Supporting industries take the reins

March 29, 2019 | 16:00
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With global firms rushing into Vietnam in the era of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, there is an urgent need for the country to develop its own supporting industries.
supporting industries take the reins
Supporting industries take the reins, illustration photo

As one of the few local businesses operating in electronics solutions, Nguyen Dinh Quang, director of industrial trading hub KNK Vietnam, is upbeat for his business as the company recorded nearly 30 per cent growth and continues to see rosy results to the increasing demand.

“Vietnam is shining as the electronics hub of the region with an influx of investment. It has so far attracted billions in foreign direct investment from global giants including ­Samsung, Foxconn, LG, ­Panasonic, and Intel. We ­believe that our company can expand further as the ­development of the electronics industry moves on,” said Quang. “I believe any business that wishes to ­succeed must have a rapid and thorough response to global competition and tap ­opportunities – and Vietnam is no exception.”

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expected to boost many industries in Vietnam. Minister of Industry and Trade Tran Tuan Anh said that the country is entering a deep international ­integration period. This means the Vietnamese products participating in the global value chain will face competitive pressures from other countries. In particular, the context of globalisation and ­Industry 4.0 does not allow Vietnam to delay in ­improving competitiveness.

“The country’s supporting industries are determined to play the role of an essential foundation to ­improve the competitiveness of industrial products. With the CPTPP and also other free trade agreements (FTAs), Vietnam must speed up the pace and quality of the supporting industry’s ­development,” he stressed.

For instance, to reap the benefits of the CPTPP, the ­textile and footwear sector needs to develop a supporting industry to reduce reliance on the import of raw materials, ­enhance competitiveness and boost high-value exports. This is due to the fact the CPTPP sets strict requirements on product origin, a big challenge for Vietnamese enterprises in the textile and footwear ­sectors, as they are heavily ­dependent on material sources imported from China, India, and other ASEAN members.

Vietnamese exporters have been advised to continue ­promoting support industries, and ensure the origin of raw materials for production.

Echoing this view, General director of Misumi Vietnam Co. Ltd., Yasuo Shimokura, also stressed an urgent need for Vietnam to develop its supporting industries amid an uptrend in automation. “I believe that the demand for factory automation will ­increase dramatically in the coming decade,” he said. “Two key factors support this view. Increased foreign direct investment (FDI) and higher labour costs support our vision of a dramatic shift towards ­factory automation in the next decade.”

Deputy managing director of Reed Tradex Co., Ltd., ­Suttisak Wilanan said, “As FDI flocks to the country, the ­supporting industry sector will keep their footing and create more added value.”

Managing director of Thailand’s Hexagon Metrology Ltd., Taveesak Srisuntisu, said that to prepare for the CPTPP and others, the company has a plan to expand its business both in domestic and international markets. For foreign markets, Hexagon also ­oversees those of Cambodia, Vietnam, Laos, Myanmar, the Philippines, and Pakistan.

“Out of these markets, the outstanding one is Vietnam. Here, automotive and industrial parts-makers are investing heavily in manufacturing ­factories where Hexagon has provided products and ­technologies tailored to ­manufacturer requirements. The company has a long-term plan to constantly expand this market base and strengthen the Hexagon brand both in Hanoi and Ho Chi Minh City,” Srisuntisu said.

In the same vein, Shimokura added, “I believe that Misumi Vietnam can be a tool for the Vietnamese ­manufacturing industry – not only as a source for the latest manufacturing products, but also as an information centre, as we compile the thoughts and opinions of many engineers and designers from around the world.”

“As one of the priority ­industries, it is a major concern whether the Vietnamese ­automobile manufacturing ­industry can latch onto the upcoming opportunities,” added Wilanan of Reed Tradex. “The industry is a hi-tech one, and is a driving force for many other ­supporting ­industries, such as mechanics, electronics, ­plastics, rubber, glass, ­informatics, and ­automation.”

By Phuong Thu

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