Industrial growth: Workers in VinFast’s car factory in Hai Phong City, Vietnam. The government is set to offer help to businesses supplying major manufacturers. — Reuters
HANOI: The Industry and Trade Ministry has proposed policies to support enterprises that supply parts and materials for garments and textiles, footwear, and electronics manufacturing, automobile production and assembly and mechanical engineering.
The proposed support policies, including an interest rate subsidy of 3%, are expected to create stimulus to part-supplying enterprises to improve their competitiveness and better prepare them to participate in the supply chains of multinational corporations (MNCs).
The support would include corporate income tax incentives, support in investment promotion, human resource training, research and development, technology application, renovation and transfer and credit support to enable domestic enterprises to become suppliers of MNCs, according to the ministry.
An interest rate subsidy of 3% would be provided from the central budget through commercial banks for medium and long-term loans in Vietnamese dong to invest in parts-supplying projects.
The duration of the credit support would be equal to the lending duration but not exceeding 10 years from the date of signing the loan contract. The policy would be applicable to loans which would be signed and disbursed till the end of 2030.
The priority would be given to sectors including garments and textiles, footwear, electronics, automobile production and assembly, and mechanical engineering, besides others, including mould making, high-quality mechanical parts for electronics, mechatronics, microelectronics, robots, electronic and optoelectronics components, circuits and new materials.
The ministry estimated there are about 5,000 enterprises operating in the parts-supplying industries eligible for the support and it is necessary to amend a decree about helping support industries in the current context so that local parts-supplying enterprises can keep up with the pace of integration in the world.
According to Pham Tuan Anh, deputy director of the Industry and Trade Ministry’s Industry Department, the department would continue to advise the government on policies to attract investment into supporting industries.
Statistics from the Vietnam Association for Supporting Industries showed that the procurement rate for locally sourced materials and parts remained low, around 5%-20% for the automobile manufacturing industry, 5%-10% for electronics, 30% for footwear, 30% for garment, 1%-2% for high-tech industry in 2022.
To promote the growth of support industries in Vietnam, the government issued a resolution for the 2022-30 period which set the goal of products from local support industries meeting 70% of the country’s demand and accounting for 14% of industrial production by 2030. — Viet Nam News/ANN
