What are solutions to upgrade industry in Southeastern region?

Part 2: Creating breakthroughs through linkages

For sustainable industry, along with maximizing potential and advantages, enhancing intra-regional cooperation, localities in the Southeastern region need to elevate technological levels, innovate machinery and modern technology, and strengthen the linkage between foreign-invested enterprises and domestic ones.

“Platform” from auxiliary industries

Ngo Si Hoai, Vice Chairman and Secretary General of the Vietnam Timber and Forest Products Association stated that the Southeastern region is the largest wood processing and production center in the country. However, the wood industry has recently faced numerous challenges, due to global market fluctuations. To overcome immediate challenges and ensure sustainable development, the wood processing industry in the region is striving to link in both production and consumption. The wood industry’s solutions are to establish high-tech wood production and processing centers; link associations to organize trade promotion programs, seminars and joint conferences; promote green production...

The International Wood & Woodworking Machinery Exhibition - BIFA WOOD VIETNAM 2024 emphasizes a sustainable development strategy towards regional linkage. In picture: A high-tech wood equipment booth participating in the fair

"In the current difficult situation, the wood industry is fostering linkages from making afforestration to processing, tapping timber, refining products and seeking new markets. Domestic wood enterprises need to strengthen their connections, build brands associated with the development direction of the national strong industry", said Mr. Hoai.

Regarding auxiliary industries in the Southeastern region, Associate Professor - Dr. Le Hoai Quoc, Chairman of the Ho Chi Minh City Automation Association shared with reporters that there needs to be tighter linkages between enterprises in the Southeastern region for sustainable development, with focus on upholding the strengths of each enterprise in the auxiliary industry, enhancing production capacity towards specialization, developing technology at the needs of domestic and international partners. This approach will help auxiliary industries in the Southeastern region to reach strong and sustainable development.

If manufacturing enterprises in the Southeastern region are supported by auxiliary industries, they can define new markets, participate in the global supply chain and conquer international markets. Espencially, not only leading enterprises, small and medium-sized ones will be encouraged to actively innovate, enhancing their capacity in production and business, thereby changing to optimize production resources, increase productivity, reduce costs and shorten the time to bring products to customers.

Associate Professor - Dr. Le Hoai Quoc suggested that more attention should be paid to adding solutions that tighten linkages between the auxiliary industries of different countries such as sharing databases, organizing business connections, enhancing production capacity at factories, connecting training at factories... Additionally, improving the capacity of enterprises in auxiliary industries to participate in the supply chain of multinational companies producing finished products is essential.

Linking, supporting each other for mutual development

According to Phan Thi Khanh Duyen, Deputy Director of provincial Department of Industry and Trade, Binh Duong province aims at reaching the wood industry’s export turnover of US$ 9billion-US$10 billion by 2025 and US$ 12billion-US$13 billion by 2030. The current challenge for domestic wood enterprises is that most of them produce based on orders, designs, and models from foreign customers, without proactively creating designs that carry Vietnamese cultural values. "Meanwhile, the costs that domestic businesses incur to obtain production rights for tables and chairs are still higher than the profits earned from those products. Additionally, domestic wood businesses remain passive, waiting for customers to come and provide designs for processing rather than actively researching, approaching customer segments, creating products under a Vietnamese brand.

Besides the wood industry, footwear industry is identified as one of the main export sectors of the Southeastern region. Currently, the Southeastern region accounts for about 65% of the country's footwear production capacity. However, domestic footwear enterprises mainly engage in product processing, with low added value. They have not developed raw material and accessory industries, not built many strong brands for both domestic and international markets yet. Most of the raw materials and accessories used in the footwear industry are imported from China, South Korea, and Southeast Asian countries.

Nguyen Duc Thuan, CEO of Thai Binh Joint Stock Company said: "We propose the establishment of a development and innovation center for raw materials and accessories to promote the standardization and transparency of the raw materials market. This will allow enterprises in the leather and footwear industry to enhance their dynamism and efficiency while also providing opportunities to advance and participate in the industry's supply chain… This is the only way to help leather and footwear enterprises, especially small and medium-sized ones, to have the opportunity to grow and join the industry's supply chain".

Mrs. Duyen added that for the growth momentum of the high-tech industry, there needs to be a mechanism to evaluate the current situation and complete a project of building a high-tech industrial zone to attract investment in the production of electrical, electronic, Internet of Things (IoT), and artificial intelligence (AI) products... Moreover, it is essential to assess the common and unique characteristics of the localities in the region when developing information technology to link and support each other for mutual development.

Reported by Tieu My-Translated by Kim Tin