Speaking at the workshop, Vu Ba Phu, Director of the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Information and Trade (MoIT), noted that in the context of a reshaped global supply chain, Vietnam has emerged as a new strategic manufacturing hub in Southeast Asia.

“The government is prioritising the development of supporting industries through preferential investment policies, trade facilitation, and technical assistance with the aim of increasing localisation rate and reducing dependence on imported components”, said Phu.

To support this effort, he revealed, Vietrade is working closely with the Department of Industry, the Foreign Investment Agency, Japan External Trade Organisation (JETRO), Korea Trade-Investment Promotion Agency (KOTRA), and Vietnam’s network of nearly 60 overseas trade offices to actively implement investment promotion programmes in the industry and trade sector.

These programmes, he said, focus on frequent engagement with potential FDI businesses, aiming to expand cooperation opportunities and build strong links that integrate Vietnamese industrial production into global value chains.

Indeed, FDI continues to play a vital role in Vietnam’s industrial landscape. In 2024 alone, processing and manufacturing attracted over US$25.5 billion in newly registered FDI, accounting for nearly 67% of total foreign investment. Sectors such as electronic components manufacturing, precision engineering, and auto/motorbike parts production are receiving growing attention and support from multinational corporations and FDI enterprises.

According to JETRO’s 2024 survey, more than 56% of Japanese firms operating in Vietnam plan to expand their investments within the next one to two years. Nearly half nearly half operate in industrial manufacturing, with top priorities including the expansion of local input supply chains.

Currently, Vietnam is home to around 1,700 FDI enterprises operating in supporting industries, accounting for about 40% of the total number of businesses in the sector. However, the localisation rate in many sectors remains modest, at around 45–50% in textiles and footwear, 15–20% in mechanical manufacturing, and only 5–20% in automobile assembly.

Of more than 6,000 supporting industry enterprises in Vietnam, they meet only about 10% of domestic demand for components and spare parts. For Vietnamese-owned enterprises alone, the localization rate is just around 15.7%.

These figures highlight both the untapped potential of Vietnam’s supporting industries and the urgent need to enhance production capacity, product standards, management skills, and supply chain collaboration between domestic firms and FDI enterprises.

Selective FDI attraction and stronger linkages between foreign and local businesses are key factors in improving the competitiveness and capacity of Vietnam’s supporting industries, agreed delegates.

Business-matching event to link supporting industry firms

VOV.VN - A workshop scheduled for August 5 in Hanoi aims to attract greater investment into Vietnam’s supporting industries and strengthen ties among domestic and foreign businesses.