Increase in FDI opens up opportunity to develop local supporting industries

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Disbursed foreign capital reached over US$1.6 billion in January, up 6.8% year on year. This is a good sign for Vietnam as it has received more attention from foreign investors, with the expectation of becoming the world’s new production center.

In January 2022, disbursed foreign capital reached over US$1.6 billion, up 6.8% over the same period last year. This is a good sign for Vietnam as it has received more attention from foreign investors, with the expectation of becoming a new production center of the world.

The supporting industry will also have many favorable factors to help the field develop more strongly.

For example, Apple has moved production lines to Vietnam while investing in more factories or expanding production at existing facilities such as Foxconn, Luxshare, Pegatron, Wistron.

Samsung has decided to develop in Vietnam by building the largest Research and Development Center in Southeast Asia, worth $220 million in Hanoi, and has plans to expand many factories. Most recently, Samsung invested an additional $920 million in a new manufacturing project in Thai Nguyen province.

Some US businesses are looking for more than 300 domestic supporting industry suppliers to supply thousands of details and components… And recently, Panasonic has moved its refrigerator and washing machine factory from Thailand to Vietnam.

The signals partly show that Vietnam’s economy has been regaining strong growth momentum.

Great opportunity for local supporting industry

According to Mr. Bui Minh Hai, Chairman of Hanoi Plastics Joint Stock Company, the fact that foreign firms find sources of supply in the domestic market is an opportunity for local enterprises to participate in the supply chain of high value.

Hanoi Plastics JSC is a supporting industry enterprise specializing in providing plastic components for foreign firms such as Honda, Toyota, Samsung, Panasonic, LG, Daikin… In recent years, the company has participated in various cooperation consulting program of foreign partners, in order to improve its production capacity, and reduce the error rate in the production process.

This is one of the effective solutions to help the firm improve its competitiveness. The company also offers new development strategies to attract customers.

Photo: Mr. Choi Jo Hoo, General Director of Samsung Vietnam (third from right), during a visit to the factory of a Vietnamese partner in 2020.

By changing strategies, flexibly responding, and quickly recovering during the pandemic, Hanoi Plastics JSC is expected to anticipate market demand and grow strongly in 2022.

It is predicted that in 2022 exports in general and exports of phones and components will continue to grow strongly when the world economy recovers. This is good news for the electronics industry and the electronics supporting industry.

Hoang Viet

Vietnam is a destination for many multinational corporations but the supporting industry is less developed.

Vietnam is looking to work closely with foreign firms such as Samsung and Toyota to boost the supply of parts within the country, according to the Ministry of Industry and Trade.

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