Sunday, January 19 2020


Samsung seeks more Vietnamese suppliers

Update: July, 23/2015 - 08:46

Only 10 per cent out of 41 Vietnamese suppliers has directly participated in the production chain of Samsung Electronics Viet Nam (SEV). After seven years of operations in Viet Nam, SEV sources 36 per cent of its components locally, while the remainder comes from foreign firms from nine countries operating in Viet Nam. Han Myoung Sup, Samsung Viet Nam's General Director, and Pham Anh Tuan, Deputy Director of the Ministry of Industry and Trade's Heavy Industry Department, spoke to reporters on the issue.

How many Vietnamese firms are joining SEV's production chain in Viet Nam? What are the requirements for local firms to become Samsung's suppliers?
Han Myoung Sup

There are 41 domestic businesses engaged in Samsung's production chain. Of which, four Vietnamese firms have been Samsung's direct suppliers or vendors level 1. We expect to add more Vietnamese firms to our chain, thus promoting the development of the country's support industry.

Vietnamese companies should have the will and determination to participate in Samsung's production chain. Samsung sells products worldwide. This is the reason we value high-quality products. There are difficulties in starting anything. I do hope that Vietnamese firms will have the determination to join us in both small and large projects. I think it is not difficult for Vietnamese companies to join the chain.

What is the localisation rate of Samsung in Viet Nam?

We have several vendors or suppliers at levels 1, 2 and 3. Among the vendors, Vietnamese firms have different localisation rates. In total, SEV sources 36 per cent of its components locally. Of this, nearly 10 per cent is made by Vietnamese firms, while the remainder comes from foreign firms from nine countries operating in Viet Nam.

South Korean businesses joining Samsung's production chain have had dealings with the company for a long time. We have a clear understanding of their ability. We have started relationships and built trust with Vietnamese suppliers. We expect that the cooperation between Samsung and Viet Nam will expand in the future.

What is Samsung's plan for exports and production expansion this year?

Last year, Samsung's Bac Ninh and Thai Nguyen complex recorded exports worth US$26.3 billion, accounting for 17.5 per cent of the country's total exports, thanks to the Government's attention and support.

This year, the figure is expected to be higher at $30 billion, contributing further to Viet Nam's economy. We'll have the Samsung Electronics HCM City Complex (SEHC), with a total investment of $1.4 billion.

The SEHC, spanning 70ha, will focus on research and development and the production of high-end television products such as SUHD TV, Smart TV and LED TV, besides other consumer electronics products, during the first phase of its operation.

We would like to thank the Vietnamese Government for its support.

Pham Anh Tuan, Deputy Director of the Ministry of Industry and Trade's Heavy Industry Department

Pham Anh Tuan

Samsung has announced the list of spare parts it has been seeking from Vietnamese suppliers. Will Vietnamese firms fulfill the company's requirements?

There will be a few local businesses directly supplying electronic products to Samsung, while others will become secondary suppliers for the company. Vietnamese firms can supply simple products to Samsung, such as packaging, and increase their productivity over time. However, mobile phones are high-tech products and making them will require Viet Nam to go through a long process.

This could be an opportunity for the country as Samsung has a large market worldwide.

The number of Vietnamese companies in the support industry becoming Samsung's suppliers will increase as a survey conducted by the ministry and the company showed that some firms are eligible to supply spare parts to Samsung.

There are only four Vietnamese companies among the 41 suppliers for Samsung. What do you think about this?

Historically, the majority of local businesses in the support industry have been small- and medium-sized enterprises, and most of them are private firms. Again, electronics is a relatively difficult sector and needs a road map for development. However, it could be said that the country's support industry has made improvements.

Last year, Samsung did not find any Vietnamese suppliers. This year, they found 20 local direct suppliers.

n In your opinion, what are the shortcomings of Vietnamese businesses?

Vietnamese firms have to contend with constraints related to capital and training. The developed countries have been ahead of us in the electronics industry for many years.

This is the reason Viet Nam should make efforts to advance in this field and have supportive Government policies. — VNS

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