In the context of attracting FDI capital, Bac Ninh has determined that supporting industry (SI) is a sustainable way to participate in global production and business chains. Vietnam Business Forum had an interview with Mr Vu Duc Quyet, Director of Bac Ninh Department of Industry and Trade around this issue. Nguyet Tham reports.
Could you please tell us about the development situation of the SI enterprises in Bac Ninh province in the past time?
In recent years, SI has grown quite strongly in terms of quantity and quality, mainly in the processing industry. If in 2012, there were 126 SI enterprises s in the industry, accounting for 10.1 percent of the processing and manufacturing enterprises. By June 2017, there were 418 enterprises, more than 3 times. The average growth rate of SI enterprises was 27.1 per cent. Bac Ninh gradually formed the SI community able to supply to large corporations. At present, there are 272 FDI enterprises, with the investment capital of US$ 3.1 billion, accounting for 87 percent, creating production value over 78 percent of the sector, attracting about 80,000 workers. Meanwhile, there are 146 DDI enterprises, with investment capital of US$0.5 billion, attracting about 10,000 workers (Vietnamese pure enterprise has a considerable increase but they are still weak in terms of capital and technology). However, that development has formed a system of SI in three key industries of the province, namely electronics, precision engineering, and processing of high-tech agricultural products.
In your opinion, have SI enterprises developed to match the potential and advantages of the province?
In the past years, the SI enterprises have advanced. Before 2010, they mainly imported components, accessories, semi-finished products, etc to assemble and export. However, SI enterprises have not met the needs of the main producers, the system of suppliers is not developed to create detailed network and FDI enterprises still monopolize this value chain. At present, SI enterprises create about 20 percent of industrial production value while domestic enterprises only contribute about 26 percent of that value and account for 34 percent of the value of providing packaging products, modular assembly, simple details.
In terms of technical infrastructure, social infrastructure, services for production ... the province has the capacity to receive high-tech projects, ensuring that these projects develop safely and in long-term. Thus, the opportunities for FDI enterprises remain high. In order to develop the industry in a sustainable and continuous manner, it is necessary to promote faster and more strongly SI (to increase the localization rate) so as not only to meet domestic demands, but also to meet regional and international markets.
To achieve the goal of becoming an important "chain" in the global supply chain of multinational corporations, which mechanism or policy does the SI sector need?
In the target to 2020 and vision 2030, Bac Ninh strives to become a centre of high technology industry, in which electronic industry is the spearhead industry; converging enterprises and multinational corporations with highly competitiveness in international integration. In order to achieve the target, the province has many large and synchronous solutions for concentrated industries for three key sectors, in which SI is identified as a major target of development policy and a solution to develop sustainable development.
Therefore, the province continues to attract FDI into hi-tech environmentally friendly sector, research and development sector; supporting and encouraging domestic enterprises to innovate themselves and meet the standards of participating in the value chain brought by FDI enterprises. Therefore, the Bac Ninh Department of Industry and Trade has the responsibility to continue propose and give advice to concretize into technical and economic criteria in each period to meet the requirements of the province.
Currently, the Department is drafting policies to support SI in the province comply with Decree 111/2015 / ND-CP and prioritize SI in 3 key sectors of the province. It is a policy to create breakthroughs to implement the solutions in the SI development plan approved by the provincial People's Committee in Decision No. 229 / QD-UBND dated June 30, 2015 which is focused on technology with the goal to 2020, striving to master the new technology mainly from FDI enterprises invested in the province. The province also supports FDI enterprises to participate in the chain of production and supply of components, spare parts, supplies, packaging, etc.