Supporting industry: Numerous investment attraction opportunities

(VEN) – There are numerous supporting industry development opportunities here in Vietnam. Many big foreign direct investment (FDI) projects are coming to the country. This will increase the number of such opportunities.

The government of Vietnam issued policies encouraging supporting industry developmentThe government of Vietnam issued policies encouraging supporting industry development

Coming to Vietnam early, Honda Vietnam opened its first factory in the country in March 1998 in Phuc Yen in Vinh Phuc Province. The local content rate of Honda Vietnam products has reached 93-97 percent. About 150 businesses with about one million employees are making components for Honda Vietnam.

The Samsung Electronics Vietnam Company Limited (SEV) set up shop in 2008 in Bac Ninh Province. SEV has 53 supporting businesses in Vietnam and is expected to reach a product’s local content rate of 40-60 percent in 2015. Reaching this rate will need SEV to have 150-200 supporting businesses in 2015. The company is expected to have about 300 supporting businesses with combined registered capital of US$1-1.2 billion after 2015.

Honda Vietnam and SEV stories show that there are big opportunities to invest in supporting industry in Vietnam. SEV intended to increase its investment capital in its Bac Ninh-based factory from US$1.5 billion to US$2.5 billion.

Apart from SEV, Bac Ninh accommodates large projects of world leading groups including Nokia, Canon, Foxconn, Sumitomo and others. These projects have a high demand for supporting industry products. The province is realizing many consistent solutions to attract investment in supporting industry, including application of preferential policies to businesses investing in this field, especially supporting businesses in the fields of electronics, high technology supporting businesses, and supporting businesses making components and devices for special use.

Bac Ninh said that it will improve workforce quality and simplify administrative procedures to increase investor’s comfort and develop a supporting industry in the province.

Many FDI projects have had or are preparing plans to invest in Vietnam. This will provide more opportunities to develop the supporting industry in the country. The US$2 billion-plus Samsung complex in Thai Nguyen Province is expected to increase its capital to US$3.2 billion. This project is expected to need several hundred supporting businesses as soon as it begins production.

Japan External Trade Organization (JETRO) Chief Representative in Hanoi Hirokazu Yamaoka said that the product’s local content rate is only 28 percent in Vietnam, 43 percent in Indonesia, 53 percent in Thailand and 61 percent in China.

In an attempt to increase the product local content rate, the Government of Vietnam issued policies encouraging supporting industry development, including Decision 34/2007/QD-BCN (referring to an overall plan for supporting industry), Decision 12/2011/QD-TTg (defining supporting industry), Decision 1483/2011/QD-TTg (defining supporting industries and products), Circular 96/2011/TT-BCT (referring to preferential policies for supporting industry), and Official Letter 9734/BCT-CNNg (referring to procedures to register preferential policies for supporting industry and powers to allow application of preferential policies). These guiding documents somewhat helped Vietnam attract investment in supporting industry./.