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Government urged to help boost support industries
A senior official at the Ministry of Industry and Trade says that support industries need more help from the Government.
Viet Nam did not create preferential conditions for enterprises wishing to invest in support industries, said Ngo Van Tru, Deputy Director of heavy industry department at the Ministry of Industry and Trade. The tariff system did not benefit the economy, he added.
Support industries were particularly important in a country that is relatively undeveloped technologically, he said, adding that foreign investors were unwilling to produce accessories and spare parts in Viet Nam because there was insufficient incentive.
Matthias Duhn, Managing Director of the European Chamber of Commerce (EuroCham), said foreign companies in Viet Nam could not rely on cheap labour and the outsourcing of parts assemblage in the long term.
He added that cars for example required on average 40,000 spare parts, few of which could be manufactured in Viet Nam. Thailand, he said, in comparison was far ahead of Viet Nam in terms of support-industry infrastructure.
Duhn said Viet Nam should focus on industries in which it was traditionally strong, such as textiles and footwear.
Keisuke Kobayashi, Project Director at the Japan External Trade Organisation (JETRO), said Japanese firms encountered difficulties when trying to buy accessories in Viet Nam.
Kobayashi said the Government should make preferential loans available to SMEs to buy machinery, provided they were financially sound.
If support industries were developed, they could help businesses reduce prices, production costs and therefore competitiveness. Cho Bong Jin, General Director of Doosan Heavy Industry Viet Nam Company, said Viet Nam was weak in terms of support industries.
Most enterprises had to import accessories and spare parts from other provinces or overseas, a situation made worse since Viet Nam joined the World Trade Organisation, Cho said.
Nguyen Thi Thuy Mai, Deputy Director of the Da Nang Industry and Trade Department, said that if support industries were not encouraged to develop, manufacturers would relocate to other countries.
The Government should invest in technology and training, she added.
Le Van Dung, Deputy Head of the Dung Quat Economic Zone, said support industries for large-scale projects in oil refinery, shipbuilding, mechanical engineering and steel rolling should be developed.
In the long term, he said provinces should strive to attract investment and develop infrastructure in seaports and airports, in addition to making funds available to businesses which finance support industries.
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