Illustrative photo (Photo: VNA)
The expo aims to foster connectivity among businesses in the support industries of Vietnam and Japan, promoting the growth of the automobile and electronics sectors in Vietnam.
The event is expected to draw 18 big brands from Japan as buyers, and 30 Vietnamese firms as suppliers who are supported by the Ho Chi Minh City Investment and Trade Promotion Centre (ITPC) and the city’s Centre for Support Industry Development (CSID).
According to ITPC Vice Director Cao Thi Phi Van, engaging in the Supporting Industry Show is part of the centre’s plans to develop the support industry.
The plans include forming a domestic production network meeting demand for complete products and joining global value chain, encouraging foreign direct investment (FDI) firms to enter the support industry and assisting small and medium-sized enterprises to supply supporting products to reduce imports of the products and enhance added value.
Recently, Vietnam has seen positive changes in its investment environment.
Suttisak Wilanan, Vice Director of Reed Tradex company noted that last year, Vietnam leaped five steps to 55th position in the Global Competitiveness Index by the World Economic Forum.
Takimoto Koji, head of the Japan External Trade Organisation (JETRO) in Ho Chi Minh City said that total Japanese investment in Vietnam has increased sharply to US$8.64 billion in 2017 from US$2.15 billion in 2016. Also in the period, new investment rose from US$1.18 billion to US$7.76 billion.
Some 70% of surveyed Japanese firms said they will expand business in Vietnam in the next 1-2 years, the highest number in six surveyed countries together with the Philippines, Indonesia, Malaysia, China and Thailand.
With a network of 16 bilateral and multilateral free trade agreements, Vietnam is a link in the high value chain.
The deals have considerably eased barriers in taxes and opened the door for foreign investment. But the localised product ratio of Vietnam in 2017 was 33.2%, the lowest among the six surveyed countries, according to JETRO.
Meanwhile, statistics from the Ministry of Industry and Trade showed that there are 661 businesses in supporting industry, 591 of which produce electronic accessories, 56 make computers and peripheral devices and 15 produce magnetic disks and optical products.
Luu Hoang Long, President of the Vietnam Electronic Industry Association said few domestic firms in the electronics supporting industry supply FDI firms due to limited mutual understanding and loose links.
Some experts said this is a good time for some sectors, including automobiles, to seek stronger ties with support industry firms, as one car is made of more than 30,000 parts, making it hard for one country to provide all of the parts.
Vietnam, with its strategic position in the centre of the ASEAN with many big seaports, has abundant opportunities to cooperate with carmakers of Thailand and Indonesia to create a sustainable automobile sector, they said.
They also pointed to big opportunities for the mechanical industry of Ho Chi Minh City, especially automobile production as the city’s industrial production index during 2016-2017 was high at 7.9%.
Forging stronger ties with CSID and foreign organisations such as JETRO will help local firms to enhance their supplying capacity, foster links with other firms in and outside the country and prepare to join global supply chains.