Vietnam Supporting Industries Fail to Meet Local Demand

Vietnam’s supporting industries still lag behind to meet the increasing demand of local manufacturing businesses, particularly foreign-invested ones, said a local official.

Phan Dang Tuat, director of the Ministry of Industry and Trade’s Industrial Policy and Strategy Study Institute, said Vietnam licensed 6,963 foreign-owned industrial manufacturing projects by end-April, but the majority of them have to import raw materials and components.

Managing Director of the Japan External Trade Organization (JETRO), Ho Chi Minh Office, Yoshida Sakae said around 1,200 Japanese companies are now active in Vietnam, with half of this operating in the industrial manufacturing sector.

However, Japanese manufacturers can buy just 25% of supporting industrial products from Vietnamese firms and they have to import the rest, the director said, adding that Thailand can meet 65% of Japanese investors’ demand, and the rate in India, Indonesia and Malaysia is 45% each.

The Vietnamese government should work out an overall plan to develop supporting industries which are facing a fierce competition from foreign rivals.

Localities need allocate areas, especially at key economic regions, for businesses to develop the industries.

Earlier, the Japanese government has pledged to fund $175 million to help 100 Vietnamese small and medium enterprises in manpower, technique and finance to develop supporting industries, state media said. – Vietnam Economic Times

Tags: Vietnam industries, Vietnam industry