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HCM City has project to develop support industry

Update: July, 18/2015 - 09:15

The municipal Department of Industry and Trade has recently completed Phase 1 of its project, which focuses on mechanics, electronics-communications, rubber-plastics, food processing, and textiles and garments. — Photo baotintuc

HCM CITY (VNS)— HCM City is seeking more solutions to complete a project on developing the support industry, which plays a key role in promoting the sustainable development of major industries, according to a report on the Government website chinhphu.vn.

The municipal Department of Industry and Trade has recently completed Phase 1 of its project, which focuses on mechanics, electronics-communications, rubber-plastics, food processing, and textiles and garments.

FDI enterprises, especially large corporations such as Intel and Samsung, have a great demand for spare parts supplied by domestic businesses, according to Nguyen Phuong Dong, deputy director of the Industry and Trade Department.

"The Department of Industry and Trade is being proactive by connecting local businesses operating in the support industry with FDI enterprises, especially large ones," Dong said.

Recently, HCM City People's Committee issued Decision No1026 on a trial construction of high-rise factory models for lease at the Sai Gon Hi-Tech Park, Tan Thuan-Linh Trung Export Processing Zone and Hiep Phuoc Industrial Park during the 2015-18 period.

The three- to eight-storey factory will have a total area of 10,000 sq.m – 40,000 sq.m. It will be divided into small areas covering 100 sq.m, 200 sq.m, 500 sq.m, 1,000 sq.m and 3,000 sq.m.

The factory will create favourable conditions for international investors, especially for local SMEs and Japanese businesses in the support industry that want to make long-term investments in Viet Nam.

High-rise factories

Nguyen Bach Hoang Phung, deputy head of the HCM City Export Processing and Industrial Zone Authority (HEPZA), said that HEPZA had urged investors to quickly implement the high-rise factory models with preferential policies.

The first high-rise factory is expected to start operation in August next year.

HEPZA also plans to create specialised areas for support industry businesses, covering a total of 200 ha at Hiep Phuoc Industrial Park and Le Minh Xuan 3 Industrial Park.

Dong said that SMEs were the key factor in the development of the support industry. Ninety-five per cent of businesses in HCM City are SMEs. However, SMEs lacked capital due to difficulties in accessing loans, and did not have enough qualified staff.

As a result, they have weak competitiveness because their products are low quality and have high costs.

Japanese businesses face difficulties in acquiring materials and parts in Viet Nam, according to the Japan External Trade Organisation (JETRO).

The purchase ratio for materials and components of Japanese manufacturers in Viet Nam is 33.2 per cent, compared to 66.2 per cent in China, 54.8 per cent in Thailand, 43.1 per cent in Indonesia and 40.7 per cent in Malaysia.

Hirotaka Yasuzumi, executive director of JETRO in HCM City, said the opportunities were huge for Vietnamese businesses to participate in supplying products for Japanese enterprises and FDI companies.

He urged the Government and the business community to develop new policies to help the support industry.

Hiroshi Tahara, a financial specialist at the Japan Finance Corporation, said the Japanese Government in the past had issued credit guarantee policies to help SMEs in Japan, which had faced the same challenges as Vietnamese businesses.

Tahara said that Viet Nam should conduct a survey of local SMEs and provide support soon. —VNS

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