Manufacturers blame weak supporting industries on small market scale

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VietnamNet English - 70 month(s) ago 13 readings

Manufacturers blame weak supporting industries on small market scale

VietNamNet Bridge – The supporting industries in Vietnam have not made any considerable progress over the last tens of years, since the day it realized the importance of the supporting industries and vowed to develop them, despite a lot of investment incentive policies.

Takanori Yamashita, General Director of Fujitsu Computer Company Vietnam, which has been making electronic circuits in Vietnam for the last 16 years, said Fujitsu has been looking for domestic accessory suppliers for the last 16 years, but it has not found yet.

“We want to buy materials in Vietnam and develop our production in Vietnam. However, to date, we still have to import everything. This shows that Vietnamese supporting industries in the electronics sector in Vietnam have not developed,” he said.

Dong Nai is considered the leading locality in Vietnam in terms of the number of supporting industries enterprises with 588 enterprises. However, the products of the enterprises are mostly half-finished products, paper-made and wood-made packages, stationary and raw materials, while high quality accessories, parts and materials are all the imports.

Tran Van Tuan Anh, Production Director of Vikyno & Vinapro, an agriculture machine manufacturer, said that the State needs to define the priority fields for development, in which Vietnam would make heavy investment to create key industrial products and join the global value chain. He said Vietnam should not disperse its resources by investing in all industrial sectors

Anh said that Vietnam is now a lucrative market for foreign producers, especially China, to exploit. If Vietnam neglects the control over the imports, low quality products would penetrate the market, which means that Vietnam would never be able to develop the supporting industries in the mechanical engineering sector.

Policies or markets to blame?

In July 2007, the then Ministry of Industry, now the Ministry of Industry and Trade, released the Decision No. 34, approving the supporting industries development plan by 2010 with the vision until 2020.

In February 2011, the Prime Minister released the Decision No. 12 on some policies to develop supporting industries.

However, Truong Thi Chi Binh, a senior official of the Ministry of Industry and Trade, said that in 2012 the ministry would have to issue a new plan on supporting industry development, because the 2007 plan has become out of date.

Meanwhile, commenting about the Prime Minister’s Decision No. 12, Bo Ngoc Thu, Director of the Dong Nai provincial Planning and Investment Department, said as the regulations are vague, it has not helped much.

Binh said the decision in 2011 discouraged enterprises in the supporting industries because they could not find any new support policies, except the policies applied to small and medium enterprises.

According to Binh, Vietnam has succeeded only in developing supporting industries for the motorbike sector. And this has been explained not by the good policies, but by the big Vietnamese market capacity.

Honda, which saw the high demand of the market, has lured many accessory manufacturers to Vietnam when it decided to set up a production base in Vietnam. This has allowed the motorbike manufacturer to use domestically made parts and accessories and gradually increase the locally made content ratios in its products.

It’s clear that the big market capacity would help develop supporting industries. In this case, the supporting industries for motorbike manufacturing had begun developing before the State set up support policies. 95 percent of motorbike parts are made in Vietnam, while there are 500 enterprises, both foreign invested and Vietnamese, are providing parts to Japanese motorbike manufacturers.

Source: TBKTSG

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