

The southern province of Dong Nai has reviewed support industries for spearhead industrial sectors, in addition to high-tech industry.

Both sectors are able to generate high added value and accelerate the industrial restructuring. The modernisation of devices and production technology, along with market expansion in line with joining global supply chains, are therefore necessary, according to insiders.

Dong Nai is home to more than 600 companies in support industries, primarily in garments and textiles, footwear, electronics, and mechanical engineering.

The province’s industrial production value in support industries this year has surpassed 130 billion VND (5.6 million USD), or some 23 percent of its total industrial value, according to a representative from the provincial Department of Industry and Trade.

Local firms in the sector, however, are still struggling because of limits in capital, technology, human resources, and skills.

For example, the Tuong Lai company in Long Thanh district, which specialises in rubber and plastic spare parts for the automotive industry, is facing a severe shortage of materials as it heavily depends on imports, which have been disrupted by the COVID-19 pandemic.

Meanwhile, the Huynh Duc private trade-services company in Bien Hoa city recently channelled about 18 billion VND into new equipment and faces ongoing difficulties in capital mobilisation, its director Pham Nhat Duy said.

Vice head of the Management Board of Dong Nai Industrial Parks Pham Van Cuong said support industries possess huge room for growth.

Of particular note, along with strategic policies from the government, businesses are also advised to renew equipment and technologies, and increase production capacity to take further part in global supply chains to create high-quality products sold at competitive prices.

In the time to come, Dong Nai is projected to welcome more FDI enterprises seeking material suppliers, which will help raise the localisation rate. This is deemed a major opportunity for companies in support industries to join global supply chains, Cuong added.

In response, local companies have plans to build new factories, install modern machinery, and increase the number of skilled workers.

Vietnamese enterprises are to be able to produce highly-competitive support products, meeting 45 percent of essential needs for domestic production and consumption and accounting for about 11 percent of industrial production value by 2025.

About 1,000 enterprises are to be capable of direct supply to assembly enterprises and multinational corporations, with domestic enterprises to account for about 30 percent by 2025.

Vietnam has taken measures to improve the capacity of its support industries to see that domestic enterprises effectively participate in global value chains.

Considered the backbone of the economy, manufacturing is a key driver of growth in the national industrial sector. With average annual growth of 10.6 per cent, and 4.96 percent in the first half of 2020, manufacturing is a “bright spot” in Vietnam’s industrial sector in the context of the global economic downturn due to COVID-19.

Manufacturing is also a magnet for FDI. Of 3,478 new FDI projects nationwide last year, manufacturing accounted for the highest proportion, with 21.6 billion USD, or 67.8 percent of total registered investment capital.

If the manufacturing industry was to be viewed as a house, support industries can be compared to its foundations. Developing support industries will help boost the country’s sustainable economic development.

By 2030, support products are to meet 70 percent of demand and account for about 14 percent of industrial production value. Some 2,000 companies are to be capable of supplying directly to assemblers and multinational corporations by 2030.

Vietnam recently put into operation a database of local processing, manufacturing, and support industries, with the aim of facilitating connections between Vietnamese suppliers and multinational corporations./.

https://en.vietnamplus.vn/dong-nai-seeks-ways-to-bolster-support-industries/190975.vnp

 

Category: Business, Vietnam

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