Vietnamese supporting industry confidently enters global supply chains

There are now 2,000 Vietnamese enterprises in the supporting industry, 300 of which are members of multinational supply chains, showing great efforts of the country to promote this industry.

Employees in Cathaco are on duty to make supporting products for Konica Minolta (Photo: SGGP)

One day right before the 2024 Tet holiday, about 1,200 employees in Cat Thai Manufacturing and Trading Co. Ltd. (Cathaco) were still busy working on their assembly lines. Cathaco’s General Director Nguyen Tuan Anh shared that just at the beginning of this year, his company received several ‘best-seller’ certificates from Foreign Direct Investment (FDI) corporations like Schneider Electric, Konica Minolta, Colgate Palmolive, Toshiba, and Aqua. Cathaco is formally recognized as a comprehensive strategic partner of Schneider Electric and Konica Minolta.

Cathaco’s key products are hi-tech plastic parts, new and recycled plastic pellets, rubber details, plastic molds, metal details, mechanical processing (cutting, drilling), industrial solutions, hardware design and software development. After 25 years of operation, the company is able to provide various types of supporting-industry products, be they simple parts or multi-detailed components with high added value.

“To become a strategic partner to large FDI businesses in the world, our company has established a supply chain capable of manufacturing more than 300,000 products to different enterprises”, said General Director Nguyen Tuan Anh.

Another successful case is CNS Amura Precision Co. Ltd., which focuses on the four fields of automotive technology, applications in the electrical and electronics industry, healthcare, and food packaging. Its General Director Tran Thanh Lam informed that with thousands of available product types, his company is processing orders of famous partners from Japan and Europe as well as domestic FDI enterprises.

Particularly, CNS Amura Precision Co. Ltd. has cooperated with its Japanese partner to research and create new plastic products specifically for decoration purposes in convenience stores and supermarkets in Japan. It is expected that this major market will place even more orders in the upcoming years.

At present, the company is enjoying an increase of 32 percent in its annual order revenues. It is expanding its markets to Australia, Germany, New Zealand, Austria, Japan, Monaco, and the US.

Nhat Minh Design and Manufacture Co. Ltd. specializes in supporting products for the electrical-electronic and automobile industries. Its Director Huynh Van Teo shared that his organization is working with the supplier of the stamping production line for ISGEC, while also providing metal tools like drill bits, cutting pieces, tool handles, measuring tools for various FDI corporations such as Mitsubishi, Okazaki, Magafor, Nidec, and Fuji Seiko.

Since 2018, when the company renovated its manufacturing technologies and administration, the quality of its products has been quite stable, and thus increasing both its orders and prestige in the global supply chain thanks to the competitive prices and high product quality it is offering.

CNS Amura Precision Co. Ltd. is focusing on supplying plastic products to its Japanese partners (Photo: SGGP)

Obviously, domestic businesses in the supporting industry are extremely confident in processing orders for FDI companies located in the country and in the world as well. “To illustrate, right after the HCMC Center for Supporting Industries Development (CSID) had announced a list of 400 highly-sought supporting products of FDI companies in October 2023, more than 300 Vietnamese enterprises contacted to offer samples. The result is 100 successful contracts between these companies and FDI businesses in need”, informed CSID’s Deputy Director Le Nguyen Duy Oanh.

Then when the leaders of HCMC organized a trade promotion visit to Japan for supporting enterprises in the city to join in the largest annual trade fair of this industry, the displayed samples of Vietnamese companies attracted much interest of international purchasers. Many Vietnamese participants in the fair shared that their companies are highly competitive even when entering strict markets like the Republic of Korea, Japan, the US, or Europe.

Market expansion helps domestic businesses in the supporting industry to diversify their clients, better exploit the added values of their merchandise, avoid order reduction due to supply chain disruptions, and become more mature when being able to satisfy new global standards. This is especially true as these companies can only sell products under the Business-to-Business (B2B) model.

In 2023, all companies in the supporting industry welcomed precious chances to expand their market shares as more than 1,000 FDI businesses and international purchasers visited HCMC to seek suppliers. This is the fruitful result of the efforts of domestic supporting enterprises in raising the overall prestige and carrying out multiple researches for more competitive and higher-quality merchandise in order to successfully enter global supply chains.

Statistics reveal that at present, about 5 – 10 percent of the total 2,000 businesses manufacturing mechanical parts and plastic molds possess exporting advantages when entering the markets of the US, Japan, and the Republic of Korea. These businesses are also the level-1 suppliers for FDI corporations making end-products in the nation.

In HCMC alone, the supporting industry has always accounted for a high proportion in the city’s economic growth structure. Since 2016, the development rate of businesses in this industry here has been 7.83 percent on average, showing their strong determination to flourish in the long term.

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