Clouds are breaking for local supporting industries

The supporting industries are looking at a fortuitous constellation of encouraging factors Photo: Dung Minh

The potential in the area was stressed at a digital workshop on business initiatives under the theme of guerrilla business in the digital age. The workshop was held on June 10 by Thai-backed Reed Tradex Vietnam in collaboration with the Vietnam Electronic Industries Association (VEIA) and PR Newswire, a global provider of news release distribution and media monitoring services.

Vu Trong Tai, general director of Reed Tradex Vietnam and organiser of the annual electronics fair NEPCON Vietnam, said that 2020 marks an important milestone for the Vietnamese electronics business community with many obstacles in the way. Tai said the pandemic has created turmoil in the market, which left many companies in a tough position due to lack of input materials and new orders.

“However, there will be several changes in the coming time with the strong progress of 5G and the manufacturing relocation to Vietnam. The Made-in-Vietnam automobile plan from VinFast has made great strides. All of these factors, coupled with the upcoming implementation of the EU-Vietnam Free Trade Agreement, will create new driving forces for Vietnam’s electronics and supporting industry firms to join the global supply chain,” Tai explained.

According to data from the Ministry of Industry and Trade, the total number of enterprises currently involved in the supporting industry sector is more than 600. However, the number of domestic enterprises in the supporting industries of electronics is fewer in number due to the internal constraints of enterprises, and also the limitations of understanding between the two sides.

Therefore, the connection between foreign-invested enterprises and domestic counterparts is very necessary, and industry leaders said businesses need to step up their game as quickly as possible to overcome the global health crisis and capitalise on the opportunities.

Nguyen Thi Xuan Thuy, deputy director of the Ministry of Industry and Trade’s Industrial Development Centre, said that electronic businesses have strived to sail through the tough period. Businesses highly appreciate the government’s relief measures and supporting policies to counter the impact of the pandemic, such as delaying tax payments, reducing interest rates, and cutting land rent.

However, around 10 per cent of firms did not know about the supporting policies and 50 per cent did not know how to apply for them. It is clear more communication is required to bring the policies into life and create real benefits for businesses.

A survey on Vietnamese electronic firms after COVID-19 showed that 58 per cent of such groups will need more than a year to return to normal manufacturing activities after the crisis subsides. Three-quarters of electronics businesses, meanwhile, need innovative solutions and consulting advice as a result. About 46 per cent of electronic businesses care about effectiveness, and 34 per cent care about costs when participating in trading activities after the pandemic.

Therefore, the workshop on business initiatives for the year have been seen as crucial to helping electronic firms gain information to overcome difficulties, recover from the crisis, and improve productivity. It is also an ideal platform for businesses to connect with each other and create stronger supply chains in Vietnam.