Vietnam is facing a great opportunity to develop its supportingindustry. However, proposals are needed regarding the best ways to takeadvantage of opportunities. Certainly, efforts of the government as wellas Vietnamese businesses are vital, the Communist Party of Vietnam(CPV) Online Newspaper said.
This is the theme of the 10thsupporting industry forum, titled “How to develop the supportingindustry in Vietnam” held on May 22 by the Japan External TradeOrganisation (JETRO), the Investment & Trade Promotion Centre of HoChi Minh City (ITPC) and Reed Tradex company.
Hirotaka Yasuzumi,Managing Director of the JETRO office in Ho Chi Minh City, said in 2013,total direct investment capital of Japanese enterprises licensed inVietnam was 22.4 billion USD, with 500 projects, accounting for 26percent of total FDI. The figures show that Japan is still the largestinvestor. Japanese companies continue to be highly active in Vietnam.
Adifficulty for Japanese companies is the shortage of supportingindustries in the domestic market. A 2013 JETRO Survey showed that theproportion of domestic supply for the Japanese companies was less than32 percent in Vietnam compared to 64 percent in China and 53 percent inThailand. Over the past ten years, JETRO has attempted to improve thesector through trade exchanges and exhibitions for supporting industrybut it has not improved significantly.
Bui Quang Hai,representative of the Ho Chi Minh City Association of MechanicalEngineering (HAME), shared that Vietnam’s manufacturing enterprises onlymeet 11 percent of the needs of Japanese companies in Vietnam.
Inrecent years, Vietnam’s export of electronic products, computers andphones has achieved high revenue and increased to double digits, butthese are products from FDI enterprises. Imports account for 58 percentof Vietnam’s total export value. This equates to about 40 billion USD ofmanufactured technology products. Phone components alone stand atalmost 20 billion USD. These imports come mainly from China.
Manyenterprises admit that their operations depend on materials sourcedfrom abroad. “Currently, we are facing opportunities with Japan to buildan industrial cooperation strategy between Vietnam and Japan through2020 with a vision to 2030. In this regard, six industries stand out,including electronics, agricultural and agricultural product processingmachines, environment, energy saving, shipbuilding and automotive partsmanufacture,” said Hai.
More specifically, Hirotaka Yasuzumi saidthat this year JETRO plans to cooperate between private enterprises andthe relevant state agencies for the development of supportingindustries. The organisation has promoted technological transfer toVietnamese enterprises by encouraging development of human resources andestablishing close ties with Japanese companies.
DuangdejYuaikwarmdee, Deputy Executive Director of Reed Tradex Company, whichhas co-hosted the supporting industry forum over the past ten years,commented that Vietnam is now an attractive investment destination forinternational manufacturers in the fields of automotive, electronics andsupporting industries. Japanese companies are continuing to expandtheir production capacity in the domestic market in the near future.Finding suitable partners for business cooperation will also help tostrengthen Vietnam’s industry and achieve long term profitability.
Garmententerprises tend to be largely dependent on importing raw materialsfrom China, which does not participate in the Trans-Pacific PartnershipAgreement (TPP). These companies are searching for new import markets inorder to qualify for tax advantages when exporting to the US.
Chairmanof the Association of Garment-Textile-Embroidery-Knitting in HCM City(Agtex) Pham Xuan Hong said Agtex and its members are seeking rawmaterial sources within the country as well as countries participatingin the TPP. In the coming time, Agtex will send representatives toMalaysia to discuss cooperation with Malaysia’s Association of Textileand Garment with a view to exploiting the advantages of the businessesof the two countries.
“Since enterprises investing in Vietnam’smaterials sector are few we need to adopt policies to attract moreinvestment in this sector. There is a significant need for preferentialpolicies in capital and land-rent price for domestic enterprises toinvest in textiles and dye because the investment in these fields needs abig capital injection of thousands of billions of VND. Withoutpreferential terms, there will not be sufficient private enterprisewilling to borrow money for the relevant investment,” said Pham XuanHong.
According to the Chairman of the Board of Directors ofSaigon Garment Manufacturing Trading Joint Stock Company (Garmex) LeQuang Hung, the domestic textile sector has not kept up with the growthof the garment sector in recent times. Domestic garment enterprises likeGarmex have been searching for locally sourced raw materials to reducecosts, but many kinds of fabrics are not produced in-country. Meanwhile,most businesses in the sector are not sufficiently resourced in termsof capital and technology to produce raw materials for the garmentsector, especially the textile and dye sectors. Moreover, manylocalities don’t want to grant license to build dye factories due toenvironmental impact.
“When negotiating TPP, we must sacrificebenefits of some sectors to receive the export tax exemption for thegarment and textile sector. If we do not take advantage of theopportunity, it is insignificant to perform TPP, especially with regardto regulations on the origin of raw materials. Consequently, it isnecessary to have policies to develop the sector providing the garmentand textile materials clearly published from the Government,” Hung said.-VNA
This is the theme of the 10thsupporting industry forum, titled “How to develop the supportingindustry in Vietnam” held on May 22 by the Japan External TradeOrganisation (JETRO), the Investment & Trade Promotion Centre of HoChi Minh City (ITPC) and Reed Tradex company.
Hirotaka Yasuzumi,Managing Director of the JETRO office in Ho Chi Minh City, said in 2013,total direct investment capital of Japanese enterprises licensed inVietnam was 22.4 billion USD, with 500 projects, accounting for 26percent of total FDI. The figures show that Japan is still the largestinvestor. Japanese companies continue to be highly active in Vietnam.
Adifficulty for Japanese companies is the shortage of supportingindustries in the domestic market. A 2013 JETRO Survey showed that theproportion of domestic supply for the Japanese companies was less than32 percent in Vietnam compared to 64 percent in China and 53 percent inThailand. Over the past ten years, JETRO has attempted to improve thesector through trade exchanges and exhibitions for supporting industrybut it has not improved significantly.
Bui Quang Hai,representative of the Ho Chi Minh City Association of MechanicalEngineering (HAME), shared that Vietnam’s manufacturing enterprises onlymeet 11 percent of the needs of Japanese companies in Vietnam.
Inrecent years, Vietnam’s export of electronic products, computers andphones has achieved high revenue and increased to double digits, butthese are products from FDI enterprises. Imports account for 58 percentof Vietnam’s total export value. This equates to about 40 billion USD ofmanufactured technology products. Phone components alone stand atalmost 20 billion USD. These imports come mainly from China.
Manyenterprises admit that their operations depend on materials sourcedfrom abroad. “Currently, we are facing opportunities with Japan to buildan industrial cooperation strategy between Vietnam and Japan through2020 with a vision to 2030. In this regard, six industries stand out,including electronics, agricultural and agricultural product processingmachines, environment, energy saving, shipbuilding and automotive partsmanufacture,” said Hai.
More specifically, Hirotaka Yasuzumi saidthat this year JETRO plans to cooperate between private enterprises andthe relevant state agencies for the development of supportingindustries. The organisation has promoted technological transfer toVietnamese enterprises by encouraging development of human resources andestablishing close ties with Japanese companies.
DuangdejYuaikwarmdee, Deputy Executive Director of Reed Tradex Company, whichhas co-hosted the supporting industry forum over the past ten years,commented that Vietnam is now an attractive investment destination forinternational manufacturers in the fields of automotive, electronics andsupporting industries. Japanese companies are continuing to expandtheir production capacity in the domestic market in the near future.Finding suitable partners for business cooperation will also help tostrengthen Vietnam’s industry and achieve long term profitability.
Garmententerprises tend to be largely dependent on importing raw materialsfrom China, which does not participate in the Trans-Pacific PartnershipAgreement (TPP). These companies are searching for new import markets inorder to qualify for tax advantages when exporting to the US.
Chairmanof the Association of Garment-Textile-Embroidery-Knitting in HCM City(Agtex) Pham Xuan Hong said Agtex and its members are seeking rawmaterial sources within the country as well as countries participatingin the TPP. In the coming time, Agtex will send representatives toMalaysia to discuss cooperation with Malaysia’s Association of Textileand Garment with a view to exploiting the advantages of the businessesof the two countries.
“Since enterprises investing in Vietnam’smaterials sector are few we need to adopt policies to attract moreinvestment in this sector. There is a significant need for preferentialpolicies in capital and land-rent price for domestic enterprises toinvest in textiles and dye because the investment in these fields needs abig capital injection of thousands of billions of VND. Withoutpreferential terms, there will not be sufficient private enterprisewilling to borrow money for the relevant investment,” said Pham XuanHong.
According to the Chairman of the Board of Directors ofSaigon Garment Manufacturing Trading Joint Stock Company (Garmex) LeQuang Hung, the domestic textile sector has not kept up with the growthof the garment sector in recent times. Domestic garment enterprises likeGarmex have been searching for locally sourced raw materials to reducecosts, but many kinds of fabrics are not produced in-country. Meanwhile,most businesses in the sector are not sufficiently resourced in termsof capital and technology to produce raw materials for the garmentsector, especially the textile and dye sectors. Moreover, manylocalities don’t want to grant license to build dye factories due toenvironmental impact.
“When negotiating TPP, we must sacrificebenefits of some sectors to receive the export tax exemption for thegarment and textile sector. If we do not take advantage of theopportunity, it is insignificant to perform TPP, especially with regardto regulations on the origin of raw materials. Consequently, it isnecessary to have policies to develop the sector providing the garmentand textile materials clearly published from the Government,” Hung said.-VNA
