METALEX Vietnam in October

Mr. Chainarong Limpkittisin, Managing Director, Reed Tradex Company said that based on the industrial forecasts and outlooks, Reed Tradex has realized the growing importance of supporting industries in Vietnam as the country is joining global supply chains and value chains. Vietnam’s supporting industry finds a lot of opportunities for development. Specifically, large foreign corporations have established manufacturing and assembling facilities in Vietnam and they very much expect to have more local parts suppliers to reduce transport costs and risks. The Vietnamese support industry sector has many development opportunities, especially when Vietnam joins the global supply chain. Many foreign companies, who have built manufacturing and assembling plants in Vietnam, expect to partner with more domestic spare part suppliers to reduce transport expense and risks.

The government has also provided significant support to the industrial sector which is one of the areas that attract the most overseas investment. However, necessary elements such as product development and human resource training on a continuous basis, should always be given importance as these will enforce the manufacturing industries to become even stronger with higher productivity as well as competitive credibility.

Dr Vu Tien Loc, President of Vietnam Chamber of Commerce and Industry (VCCI), stated that the 11th National Congress of the Communist Party of Vietnam worked out the Socio-economic Development Strategy 2011-2020 with the main target of developing Vietnam into a modern industrial country by 2020. “ In fact, the national economy’s development requires a total restructuring, phasing out labour- intensive machines into participating more strongly and deeply in supply chains and value chains, and moving from wide to deep development. On that basis, we will improve the quality of the economy, and save capital investment with effective sustainable development. According to JETRO’s survey information in October 2011, the percentage of parts and components purchase in Vietnam was only 28.7 percent, less than those in other countries in ASEAN (e.g Thailand: 53 percent, Indonesia: 41 percent and Malaysia: 39.3 percent) and China: 59.7 percent. As a result, Japanese manufacturers in Vietnam have
to import necessary parts and components from other countries such as Japan, Thailand, and China. This reduces not only its competitive capability of supplying products to assemblers, but also decreases the trade profit of Vietnam. We strongly believe in the potential growth of supporting industries and the positive effects of it on sustainable development.

Mr. Chainarong added that as the ASEAN Economic Community is approaching in the year 2015, the exchange of machinery, technology, knowledge and other products have become easier than in the past. In one sense, this helps speed up the advancement of the industrial and commercial sectors but at the same time, we have to keep improving ourselves for the rising competition from other countries in the region with promising industrial capacities as well. Many foreigners believe in the growth potential of the supporting industries and that their development will foster Vietnam’s manufacturing sector and economy. At present, many foreign investors are strongly confident to invest in Vietnam. The continued
foreign direct investment in Vietnam is proof that the manufacturing and supporting industries here not only have a bright future, but also play vital roles in the well-being of the economy.