Experts advise on support industries
To develop its support industries, HCM City needs to identify the main sectors and focus on training, technology, and incentives for their development, experts told a seminar on attracting investment in the sectors last week.
Vu Van Hoa, president of HCM City Export Processing and Industrial Zones Authority(HEPZA), said Vietnam has not identified key national products to develop a suitable support industry development strategy and create mechanisms and policies to support SMEs, and this curtails the development of support industries.
He also blamed it on the shortage of skilled human resources.
He called for designating projects to develop support industries industrial parks as "special important infrastructure projects," which are entitled to various tax breaks.
"They should be allowed to enjoy interest subsidies from the demand stimulus fund for land clearance and compensation and building technical and social infrastructure and standardised factories."
He also urged the government to offer the same tax incentives for support-industries industrial parks as those given to hi-tech enterprises – a 10% rate for 15 years.
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Besides they should be given import duty breaks, longer land lease periods, and financial incentives, he said, while industrial parks should strengthen ties with foreign business groups to attract investment in support industries.
The city is building the Viet-Pan Techno Park at the Hiep Phuoc Industrial Park, and it will open in October this year, when it will focus on attracting investment from Japanese SMEs in high-technology support industries.
Hirotaka Yasuzumi, managing director of JETRO (Japan External Trade Organisation) HCM City, said the Government must support the development of Vietnamese companies and foster technology transfer to boost support industries.
"If Vietnam has only foreign firms in support industries, the country cannot hope to acquire technologies or develop the industry," he pointed out.
He blamed policies that have failed to meet companies' expectations for the lack of support industries in Vietnam.
Poor policies meant companies are unable to raise funds or train human resources, lack incentives, have no forum to compare notes with other companies in the same sectors, and lack large markets, according to Yasuzumi.
Le Hoai Quoc, president of the Sai Gon Hi-tech Park (SHTP), said attracting investment from multinationals will enable the development of support industries.
The SHTP management currently has a programme to develop support industries for hi-tech manufacturing, with the first pilot project intended to create the development of a supply chain for Intel's plant at the SHTP.
Similar projects are also planned for subsidiaries of multinationals Nidec Group, Sonion, Datalogic, and Jabil.
HCM City has a semiconductor industry development programme for 2013-2020 aimed at developing an "ecosystem" for the industry comprising human resource development, research and trial production, mass production, market development, and product promotion.
Doan Hong Tam, deputy chairman of the Vie-Pan Techno Park, said Japanese investors in support industries are mostly SMEs producing specialised, high-value-added products using complex engineering and technologies.
"We must have appropriate conditions to meet Japanese tenants' requirements including power infrastructure, clean water, telecommunications, skilled workforce, and legal services."
Besides, to attract Japanese investors, the city needs to offer a skilled and disciplined workforce, support with personnel recruitment and training, comfortable housing for professionals and workers.
Japanese firms also expected Vietnam to simplify procedures of all kinds, including by having a ‘one-stop service' in Japanese at industrial parks, he added.