Supporting industry firms anticipate high 2021 growth

Supporting industry enterprises are witnessing huge opportunities from Vietnam joining free trade agreements - Illustrative image (Photo: VNA)

Hanoi - Supporting industry enterprises are witnessing huge opportunities from Vietnam joining free trade agreements and more capital flowing into the country.

According to the Government’s master plan on the development of supporting industries to 2020 and vision to 2030, Vietnam will develop three key areas: spare parts, supporting industries for leather, footwear, and apparel, and high-tech industry.

Resolution No 115/NQ-CP on supporting industry development measures contains a goal that, by 2030, the local supporting industry will meet 70 percent of demand in domestic production and consumption and account for around 14 percent of industrial production value. Some 2,000 firms will be capable of directly supplying items to assembly enterprises and multinational groups in the country.

To meet the goal, the Government has set out seven measures to develop supporting industries, including fine-tuning mechanisms and policies, ensuring and effectively pooling resources for supporting industries, financial and credit solutions, developing domestic value chains and markets, improving the capacity of supporting industry enterprises, and building statistics and data.

As Vietnam has joined the Regional Comprehensive Economic Partnership (RCEP) and other free trade agreements, demand for production and trade as well as links between domestic and foreign firms are substantial.

Chairman of the Hanoi Supporting Industries Business Association Nguyen Hoang said that, over recent years, many supporting industry enterprises have supplied items to major multinational groups and foreign businesses in Vietnam such as Canon, Samsung, Toyota, and Honda, and also exported to partners worldwide.

General Director of the Hikari Vietnam Production and Trading Company Ltd, Nguyen Duc Cuong, said most firms have faced difficulties, both directly and indirectly, due to COVID-19. These may continue this year but positive signs remain as Vietnam’s economy is growing, thus making it easier for the country to attract foreign investment and offer opportunities to domestic companies.

If domestic supporting industry enterprises can seize the opportunities, they could quickly join global supply chains, he said.

Meanwhile, a representative from the Century Synthetic Fiber Corporation said orders from manufacturers in the Republic of Korea, Thailand, Japan, Taiwan (China), and the US, as well as foreign companies in Vietnam, have increased since last year thanks to disrupted supply chains in China caused by COVID-19.

Cuong believes that only enterprises with long-term business plans, good governance, and strong links will prosper.