Sustainable supply chains promoted in new context

More than 4,100 FDI enterprises and over 60,000 domestic ones in the province have gradually formed up and participated in supply chains. However, in order to upgrade supply chains and welcome chain shifts, province-based enterprises need to be supported to solve some obstacles.

Harmony guaranteed

Thanks to having an open investment environment, with favorable infrastructure facilities, abundant and high-quality human resources, Binh Duong has always been in the country’s leading group in FDI attraction. However, one thing to look back on is that the number of domestic enterprises participating in the supply chains of multinational corporations is still limited.

Production activities at Takako Vietnam Company in VSIP 1

According to Nguyen Dinh Thai, Administrative Director of Esprinta Vietnam Company in Di An city-based Song Than II Industrial Park, the company has looked for domestic partners to develop its supply chain. In fact, suppliers have also made great efforts to meet strict requirements set forth by the international market. “In the current situation, forming up a domestic supply chain is the optimal solution for development. The company's review of supplier criteria is carried out very transparently. As of now, we have about 80% of our suppliers from partners in Vietnam and our supply chain is developing stably”, he said.

Mr.Thai added that most of the suppliers for Esprinta Vietnam are small and medium-sized enterprises, but have a high level of specialization and meet the goal of sustainability in the future. The most important thing for small and medium-sized enterprises when participating in supply chains is to have persistence and a high spirit of progress at market requirements.

Mr. Nagata Katsunori, General Director of Sharp Manufactuting Co., Ltd. In VSIP II-A said: "Recently, the company has always made efforts to connect with domestic partners to develop its supply chain, increasing the rate of localization. Through supply chains, the domestic production capacity of auxiliary industrial products is being increased".

According to statistics, the province is now home to 2,277 enterprises in auxiliary industries. However, actual operations show that they have not met demand for raw materials for production in both quantity and quality, especially in the high-tech auxiliary field.

Changing strategies

Talking to us, Le Duy Nhat Luan, Technical Director of Takako Vietnam Co., Ltd. said that after the Covid-19 pandemic, some enterprises will be forced to redesign their supply chains. The chosen solution is to transfer from a foreign supplier to a safer domestic supply area with appropriate changes. However, Vietnam's auxiliary industries are still quite young and weak in some sub-sectors. The scale and capacity of auxiliary enterprises are still limited and the competitiveness of products is not assessed highly.

“It's time for us to look at things that we are having for supply chains. Which fields will we give priority to welcoming? And what level do we actually have? With the current level and policies, it is very difficult for us to welcome and upgrade supply chains", Mr. Luan said. Also according to him, enterprises now need incentives in terms of interest rates, land and finance to develop resources and management. In fact, the technology and resources of Vietnamese enterprises can meet requirements and this is proven by the fact that FDI enterprises are relying on Vietnamese resources to develop production. Enterprises need mechanisms, especially money and land, for investment and development. This requires support from the Government, ministries and sectors with specific regulations. By solving this problem, Vietnam will strongly develop its supply chain. In fact, Vietnamese enterprises can completely meet requirements in terms of human resources and thinking.

Nguyen Thanh Toan, Director of provincial Department of Industry and Trade said that over the past years, the province has considered the development of auxiliary industries as one of the key solutions to improve industrial production capacity and increase the rate of localization, reducing dependence on imported raw materials, increasing added values for exports. During the 2021-2025 period, Binh Duong will further support auxiliary enterprises, helping them become suppliers for domestic and foreign clients.

For the electronics segment, according to enterprises, Vietnam is converging many factors when attracting many large-scale technology corporations. This has helped form up a network of auxiliary enterprises and the electronics industry has participated more and more deeply in the global supply chain. According to Darren Seah, Director of Constellar Company’s Investment and Industrial Transformation Department, the most important thing for enterprises is to control the quality of products, strengthening connection and support from partners to ensure the quality of products. Enterprises need to promote the development of specialized industrial compounds, human resources, technologies and perfect logistics networks.

Reported by Tieu My-Cam Tu-Translated by Kim Tin