Training courses: A worker assembling an electric motorbike at a factory in Hanoi. Local authorities and foreign companies have been collaborating to enhance the quality of the workforce and improve the competitiveness of the domestic support industry. — AFP
HO CHI MINH: Vietnam’s supporting industries play a crucial role in the development and competitiveness of key sectors, receiving substantial government investment.
According to Vietnam’s General Statistics Office, the supporting industry boasts around 5,000 businesses nationwide, with priority export markets being South Korea, Japan, China and the United States.
To enhance this sector, a national 2016 to 2025 programme has focused on local firms fostering connections with clients and attracting foreign investment.
It also assists Vietnamese businesses in applying international-standard management systems, workforce training and accessing market information to improve their integration into global supply chains.
Financial assistance is provided for the industries on the List of Priority Supporting Industry Products, including preferential interest rates on loans.
There is substantial support for research and development (R&D), including up to 50% funding for pilot production of supporting industry products.
Projects with R&D facilities can also receive land leases with favourable rent.
Additionally, the Industry and Trade Ministry (MoIT) has established industrial development centres in three regions of Vietnam to support businesses and the supporting industry.
Vietnam’s free trade agreements enable businesses to expand export markets, reduce tariffs and enhance international competitiveness.
Deputy director of Hong Ky Mechanical Company Nguyen Duy Toan said the country’s supporting industry is growing rapidly.
“In the past, the industry was not developing. However, the government’s support policies and investment have made it grow.”
He said foreign companies such as Samsung Electronics, LG and Apple have created strong demand for Vietnam’s supporting industries.
In addition, he said the skills and knowledge of Vietnam’s workforce are improving, helping strengthen the industry’s future.
His company has obtained several international certifications, which help it access European and US markets.
It manufactures electronic welding machines, steel processing machines and other industrial support products, and has exported to Germany, Turkiye and Australia.Toan’s company is leveraging trade agreements like the CPTPP, APTA for Asean countries and EVFTA, an agreement between Vietnam and Europe, reducing tariffs on goods exported from Vietnam.
Other businesses, such as TBM-Minh Phat Producing-Trading Co Ltd, which manufactures moulds and processes plastic products for medical, technical, interior and food packaging purposes, also align with global standards.
Its products are mainly exported to Japan, the United States, South Korea and the Netherlands.
The company’s ISO system, which is checked by Japanese customers annually, focuses on environmental issues, factory management and export goods management.
Product quality is inspected and managed using the Kanban system and Japanese methods.
His company enjoys zero import tax when exporting to Japan under AANZFTA and uses certificates of origin for other trade agreements, including the United States market.
Factory director Tuong Lai Co Ltd Le Dang Quoc said that to meet the growing global demands for supporting industries, Vietnam’s Industry and Trade Ministry, along with other departments and organisations, is providing comprehensive programmes.
The company specialises in custom-manufacturing rubber and technical plastic products for the automotive, motorcycle and supporting industries.
It has significant export markets in the United States, Canada and Japan.
Vietnamese authorities and international organisations have been collaborating to enhance the quality of the workforce and improve the competitiveness of the domestic support industry.
Tuong Lai participated in these initiatives, sending employees to training courses offered by the World Bank, Samsung and JICA.
Several companies are ensuring that their staff update their skills in cutting-edge technologies through these programmes to keep pace with market demands, Quoc said.
These programmes aim to help Vietnamese businesses enhance their knowledge, adopt modern technologies, and optimise operations.
In addition, Tuong Lai received strong support from local authorities, including information about international exhibitions and opportunities to connect with multinational partners to better understand market trends and demands, he added.
He also said that government trade promotion programmes and initiatives to promote Vietnamese products abroad contribute to raising product awareness and finding new business partners.
Several expos were held this year to promote and boost the growth of support industries in Hanoi and Ho Chi Minh City, such as the 2024 Sourcing Fair of Supporting Industry with Buyers, the VINAMAC Expo 2024 and the Supporting Industry Show 2024.
These exhibitions have helped connect hundreds of domestic businesses with those from more than 15 countries and territories, facilitating partnerships and knowledge exchange.
In addition, Vietnam has implemented tax incentives for supporting industries in the automotive sector to boost domestic production, increase localisation rates and enhance competitiveness.
Accordingly, domestic auto parts manufacturers enjoy a 0% import tax rate on imported raw materials, supplies, and components that businesses can not produce domestically.
These efforts support industry growth, helping local businesses integrate into global value chains and boost their competitiveness. — Viet Nam News/ANN
