PORTAL - On the afternoon of September 15, at the Binh Duong Convention and Exhibition Center, the People's Committee of Binh Duong province, the Department of Industry, the Ministry of Industry and Trade and Tuoi Tre Newspaper coordinated to organize a Workshop on "Supply chain transformation - opportunities for Vietnamese enterprises".
Attending were Mr. Vo Van Minh - Deputy Secretary of the Provincial Party Committee, Chairman of Binh Duong Provincial People's Committee (PPC); Ms. Nguyen Truong Nhat Phuong - Vice Chairman of Binh Duong Provincial People's Council; Mr. Nguyen Van Danh - Vice Chairman of Binh Duong PPC; Ms. Nguyen Thi Hoang - Vice Chairman of Dong Nai PPC; Mr. Pham Tuan Anh - Deputy Director of Industry Agency, Ministry of Industry and Trade; Mr. Le The Chu - Editor-in-Chief of Tuoi Tre (Youth) Newspaper and more than 250 guests are leaders of Southern provinces and cities, trade associations, enterprises, domestic and foreign experts.
The Workshop program is part of the event series of the Forum "Building an autonomous industry" initiated by Tuoi Tre newspaper from July 2022. The forum focused on finding solutions to current problems and solving difficulties to develop the mechanical industry and supporting industries, the story of linking enterprises, linking regions, and industrial clusters to develop internal resources and promote Vietnam to build an autonomous industry. "How can we seize the opportunity to help our country's enterprises participate in the global supply chain?" is the content that is focused on discussing to find the answer at the Workshop.
Leaders of Binh Duong PPC, Industry Agency, Ministry of Industry and Trade and Tuoi Tre Newspaper chair the Workshop
Opportunities and challenges for Vietnamese enterprises
In the past time, the strong transformation of the global supply chain has caused many multinational corporations to boost investment in Vietnam, contributing to the formation of a "big picture" with many great opportunities and challenges for Vietnamese enterprises. According to experts, policy makers as well as enterprises themselves, the transformation picture has shown that the opportunity for Vietnamese enterprises to join the global supply chain has never been as great as it is today.
Specifically, Apple has moved 11 factories of Taiwanese enterprises in the supply chain to Vietnam. LEGO Group (Denmark) has built a new factory in Binh Duong, with an investment project of more than 1 billion USD.
Techonic Industries (TTI), a multinational group specializing in electrical and home appliance products, with 12 factories globally, 76% of products supplied to the US and Nordic markets, is also implementing an investment project of 650 million USD in the Saigon Hi-tech Park. Similarly, many other enterprises such as Foxconn, Luxshare, Pegatron, Wistron also expand their available scale in Vietnam.
Jetro's 2021 survey shows that 55.3% of Japanese enterprises in Vietnam want to expand their business scale, the highest rate in ASEAN.
Talking about the reason for choosing to invest in building a factory of more than 1 billion USD in Vietnam, specifically Binh Duong province, Mr. Preben Elnef - General Director of LEGO Vietnam Technology Co., Ltd. said that Vietnam has very favorable conditions and potential markets. Especially, with the outstanding development over the years, Binh Duong has an infrastructure system in line with the green and sustainable development goals of the LEGO Group.
With the attention and promotion of support on mechanisms and policies from the Government and State management agencies, Vietnamese industry, especially the supporting industry, has achieved remarkable results. Vietnam has a number of advantages to take advantage of supply chain transformation, such as: Being a member of many important multilateral and bilateral trade agreements; having a stable macroeconomic and political environment, a dynamic economy, and an ever-expanding consumer market; the business environment is getting more and more perfect, many indicators of Vietnam's business environment and competitiveness have been improved, etc. It is a great advantage for Vietnam to seize opportunities, attract large corporations, high-tech corporations with the need to transform production and supply chains in the region and globally.
Mr. Do Minh Tam - General Director of THACO Industries shares at the Workshop
Mr. Do Minh Tam - General Director of Mechanics and Supporting Industries Corporation (THACO Industries, belonging to THACO Group) said that joining the supply chain THACO Industries has become a strategic partner of many famous automobile manufacturers such as Kia, Mazda, Peugeot, etc. Towards the target of 1 billion USD in revenue by 2025, of which 500 million USD in exports, THACO Industries will continue to perfect production technology, focus on rapidly developing and diversifying products according to customer needs, promote joint ventures with domestic and foreign partners. The Group will invest in 02 industrial parks in the North and the South according to the model of a new generation specialized industrial park to optimize production efficiency across the value chain, reducing logistics costs, improving competitiveness and contributing to the creation of new business opportunities.
However, in fact, most industrial enterprises in Vietnam are still small and have not been able to participate deeply in the value chain, and the supply chain is broken due to dependence on the volatile world market, from the effects of the Covid-19 pandemic to the trade war between countries, etc. Vietnam currently has about 2,000 enterprises producing spare parts and components, of which only about 300 are involved in the supply chain.
Binh Duong welcomes the "wave" of supply chain transformation
Chairman of Binh Duong PPC Vo Van Minh said that although the industry has developed quite well, but like the general situation of the whole country, enterprises in Binh Duong province still rely heavily on imported raw materials to produce finished products. The fact that supporting industries and supply chains have not developed strongly has partly affected the growth quality of industries, which is most evident through the Covid-19 pandemic, many enterprises have faced difficulties in terms of shortage of production materials, especially electronics, textiles, footwear, etc.
Chairman of Binh Duong PPC Vo Van Minh speaks at the Workshop
According to the latest statistics, Binh Duong has 2,277 production and business enterprises in the fields related to supporting industries, specifically: Textile and garment with 442 enterprises, leather and footwear with 172 enterprises, and wood processing with 953 enterprises, mechanics with 710 enterprises, etc. It can be said that it is not enough to meet the demand for raw materials for production in both quantity and quality, especially in the field of high-tech supporting industries.
In order for the industry to continue to develop in a fast and sustainable direction, especially in the face of the wave of investment shifting to Vietnam, the increasing trend of investors' production expansion and the the outbreak of the 4th Industrial Revolution, at the 11th Provincial Party Congress, 2020 – 2025 tenure, Binh Duong identified: "Continue to promote industrial restructuring on the basis of application of technical advances and technological improvements; give priority to inviting, attracting or expanding investment in industries with great potential and high science and technology content; improve production levels, gradually increase the localization rate and participate more deeply in the global production network and value chain".
Therefore, Binh Duong is focusing very strongly on implementing the Smart City Project with the main development orientations of attracting domestic and foreign investment in the high-tech industry, reflected in the promulgation and application of applying many policies to attract high-tech enterprises, focusing on developing industrial park projects in the direction of focusing on science and technology, studying the formation of industrial parks - science and technology urban centers, to attract all enterprises, especially small and medium enterprises, start-ups in manufacturing industries with high added value, environmentally friendly, less labor intensive; innovating advanced and modern technologies, improving the quality of enterprises' products in parallel with synchronous solutions to promote the development of supporting industries to serve production, thereby increasing competitiveness in international economic integration, forming a diversified and tight supply chain.
During the discussion session at the Workshop, the speakers also forecasted the upcoming market, regional planning, land fund exploitation, infrastructure preparation, raw materials, logistics, and opening of links to create conditions for the formation of industrial clusters and industry clusters within and between localities; policies and administrative reforms to attract investment in localities; mechanism for coordination and unity among localities in the economic quadrangle: Ho Chi Minh City, Binh Duong, Dong Nai, Ba Ria-Vung Tau and neighboring localities to link and exploit all the potentials and advantages of the Southern key economic region.
Especially exciting was the Q&A session between enterprises and guest delegates and experts around the following issues: What enterprises get when linked together; supporting policies, criteria and conditions for association between enterprises; training of highly skilled human resources, sharing about technology, orders, etc. to participate in the global supply chain.
Enterprises exchange on the sidelines of the Workshop
According to the discussion at the Workshop, enterprises need to actively plan and develop appropriate and flexible business strategies to adapt to the rapid changes of the macro and micro business environment; actively, proactively integrate, take advantage of trade agreements to participate deeply in the global supply chain. In addition, enterprises themselves need to be properly aware of the role of logistics activities and supply chain management, thereby enhancing the linkage and transparency of information among the participants in the chain in order to collect information, assess possible risks and have a response plan. In addition, it is necessary to promote the application of information technology and automation in production and business activities in order to reduce costs and improve operational efficiency. Especially, it is necessary to improve the quality of enterprises' human resources, in the context that localities are urgently coming up with economic recovery plans, enterprises need to quickly develop scenarios and practical bases to have flexible and appropriate production plans.
Reported by Phuong Chi- Translated by Thanh Tam