Local auxiliary industrial development – synchronized measures implemented

Update: 23-06-2018 | 17:02:13

In order for the supporting industries to meet the local production needs, the Provincial People's Committee directs the functional sectors to implement a number of comprehensive solutions to support the supporting industry and promote industrial development in a comprehensive and lasting manner.

Demands for production materials not met

Recognizing the importance of supporting industries, in recent years, the Government has promulgated a series of policies to promote the development of supporting industries. The objective of the supporting industry development program in 2016-2025 is to show that by 2015, supporting industry products must meet about 45% of essential demand for production, domestic consumption and export of 25% value of the industry production; By 2030, 70% of the demand for production and domestic consumption will be met.

Production is on-going at Thuan An Furniture Joint Stock Company

However, due to limited resources, up to now, domestic supporting industries have only been in the early stage of development, the enterprises supporting the products in our country are very less, less competitive. The products of Vietnam are poor in terms of types, designs, prices are higher than many products of the same type ... Therefore, not meet the needs of the manufacturing industry. Vietnam accounts for only about 0.3% of the nearly 500,000 Vietnamese enterprises engaging in manufacturing for the supporting industry.

In Binh Duong, information from the Provincial Industrial Zones Authority said that in 2017, there were 374 enterprises operating in the supporting industries, of which 57 were domestic ones. supporting industries in the province have developed more than some localities, but have not met the demand for raw materials for domestic production in both quantity and quality.

According to Luong Ngoc Kim, Vice Chairman of Binh Duong Wood Association, with the position of a key export sector of the province, every year enterprises spend hundreds of millions to buy raw materials for the wood industry. Most of the auxiliary materials such as screws, paints, varnishes, sanding paper ... are supplied by importers for distribution in the Binh Duong market. Raw materials in the wood industry account for a relatively high proportion of production costs of wood products (average 20-30%). It also shows that if supporting industries develop strongly, Binh Duong will have more budget revenue and businesses have enough raw materials for production on the spot, saving a lot of time and money.

According to Nguyen Quang Vu, chairman of the Association of shoes - bags Binh Duong. In fact, at present, the footwear and leather material supply is only about 20-25%, the rest have to import, the design capacity is weak ... Not to mention the big contracts, the foreign partners Usually subcontractors from the "mainland" are designated to meet the quality standards they require. With the characteristics of the footwear industry being the source of raw materials, which account for 60-70% of the cost of products, if there is domestic or domestic auxiliary materials, this industry will increase its competitiveness with competitors in the region, As our country is losing the advantage of cheap labor.

In the textile and garment industry, the domestic supporting industry is now beginning to meet a part of the demand of enterprises, especially the manufacturing of finished goods (FOB). However, the problem is that if the demand for quality is met, the price of raw materials in the country today is higher than that of imported raw materials, so it is also difficult for producers to use raw materials. inland. According to Phan Le Diem Trang - Vice Chairman of Binh Duong Textile and Apparel Association, now the foreign partners when working with businesses set standards of quality very strict. Meanwhile, the gap between quality standards between domestic and foreign enterprises is quite large. Therefore, many companies can not find information about the ability of contracting large enterprises, especially foreign enterprises. Conversely, foreign firms have little information about Vietnamese enterprises. In addition, businesses in the textile industry are reluctant to sign commercial contracts with Vietnamese subcontractors due to the lack of stability in the quality of their goods. They always watch their fear of contract breaches.

Synchronized measures implemented

Recognizing the importance of supporting industries, Binh Duong has been striving to build a long-term development strategy for supporting industries since 2011, creating momentum for other industries to flourish. To implement Decision No. 2751/QD-UBND dated 26 November 2011 of the provincial People's Committee on "Approving the scheme of orienting development of supporting industries in Binh Duong province up to 2020". There are many projects on supporting industries from big corporations in the world deployed in some industrial parks in Ben Cat, Bau Bang district etc. focusing on supplying products and accessories for the garment industry. electronics, components, cars and so on. In the orientation of socio-economic development in the direction of sustainability based on the objectives of the resolution of the provincial Party Congress X and socio-economic development plan 5 year of the province 2016-2010, stating: Continue to maintain the growth rate of industry, restructure the industry according to How-priority attract, develop supporting industries, modern technology, advanced techniques, refining, supply of raw materials, contribute to improving the localization rate of products.

During the recent years, Binh Duong province has made many efforts to attract foreign enterprises to participate in supporting industry development and achieved some encouraging results. To implement Decision No. 2751/QD-UBND dated 26 November 2011 of the provincial People's Committee on "Approving the scheme of orienting development of supporting industries in Binh Duong province up to 2020". There are many projects on supporting industries from big corporations in the world deployed in some industrial parks in Bến Cát village, Bau Bang district ... focusing on supplying products and accessories for the garment industry. In the end of 2016, the KOLON Group signed a memorandum of understanding with the province on the implementation of the project of producing tires and airbags for cars with investment capital to US$ 1 billion, on an area of 42 hectares in Bau Bang Industrial Park. According to the plan, investors will invest US$ 220 million in Phase I (2017-2018), US$ 600 million in Phase II (2018-2026) and then phase III. Project of Binh Duong Tetra Park Joint Stock Company (Singapore) with registered investment capital of US$ 124 million in Vietnam-Singapore II Industrial Park, specializing in producing sterile paper packaging, plastic and aluminum for closing food packages.

Currently, Binh Duong is trying to build a long-term development strategy for supporting industries, creating momentum for other industries to develop. According to information from the Department of Industry and Trade, the department is implementing a project to develop supporting industries in order to advise the provincial People's Committee on completing and supplementing the legal basis and the stimulus package for local supporting industries. In particular, the development of support industries in Binh Duong to 2025; to formulate the regulation on management of the implementation of the program on development of supporting industries; building sectoral and supporting industry databases; implementing training programs, supporting human resource development, enhancing the management capacity of supporting industries and assessing the localization rate of 4 key industries. Business environment is favorable for enterprises to invest in innovation and technology application etc. to promote product localization and to participate in global supply chain.

Nguyen Van Danh, Director of Department of Industry and Trade, said that to meet the needs of supporting industries as well as support and create favorable conditions for enterprises to expand production, the department is researching and proposing with the provincial People's Committee solutions to support the production area with suitable area and price for supporting industrial enterprises inside the industrial zones. When this sub-zone is created, it will create favorable conditions for industrial enterprises to access production space with appropriate size and cost, linking with each other and especially with production enterprises. FDI and industrial production enterprises, step by step forming the network of supporting industries of the city towards sustainable development. In addition, in order to improve the efficiency of supporting industrial enterprises and supporting industries, in 2018, the Department of Industry and Trade will strengthen the close linkages with surveyed business associations to capture the demand of enterprises. To build a database of enterprises in Binh Duong province. The Department will co-ordinate with the Industrial Park Management Board to organize the supply and demand connection programs in order to create favorable conditions for industrial production enterprises and industrial enterprises to increase their access to internal and external partners. To expand the market, increase supply capacity, expand production, step by step join the global supply chain.

Reported by Tieu My – Translated by Vi Bao

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Local auxiliary industrial development – synchronized measures implemented

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