However, the supporting industry in Dong Nai has failed to develop on a par with its potentials despite the province’s efforts to call for investment and adopt favourable policies. Furthermore, most of the projects have been invested by foreign companies.
Thereby, Director of the provincial Department of Industry and Trade Duong Minh Dung said more incentives are needed to assist businesses in the supporting industry, particularly small- and medium-sized enterprises (SME).
According to the department, the locality has recently seen a remarkable increase in investment in the supporting industry. But, a majority of the investment came from foreign investors, including US$660 million from Dong Nai Hyosung Company of Turkey, 160 million USD from the Taiwanese (China) Kenda Group, and 112 million USD from the Japanese SMC Manufacturing Vietnam.
Twenty years ago, the Taiwan-funded Vietnam Precision Industrial Joint Stock Company (VPIC) began operation in Dong Nai province with an investment of 2 million USD, producing components for domestic motorbike producers and providing jobs for nearly 200 workers.
The company has invested tens of millions of USD to expand its operation. It now employs over 1,200 workers and rakes in 60 million USD from exports each year.
VPIC Chairman Ly Yu Qi attributed the company’s success to the favourable business climate and incentives offered by the province, particularly in administrative procedures and personnel training.
Meanwhile, a leader of the Dai A Thanh Company highlighted difficulties facing domestic SMEs operating in the supporting industry, and stressed that more assistance should be provided for these SMEs in penetrating markets.
Dung revealed that the province is now home to about 260 enterprises operating in this field, accounting for less than 24 percent of the provincial industry production value. There remains huge room for SMEs to join the sector.
In order to develop the supporting industry, the province needs to accelerate the building of infrastructure and offer incentives, particularly in terms of finance, tax, technical assistance, management, and training, Dung said.
Dong Nai aims to draw 1 billion USD in FDI in 2016, nearly three fifths of which was obtained in the first quarter of the year. The province now has 1,200 valid FDI projects worth more than 24 billion USD. Major investors in the province include Taiwan, Japan and the Republic of Korea.