Supply industry needs to tap the global chain

Technological and financial limitations are major development constraints for the local supply industry, Bui Quang Chuyen, Chairman of the Viet Nam Engine and Agricultural Machinery Corporation (VEAM), tells VietnamPlus.

Where does the Vietnamese supply industry stand now?

The supply industry has progressed, but not yet caught up with the country’s development demands. This is partically due to limited technological standards and difficulties in finances.

RelatedArticles

NVIDIA’s Expansion in Vietnam’s AI Market Indicates Strong Investor Confidence

December 18, 2024

Apple’s $1 Billion Investment in Indonesia: Navigating Local Compliance and Driving Market Expansion

December 13, 2024

Thailand and the UK’s Enhanced Trade Partnership: An Overview

December 12, 2024

Exploring the ASEAN Education Market: Trends, Challenges, and Investment Opportunities

November 30, 2024

In 2015, the Government issued Decree 111/CP that aimed to give fresh growth impetus to the industry, but many shortcomings persist, including inadequate the lack of preferential interest rates on loans for investment projects.

In addition, many localities do not have policies to encourage businesses to invest in the supply industry. There is no support for investment in technology, in technology transfer, or preferential tax policies, especially for agricultural machinery. For instance, there is no import tax refund on materials and fuels used to make agricultural machinery and other supply industry items.

FDI businesses regularly complain that it is difficult to find suppliers (of spare parts, accessories etc.) in Viet Nam. What can we do to be a bigger part of the production chain?

To join in the global supply chain, particularly in the automobile industry, hi-tech production knowledge is required so that we are competitive in terms of product quality, price, packaging and delivery. There are many other factors as well.

VEAM currently has three companies in the supply industry; Machinery Spare parts No.1, Pho Yen Mechanical JSC and Song Cong Diesel Company. About 70 per cent of the companies’ output is supplied to Japanese motorbike makers.

We know that the businesses will have to invest in high-tech machinery, with accuracy and capacity of foremost importance.

To acquire and use advanced technologies, VEAM has to send its staff and workers to training courses in foreign countries and hire experts to directly train workers here.

Were there foreign businesses specialising in agricultural machinery that bought VEAM shares during its recent initial public offering…

Source link