Creating Added Value and Ripple Effects on Hanoi Key Industrial Products

11:38:23 AM | 14/5/2019

The Vietnam Business Forum Magazine excerpts opinions of Hanoi leaders, branch leaders, economic experts and business leaders on the implementation of Program 03- CTr/TU of the Hanoi Party Committee and Decision 496/QD-UBND dated January 26, 2018 of Hanoi People’s Committee on the Hanoi Key Industrial Product Development Project in 2016 - 2020 and to 2025 to create positive effects on local and national socioeconomic development.

Mr. Hoang Trung Hai - Member of the Politburo, Secretary of the Hanoi Party Committee
Hanoi’s flagship industrial products are not only branded and increased their contributions to the national value chain, but also carry a high intellectual content and environmental friendliness. To do so, the city needs enough room for industrial development, particularly focusing on industries using advanced, clean technologies. Manufacturers of key industrial products must direct their peers, impact, connect and cooperate with other units for joint sustainable development.

Dr. Vu Tien Loc - President of the Vietnam Chamber of Commerce and Industry
Hanoi must further accelerate reforms, create a more favorable business environment to promote its key industrial product development program which must be selective, focused to make Hanoi a high-tech, modern industry industrial center of the country in the coming time. Accordingly, Hanoi should continue to make administrative procedures more transparent and convenient for businesses, and attract more investment resources for sectors that make high added value, use advanced technologies and generate strong spillover effects.

Dr. Tran Dinh Thien - Former Director of the Vietnam Institute of Economics
As Vietnam integrates deeper into the world economy, fulfils more WTO commitments and enters into more free trade agreements, Vietnamese key industrial products in particular and companies in general must face rising competitive pressures right on the domestic market. Despite being dubbed key industrial products, they are mostly simply made products and reliant on foreign inputs. Low labor productivity, personnel level and management capacity of local companies result in failures of domestic products in contract bids that require advanced techniques.

These weaknesses prevent domestic companies from entering production chains run by big foreign brands and corporations. These inherent weaknesses also leave Hanoi’s key industrial products unable to embrace opportunities in the integration process, attract advanced technologies, and draw deep support from foreign corporations. Even manufacturers of flagship industrial products have also not joined hands to form effective production - consumption chains.

Mr. Dam Tien Thang - Deputy Director of the Hanoi Department of Industry and Trade
In 2018, the city had 36 manufacturers with 61 products recognized as flagship industrial products of Hanoi and all belonged to prioritized industries (new material, mold manufacturing, electronics - information technology, precision engineering, etc.) which have strong spillover effects, high added value and strong competitiveness on domestic and foreign markets. Selected products were made on regional-level production lines and ensured environmental standards.

Notably, 61 chosen key industrial products accounted for 35.2% of the city's industrial production value and 7.7% of the city’s gross regional domestic product (GRDP); earned export value of over VND10 trillion. Particularly, 12 companies were named in the Top 500 Vietnamese enterprises and 15 companies led the Hanoi industry with annual revenue of over VND1 trillion. Typically, some manufacturers boasted annual revenue of more than VND4 trillion, including Vicostone Joint Stock Company and Panasonic Appliances Vietnam Co., Ltd.

The Department of Industry and Trade always accompanies and listens to constructive comments and recommendations from certified manufacturers of key industrial products to match their leading roles and positions. In 2019, the city will expand further into startups (feasible projects with high levels of intellectual content) and actively attract foreign direct investment (FDI) enterprises to join. Therefore, the city asks enterprises to further improve the intellectual content for their products to create added value and ripple effects for key industrial products. Especially, the city’s key industrial products need to be coupled with “intelligence and environment” constituted by behavioral culture in enterprises, industrial workers, products rich in gray matter, and environmental friendliness.

Mr. Nguyen Doan Thang - General Director of Rangdong Light Source and Vacuum Flask Joint Stock Company
If we do not focus our support amid our limited resources, our efforts will not work. Hanoi must clearly define which products and which strengths should be given priority to gradually choose new products with long-term growth momentum rather than old ones which account for a high share but stay behind current development trends. The business community is hopeful and eager to see changes in the program in particular and policy support in general to promote business development in the future.

Mr. Nguyen Canh Hong - CEO of Eurowindow
Since recognized as the key industrial product for the first time, Eurowindow brand has increasingly affirmed its strong reputation in the market. Its sales revenue increased from more than VND1,500 billion in 2012 to VND4,205 billion in 2018. After six years being recognized as a key industrial product, Eurowindow's sales nearly trebled. This achievement partly came from this recognition and efforts of Eurowindow's leaders and employees. With its vision, Eurowindow will further affirm its position as a leading solution provider in Vietnam and gradually reach the international level.

The Hanoi key industrial product is a prestigious, influential award. Therefore, Eurowindow hopes the Program Organizing Committee will have more communication activities and support businesses to boost their images and brand reputations. Key industrial products will be introduced and recommended to partners, investors and other persons of interest through trade fairs, exhibitions and trade promotion events. Besides, Eurowindow, like other businesses, hopes to get more incentives in policy, tax, import and export activities.

Mr. Pham Hoa Binh, Board Chairman, General Director
Apart from general communications on mass media, to increase spillover effects of key industrial products, Hanoi needs very specific mechanisms for each group of key industrial products, and support for trade promotion, loan access and tax incentives. Especially, it should have a specific tax policy for businesses that make key industrial products.

Mr. Torben Minko - Managing Director of B. Braun Vietnam
Hanoi needs to inform its detailed development planning where specific information on industrial zone planning is included. From that foundation, local companies can work out their development strategies. The Department of Industry and Trade should publish a directory of companies active in industry, auxiliary sectors and technology services in Hanoi. Accordingly, companies will have information and tools to form consumption networks. At the same time, manufacturers of key industrial products can proactively share information and forge cooperation for joint development.

Mr. Tran Nguyen Quang - Acting General Director of Viglacera Thanh Tri

 

It is necessary to further encourage Vietnamese people to use Vietnamese products and introduce the company’s products to construction projects that the city builds. It is also important to reduce land rents and royalties for companies extracting and processing domestic raw materials for ceramic production such as kaolin, clay and feldspar.

 

 

The city should reduce administrative procedures on import of raw materials and chemicals which cannot be produced domestically to support sanitary ware manufacturing industry in general and our company’s business operations in particular. It should recommend concessional loans for key industrial products, stabilize lending interest rates and USD-VND exchange rates, crack down on smuggling into Vietnam, and avoid disrupting power supply.

Mr. Pham Anh Tuan, General Director of VICOSTONE
VICOSTONE stone product of PHENIKAA Group is one of 10 top-rated products and is recognized as the Top 10 key industrial products in Hanoi City in 2018. For VICOSTONE, we are proud to be chosen and honored out of tens of thousands of businesses with hundreds of products. This shows the care of the government and Hanoi for VICOSTONE products. This recognition helps the company's products reach consumers, especially when VICOSTONE wants to bring the brand to more customers and expand the market. With the Key Industrial Product Award, after the award ceremony, the organizers need to have consultations or surveys with awarded companies and unawarded companies, helping them know what they should do to achieve criteria in the next year. At the same time, meetings before and after the awarding ceremony should be organized to find out how businesses feel and what they want the organizers to do to have more successful awarding.

Mr. Luu Hai Minh - Board Chairman, General Director of Nhat Hai New Technology Joint Stock Company (OIC New)
I propose to establish a club of manufactures of key industrial products in Hanoi where companies with key industrial products can exchange, learn and support each other. I also suggest lending for companies with key industrial products to promote research, development, manufacturing and commercialization.
 

The priority for trade promotion for key industrial products is a necessary condition to quickly bring products to consumers. At the same time, it is necessary to give priority to communications on key industrial products on all available channels of the city. The Department of Industry and Trade needs to act as the contact point for the Investment Fund where companies with key industrial products can ask for loans for R&D investment. For scientific and technological companies with products of high-tech content, R&D is crucial. Currently, businesses in general and science and technology companies in particular need facility investment and policy support to create new high-quality products for the community.
 
Ha Thanh - Quynh Ngoc

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