Prime Minister Nguyen Xuan Phuc has requested that private industrial firms be developed, with a focus on innovative startups and the support industry.
Chairing a conference in Hanoi on December 19 to discuss measures promoting Vietnam’s support industry, the PM lauded the positive results of the domestic support industry so far, including ensuring the local content rate at 40-45 percent in the apparel, leather, and footwear industry; 10-20 percent in nine-seat auto manufacturing and assembling; and 15 percent in electronics and informatics.
As there are currently only 23 certificates of preferential treatment for projects manufacturing products in the support industry, he asked the Ministry of Industry and Trade to review and issue better support policies.
Based on lessons learnt from Japan and the Republic of Korea, the leader expressed his hope that Vietnam will become a workshop for the ASEAN bloc, Asia, and on a global scale.
He urged firms to pay more attention to research and development, while the Ministry of Planning and Investment and the Ministry of Finance must allocate capital to build three technical centres for support industry development.
According to him, Vietnam has set the goal of developing highly competitive industrial products by 2020; meeting 45 percent of demand for domestic manufacturing and consumption, accounting for nearly 11 percent of the industrial manufacturing value; and having about 1,000 enterprises capable of supplying products to manufacturing firms and multinational corporations nationwide.
By 2030, the support industry is expected to meet 70 percent of demand for domestic manufacturing and consumption, making up roughly 14 percent of the industrial manufacturing value, while around 2,000 businesses will supply products to assembling and multinational corporations across the country.
The leader also called attention to developing the industrial workforce in the context of the Fourth Industrial Revolution.
Participants shared the view that the support industry in Vietnam remains weak. There are over 3,000 support industry firms nationwide – 1,800 of which manufacture spare parts, and more than 1,500 produce materials for garments, leather, and footwear.
Minister of Industry and Trade Tran Tuan Anh attributed the weakness of the support industry to its heavy reliance on imported spare parts, resulting in the low added value of the manufacturing and processing industry.
Among the 1,800 domestic spare part manufacturers, over 300 have joined the manufacturing chains of multinational corporations, much lower than those in other countries. Though manufacturing and processing accounts for 90 percent of manufacturing and trade revenue, it only contributes to nearly 15 percent of the gross domestic product (GDP), lower than the 20 percent in ASEAN, 26 percent in Thailand, 22 percent in Cambodia, and 36 percent in China.
