VIETNAM: According to the Ho Chi Minh City Department of Industry and Trade, for the first 10 months of 2018, the production index of electronic goods has increased by more than 17 percent and the overall industrial production index (IIP) has grown by 7.85 percent. Similarly, within the same timeframe, export turnover of computers, electronic products and components reached US$7.94 billion. This is an increment of 17.6 percent year-on-year and accounts for more than 30 percent of total export value, excluding crude oil.
This can be attributed to rise in consumer demands and the growth in investment in semiconductors, chip technology and electronic boards. Furthermore, to compete with imports, companies have began investing in machinery and technology to produce outputs for supporting industries.
However, despite positive results, Trần Quang Hà, deputy head of the Ministry of Industry and Trade’s Industry Department, has commented that the supply capacity of companies in supporting industries was still limited. This can be seen in the case of Samsung, whereby out of the 200 supplies, only 35 Vietnamese enterprises are level-1 suppliers, with the remaining suppliers being foreign enterprises. Additionally, Vietnamese enterprises mostly supply packaging with simple details while the more complex supplies are provided from foreign enterprises.
A trend that is also reflected in the case of Panasonic whereby only three out of the company’s 40 supplies are Vietnamese enterprises. Similarly, of 40 suppliers for Panasonic Việt Nam, only three are solely Vietnamese enterprises whose supply orders account for less than 10 per cent of the total value of input components.
Meanwhile, Lê Nguyễn Duy Oanh, deputy director of the city’s Centre for Supporting Industry Development, has reinforced the importance of encouraging enterprises to be more engaged in the supply chain of FDI enterprises. This follows the government’s launch of investment stimulus programmes that are aimed at facilitating enterprises in attaining capital access, meeting training requirements, investing in modern machinery and equipment, expanding production, and improve the quality of their products, among other benefits.
Châu Bá Long, General Director of Minh Nguyên Corporation has commented that participating in the government’s Sustaining Competitive and Responsible Enterprises (SCORE) programme as well as other initiatives had served to benefit his enterprise with more skills and the company has become a level-1 supplier to Samsung, which has led to a 12 fold increase in its revenue.
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