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VietNamNews

Less reliance on foreign imports

Update: July, 17/2014 - 09:29
Do Thang Hai
Viet Nam is a developing country, and it has lacked equip-ment and materials to improve infrastructure to develop a market for domestic consumption and exports because it lacked local suppliers.

Therefore, Viet Nam has imported a huge volume of machinery, equipment and input material from Asian countries in the region for many years like China, South Korea and Japan.

Now, the country needs a general and comprehensive solution and active implementation from ministries, sectors and provinces apart from cities, enterprises and consumers to reduce dependence on imports.

Deputy Minister of Industry and Trade Do Thang Hai spoke about these issues.

How does the industry and trade sector restructure itself to actively get local input material and reduce dependence on imports?

To limit imports of input material, the industry and trade sector should restructure itself by concentrating on the development of the support industry.

The sector should invest and have support to develop products that can compete, including manufacturing mechanisms, textiles, garments, leather, footwear and electronic products.

Industry and enterprises, especially, should enhance processing of mineral products to limit exports of raw minerals, which would result in an increase of Viet Nam's natural resources.

The Ministry of Industry and Trade (MoIT) has revamped industrial sectors to increase capacity, quality and efficiency in industrial production instead of increasing quantity as before.

Industrial sectors would strive for reducing percentage of processing products and instead develop key industrial products, to create a sound basis for industrialisation and modernisation of the economy.

It would connect the processing industry with farming, forestry and seafood production and consumption.

One other important solution is that the State should have policies on attracting investment from large industrial groups around the world, including Samsung, Nokia and Intel, to develop satellite enterprises in the support industry that produce input material instead of getting them imported.

Many sectors have invested in production of materials and sub-materials, such as the textile, garment and auto sectors. How have the sectors developed production of materials and sub-materials?

Viet Nam has encouraged domestic and foreign enterprises to invest in production of cotton, fibre and cloth to create a textile and garment supply chain. This is being done to increase further value add to textile and garment products and to avail opportunities in exports after signing trade agreements, such as TPP, Viet Nam – EU free trade agreement.

The local garment firms have changed from being processors of products to original design manufacturers of garments to increase the localisation rate of products.

Meanwhile, the auto industry has been successfully producing passenger cars and lorries by themselves with a localisation rate between 35 and 40 per cent.

The cars and lorries have met 70 to 80 per cent success in the local market and competed with ASEAN products.

However, production of auto components has not developed as expected because the production of auto and auto components is a global industry, so the local industry producing these components needs strategic partners to join the global supply chain.

The State should have policies to attract foreign investors to sectors which make auto components in Viet Nam. They also need to create favourable conditions for domestic firms in producing auto components as sub-contractors of the foreign auto firms. That development would increase localisation of auto components and reduce imports.

What do enterprises in the industry and trade sector do to gain the highest efficiency and quality in restructuring themselves and increasing domestic input material?

To gain efficiency in restructuring enterprises, the groups and corporations should withdraw their capital from non-core business, especially from financial, insurance, banking and securities sectors.

They should also review their ability in production and renew the technology they use, as well as the products and services, and increase quality for sustainable development.

How does the ministry support enterprises in actively supplying local products to solve the difficulties in production and business?

The domestic enterprises have faced difficulties in production and businesses due to the economic crisis. Therefore, the ministry has promoted development of domestic production and the market, and encouraged domestic consumption to reduce goods inventory.

The ministry will develop distribution systems, especially in remote and rural areas, and build trade marks for domestic products.

By the end of this year, the ministry will implement solutions to increase operational efficiency of economic groups and corporations managed by the ministry.

The ministry will also ready in the last quarter, a decree on development of support industry to be submitted to the Government. — VNS

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