To make use of the global shifting of foreign investment, local firms in the supporting industry have been advised to enhance their capacity to join global supply chains, according to insiders.

At present, a series of giant manufacturers such as Panasonic, Bosch, TTI, Samsung, and Klaus, are looking for additional suppliers and increasing the localisation rate in order to optimise production efficiency

Most notably, following the country’s successful efforts to contain the novel coronavirus (COVID-19) pandemic, several enterprises from Europe and the United States are seeking Vietnamese suppliers of spare parts due to the global disruption of supply sources.

To welcome the shifting of foreign investment, numerous domestic companies have made great strides to improve their capacity in the race to become the main suppliers for large international corporations.

An Phat Holdings Group (APH) is a case in point. Three APH affiliates has deployed a consulting scheme to develop the supporting industry introduced by the Ministry of Industry and Trade and Samsung since 2019. The programme aims to increase the localisation rate, develop high-tech products, expand investment, and elevate their position within the global supply chain.

Dinh Xuan Cuong, vice chairman and CEO of APH Group, said the firm is anticipated to increase the localisation rate for components and spare parts that are used to manufacture mobile phones, cars, motorbikes, printers, and washing machines.

“We are proud to be a leading enterprise based in Hai Duong province that is capable of manufacturing spare parts for mobile phones and printers, meeting international standards,” Cuong told congthuong.vn.

Dao Duy Luan, deputy director of Systech Technology & Trading JSC, revealed that several Vietnamese enterprises have become product suppliers for large corporations, including Samsung, LG, Canon, Meiko, Brother, and Nidec, due to their automated production lines which make use of advanced technologies.

He underlined the importance of improving product quality and offer affordable prices to establish stable long-term relationships with foreign businesses, adding that the company has so far provided accessories to approximately 300 customers that are FDI enterprises originating from Japan and the Republic of Korea, including giants such as Sam Sung, Canon, and Brother.

According to data released by localities nationwide, the supporting industry has rapidly become a magnet for foreign investment. Ho Chi Minh City for instance has attracted 23 newly licensed projects capitalized at roughly US$141 million in the supporting industry during the initial ten months of the year.

Le Bich Loan, deputy director of Saigon High-Tech Park (SHTP), stated that several SHTP businesses have received enquiries from foreign investors about the possibility of becoming their suppliers. However, she said local firms should work to enhance their capacity in order to fully grasp the opportunity.

She pointed out that in line with current financial capacity, production capacity, technological level, and human resources, only a few Vietnamese enterprises are able to meet the criteria set by foreign corporations. In addition, with the support of state management agencies, banks, and  buyers, these firms will be able to gradually fulfill their goals and become suppliers for international groups.