The role of localities is very important
With many efforts from the Government, the Ministry of Industry and Trade and other ministries and branches, along with the initiative from enterprises, in recent times, Vietnamese supporting industry enterprises have increased their participation in the supply chains of multinational corporations, and the supply capacity of enterprises is no longer a concern as in previous years.
In particular, the model of cooperation in developing supporting industries between the Central Government, local authorities and leading enterprises is one of the typical cooperation programs that the Ministry of Industry and Trade has implemented, recording many positive results. A number of enterprises have successfully applied the innovation model, improved production efficiency, gradually approached and met the strict standards of the global value chain. Participating in the program, localities have also shown a more active role in supporting and accompanying enterprises.
Mr. Pham Tuan Anh - Deputy Director of the Department of Industry, Ministry of Industry and Trade - shared at the seminar "Creating attraction for supporting industry: The role of localities" recently organized by Industry and Trade Magazine, some localities with great potential for developing supporting industries such as Hanoi, Ho Chi Minh City, Thai Nguyen, Bac Ninh, Bac Giang, Hai Phong... in the recent past, on the basis of the general policies of the Central Government, have proactively issued policies for their own localities. These policies mainly focus on some contents such as supporting businesses in training human resources, helping businesses access the global production chain.
For example, Ho Chi Minh City has recently (before 2024) had a policy for priority projects to borrow capital by subsidizing interest rates. On July 19, 2024, the Ho Chi Minh City People's Committee also issued Decision No. 42/2024/QD-UBND on implementing the interest rate support policy for investment projects in priority areas of socio-economic development in the area.
The interest rate subsidy policy has also been included in the draft Decree amending Decree No. 111/2015/ND-CP to support businesses.
“From the Ministry of Industry and Trade’s perspective, the initial step is for localities to implement, and the role of localities is very important. Regarding local investment attraction policies, there should also be constraints on investors. When they enjoy preferential policies, they must also be responsible for Vietnamese enterprises. For example, for a certain period of time, a number of Vietnamese enterprises can participate in providing products for FDI enterprises . This is a content that localities should pay close attention to,” Mr. Tuan Anh emphasized.
Strengthening the capacity of local businesses
From a business perspective, Mr. Nguyen Trung Hieu - Head of Business Planning Department of Toyota Vietnam Automobile Company - highly appreciated the role of the Ministry of Industry and Trade's orientation and the very active participation of local departments, branches and sectors.
Evidence shows that Vietnamese supporting industry enterprises have significantly improved in both quality and quantity in recent times. In terms of quantity, from the initial assessment that there were more than 300 Vietnamese enterprises achieving ISO/TS 16949 certification, however, up to now, this number has reached over 500. In terms of quality, Vietnamese enterprises have gradually shifted in not only producing components with low technology content and only focusing on the strengths of cheap labor, but have advanced to higher levels of components requiring higher technology, such as stamping and forging, or components for new car models. In addition, the management level of the leadership class, awareness of improving competitiveness in quality, cost, and delivery capacity has also been raised significantly.
In addition, the cooperation programs between Toyota, the Ministry of Industry and Trade and localities in recent times have become a highlight in the development of the supporting industry in Vietnam, contributing to improving the capacity of businesses in localities.
Mr. Hieu said that Toyota Vietnam has had a long-term cooperation program with the Ministry of Industry and Trade. This year is the fourth year this program has been implemented with recorded results.
Specifically, some units have reduced inventory by up to 59% and saved nearly 4,000 m2 of factory space. Thus, they can save a lot of money in paying for factory space rental costs or can increase their capacity and output without having to invest more. Some units have eliminated dozens of tons of unnecessary equipment and some units have even increased labor productivity by more than 70%.
As one of the enterprises producing aluminum profiles for industry and construction, successfully participating in the supply chain with a large-scale factory system in Bac Ninh, Mr. Duong Minh Hai - Production Director of KIMSEN Industrial Joint Stock Company - highly appreciated the policies and practical activities of state management agencies and partners that the Ministry of Industry and Trade has linked up with, which are activities that help KIMSEN in the period when the company is transforming to participate in the supporting industry sector.
"Up to now, KIMSEN's products have been supplied to multinational corporations, FDI companies operating in Vietnam and exported. Up to now, about 50% of our output is for direct export activities and domestic FDI enterprises" - Mr. Duong Minh Hai, Production Director of KIMSEN Industrial Joint Stock Company, informed.
And Mr. Hai added: "In addition to consulting on site improvement, we also receive support from the Industrial Development Center, Department of Industry, Ministry of Industry and Trade in training engineers and experts in the field of design, mold manufacturing, programming CNC programs, and products requiring high precision."
