Japan has a largest number of companies in Hanoi. Many assembling companies have very big revenues such as Canon, Yamaha, Toto and Inax. They are also main forces to generating export and domestic revenues by their highly competitive industrial products. Developing supporting industries to serve Japanese assembling companies in Hanoi is now a choice for many Vietnamese enterprises as well as the concern of local authorities because this move benefits both sides if it is successful.
According to the information from the Industry Management Committee under the Hanoi Department of Industry and Trade, for years, domestic parts suppliers in Hanoi like Export Mechanical Tool Stock Company, Thang Long Metal Wares Company, Hanoi Plastics Company, Dong Anh Chain and Free-wheel Company, etc. have perseveringly pursued and become reliable parts suppliers for Japan’s leading companies like Toyota, Honda, Yamaha and Suzuki. Thus, parts of these local companies become a part of the value of globally renowned trademarks. Joining this chain, domestic enterprises have made a long progress in governance, technological level, economic efficiency, income, branding, reputation and competition.
Mr LuuMinh Duc, Deputy Director of Industry Management Committee, said: In fact, becoming parts suppliers for Japanese is not very easy for Vietnamese enterprises because it requires continuous efforts and nonstop operations. Taking part in this process, enterprises have to suffer severe pressure because they have to renovate management and technology, control quality as well as skills and behaviours of labourers. Normally, Japanese enterprises require strict quality check. They also require improving quality, lowering prices and punctual delivery. They will try with small volume of parts before ordering in large quantity. These are actually challenges Vietnamese enterprises. However, if they satisfy their requirements, Vietnamese enterprises will become regular suppliers for them. They are also very serious in settling contract payments. They are also active and responsible partners in supplying materials and instructions Vietnamese enterprises in executing contracts.
In fact, Japanese enterprises highly appreciate products Hanoi like Export Mechanical Tool Stock Company, Thang Long Metal Wares Company, Hanoi Plastics Company, Dong Anh Chain and Free-wheel Company and rate them higher products made by other FDI enterprises. However, such enterprises are very few so far. Most products are simple and lowly valued. The weakness of supporting industries is the major worry of Japanese enterprises when they expand operations in the city. According to warnings from Japanese enterprises, if Vietnam does not make improvement to the above weaknesses, domestic industries will fall into stagnation, even disappear, in the midst of stiff competition in the global integration process. As a result, Vietnam will be a producer of lowly valued products and is driven by foreign companies.
Before that context, the government is considering the issue of a decree on preferences to shore up the development of supporting industries. According to the draft documents aimed at collecting opinions and advice, the government will offer specially attractive incentives for parts producers, supporting industrial complexes, and vocational training units. Many expect this regulation will take effect soon to accelerate the development of supporting industries.
Japanese Ambassador to Vietnam Mitsuo Sakaba, who is very concern about the Vietnamese supporting industries, said: “The remaining time to make or break the Vietnamese supporting industries is not long. The development of supporting industries will decide the life or death of Vietnamese industry. This also depends on the competitiveness of the Vietnamese economy against other economies in Southeast Asia to develop or not.”
Also according to Mr Mitsuo Sakaba, instead of spending time on discussions and conferences, Vietnam needs to quickly decide action plans and implement them to develop supporting industries. Notably, although Japanese enterprises are keen on seeking Vietnamese suppliers, they never lower selection criteria. If Vietnamese enterprises do not take the chance, this will go to parts suppliers in other nations. (KTDT)
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