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Foundation for central Vietnam’s supporting industry development remains weak overall despite several strengths

Foundation for central Vietnam’s supporting industry development remains weak overall despite several strengths

Thursday, December 22, 2022, 16:40 GMT+7
Foundation for central Vietnam’s supporting industry development remains weak overall despite several strengths
Delegates on the sidelines of the seminar themed 'Boosting Connectivity for Industrial Development in Central Region' held in Quang Nam Province, central Vietnam, December 17, 2022. Photo: Tan Luc / Tuoi Tre

The development of supporting industries in central Vietnam was on the agenda of a seminar themed 'Boosting Connectivity for Industrial Development in Central Region' in Quang Nam Province, central Vietnam, jointly held by Tuoi Tre (Youth) newspaper, the Industry Agency under the Ministry of Industry and Trade, and the People’s Committee of Quang Nam Province last weekend.

In his opening remarks at the seminar, Le The Chu, editor-in-chief of Tuoi Tre, acknowledged that central Vietnam has many strengths, such as deep-water ports.

Seaport-based industries, including oil refining, shipbuilding, steel production, heavy industry, automobile assembly, have many development opportunities, Chu said.

Many industrial products of the central region have been exported to countries around the world, fetching billions of U.S. dollars for the country annually. 

The penetration of some leading enterprises into the region has attracted hundreds of subcontractors and supporting industry firms, leading to pervasive development. 

Still, many experts and large companies present at the seminar agreed that the foundation for supporting industries in the central region is still too weak to meet development demands, especially in high-tech sectors.

More than 150 delegates and experts discuss the establishment of a supporting industry ecosystem in the central region. Photo: Huu Hanh / Tuoi Tre

More than 150 delegates and experts discuss the establishment of a supporting industry ecosystem in the central region of Vietnam. Photo: Huu Hanh / Tuoi Tre

According to these experts, connectivity between enterprises and localities in the region remains loose and fails to create a strong supply system.

The supply chain shortage has reduced enterprises’ competitive advantages. Circuit board and electronics factories located in the central region are heavily reliant on the supply chains of industrial hubs in the north and south of Vietnam, as well as in other countries, Chu added.

As a locality with high internal revenue in the central part, which has contributed enormously to the automobile engineering sector, Quang Nam Province has an economy that has grown significantly over the past several years despite the impacts of the COVID-19 pandemic. 

Chairman of the Quang Nam People’s Committee Le Tri Thanh used the seminar as a platform to discuss the need to develop greater connectivity in the region.

“When discussing the connectivity needed for development in the central region, many people often think of tourism," Thanh said.

"In reality, tourism agencies in the central region have joined hands to participate in the ‘heritage road’ program.

Chairman of the Quang Nam People’s Committee Le Tri Thanh speaks at the seminar. Photo: Tan Luc / Tuoi Tre

Chairman of the Quang Nam People’s Committee Le Tri Thanh speaks at the seminar. Photo: Tan Luc / Tuoi Tre

“Meanwhile, localities are still looking forward to the connectivity in industry to reach industrialization and modernization goals."

Thanh also shared his hope that central provinces will establish an industrial development linkage in the near future that is based on the strengths of each locality, particularly the outstanding development of the Chu Lai Open Economic Zone, which is boosted by the success and innovation of Truong Hai Auto Corporation (Thaco) and is expected to become a ‘nucleus’ that will connect the area with other locales and industries.  

Dang Ba Du, director of the Quang Nam Department of Industry and Trade, said the reality of industrial development, especially amid the pandemic, has helped leaders acknowledge the roles of supply chains and the connectivity of industries.

This is not a new issue as not only enterprises but also state management agencies have paid significant attention to the roles of industrial chains and clusters.

According to Du, over the past few years, industrial parks have mushroomed without planning, which has created loose connectivity between nuclear enterprises and other firms and economic entities.

Workers assemble a KIA auto in a Thaco’s factory in the Chu Lai Open Economic Zone in Quang Nam Province, central Vietnam. Automobile engineering is currently a bright spot of Quang Nam Province. Photo: Tan Luc / Tuoi Tre

Workers assemble a KIA car in a Thaco factory in the Chu Lai Open Economic Zone in Quang Nam Province, central Vietnam. Automobile engineering is currently a bright spot of Quang Nam Province. Photo: Tan Luc / Tuoi Tre

Therefore, the establishment of a supporting industry ecosystem would be meaningful for enterprises and likely a decisive factor of the sustainable economic development of the entire region.

The domestic auto engineering sector has some 20 large assemblers, only 81 first-tier suppliers, and 145 second- and third-tier suppliers, Du informed.

These figures are alarming as Thailand, for example, has 16 large auto assembly firms but nearly 700 first-tier suppliers and 1,700 second- and third-tier suppliers.

“We are aware of the importance of the establishment of an industrial development ecosystem, including building clusters of manufacturing sectors in which localities have advantages. For instance, Quang Nam has strengths in auto engineering in which Thaco plays a nuclear role,” Du said.

Dang Ba Du, director of the Quang Nam Department of Industry and Trade. Photo: Huu Hanh / Tuoi Tre

Dang Ba Du, director of the Quang Nam Department of Industry and Trade. Photo: Huu Hanh / Tuoi Tre

Sharing Du’s view, Nguyen Duc Huy, deputy director of the Department of Industry and Trade of Quang Ngai Province, a neighbor of Quang Nam, said that most provinces have large industrial enterprises which are nuclei boosting the growth of supporting industry enterprises to create the pervasive development.

According to Huy, industry has contributed significantly to the economic growth and budget revenue and become the key export earner of the province. 

The province is home to the Dung Quat Economic Zone and many industrial parks and clusters which have attracted many projects.

With its potential and strengths, Quang Ngai will develop industries in groups, including processing-manufacturing, oil refining, shipbuilding, electronics-telecommunication, electrification, and clean energy.

A truck assembly line at Chu Lai-Truong Hai Truck Assembly & Manufacturing Co. Ltd. Photo: Tan Luc / Tuoi Tre

A truck assembly line at Chu Lai-Truong Hai Truck Assembly & Manufacturing Co. Ltd. Photo: Tan Luc / Tuoi Tre

“I think that enhancing the cooperation among provinces in the region, investing in key areas, and bolstering the connectivity for industrial development are important to create breakthroughs in industrial development,” Huy said.

The seminar 'Boosting Connectivity for Industrial Development in Central Region' was jointly held by the People’s Committee of Quang Nam Province, the Industry Agency under the Ministry of Industry and Trade, and Tuoi Tre in Tam Ky City, Quang Nam Province.

The seminar is part of the Industry Forum 2022 – Building Independent Industries initiated by Tuoi Tre in September this year.

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The development of supporting industries in central Vietnam was on the agenda of a seminar themed 'Boosting Connectivity for Industrial Development in Central Region' in Quang Nam Province, central Vietnam, jointly held by Tuoi Tre (Youth) newspaper, the Industry Agency under the Ministry of Industry and Trade, and the People’s Committee of Quang Nam Province last weekend.

In his opening remarks at the seminar, Le The Chu, editor-in-chief of Tuoi Tre, acknowledged that central Vietnam has many strengths, such as deep-water ports.

Seaport-based industries, including oil refining, shipbuilding, steel production, heavy industry, automobile assembly, have many development opportunities, Chu said.

Many industrial products of the central region have been exported to countries around the world, fetching billions of U.S. dollars for the country annually. 

The penetration of some leading enterprises into the region has attracted hundreds of subcontractors and supporting industry firms, leading to pervasive development. 

Still, many experts and large companies present at the seminar agreed that the foundation for supporting industries in the central region is still too weak to meet development demands, especially in high-tech sectors.

More than 150 delegates and experts discuss the establishment of a supporting industry ecosystem in the central region. Photo: Huu Hanh / Tuoi Tre

More than 150 delegates and experts discuss the establishment of a supporting industry ecosystem in the central region of Vietnam. Photo: Huu Hanh / Tuoi Tre

According to these experts, connectivity between enterprises and localities in the region remains loose and fails to create a strong supply system.

The supply chain shortage has reduced enterprises’ competitive advantages. Circuit board and electronics factories located in the central region are heavily reliant on the supply chains of industrial hubs in the north and south of Vietnam, as well as in other countries, Chu added.

As a locality with high internal revenue in the central part, which has contributed enormously to the automobile engineering sector, Quang Nam Province has an economy that has grown significantly over the past several years despite the impacts of the COVID-19 pandemic. 

Chairman of the Quang Nam People’s Committee Le Tri Thanh used the seminar as a platform to discuss the need to develop greater connectivity in the region.

“When discussing the connectivity needed for development in the central region, many people often think of tourism," Thanh said.

"In reality, tourism agencies in the central region have joined hands to participate in the ‘heritage road’ program.

Chairman of the Quang Nam People’s Committee Le Tri Thanh speaks at the seminar. Photo: Tan Luc / Tuoi Tre

Chairman of the Quang Nam People’s Committee Le Tri Thanh speaks at the seminar. Photo: Tan Luc / Tuoi Tre

“Meanwhile, localities are still looking forward to the connectivity in industry to reach industrialization and modernization goals."

Thanh also shared his hope that central provinces will establish an industrial development linkage in the near future that is based on the strengths of each locality, particularly the outstanding development of the Chu Lai Open Economic Zone, which is boosted by the success and innovation of Truong Hai Auto Corporation (Thaco) and is expected to become a ‘nucleus’ that will connect the area with other locales and industries.  

Dang Ba Du, director of the Quang Nam Department of Industry and Trade, said the reality of industrial development, especially amid the pandemic, has helped leaders acknowledge the roles of supply chains and the connectivity of industries.

This is not a new issue as not only enterprises but also state management agencies have paid significant attention to the roles of industrial chains and clusters.

According to Du, over the past few years, industrial parks have mushroomed without planning, which has created loose connectivity between nuclear enterprises and other firms and economic entities.

Workers assemble a KIA auto in a Thaco’s factory in the Chu Lai Open Economic Zone in Quang Nam Province, central Vietnam. Automobile engineering is currently a bright spot of Quang Nam Province. Photo: Tan Luc / Tuoi Tre

Workers assemble a KIA car in a Thaco factory in the Chu Lai Open Economic Zone in Quang Nam Province, central Vietnam. Automobile engineering is currently a bright spot of Quang Nam Province. Photo: Tan Luc / Tuoi Tre

Therefore, the establishment of a supporting industry ecosystem would be meaningful for enterprises and likely a decisive factor of the sustainable economic development of the entire region.

The domestic auto engineering sector has some 20 large assemblers, only 81 first-tier suppliers, and 145 second- and third-tier suppliers, Du informed.

These figures are alarming as Thailand, for example, has 16 large auto assembly firms but nearly 700 first-tier suppliers and 1,700 second- and third-tier suppliers.

“We are aware of the importance of the establishment of an industrial development ecosystem, including building clusters of manufacturing sectors in which localities have advantages. For instance, Quang Nam has strengths in auto engineering in which Thaco plays a nuclear role,” Du said.

Dang Ba Du, director of the Quang Nam Department of Industry and Trade. Photo: Huu Hanh / Tuoi Tre

Dang Ba Du, director of the Quang Nam Department of Industry and Trade. Photo: Huu Hanh / Tuoi Tre

Sharing Du’s view, Nguyen Duc Huy, deputy director of the Department of Industry and Trade of Quang Ngai Province, a neighbor of Quang Nam, said that most provinces have large industrial enterprises which are nuclei boosting the growth of supporting industry enterprises to create the pervasive development.

According to Huy, industry has contributed significantly to the economic growth and budget revenue and become the key export earner of the province. 

The province is home to the Dung Quat Economic Zone and many industrial parks and clusters which have attracted many projects.

With its potential and strengths, Quang Ngai will develop industries in groups, including processing-manufacturing, oil refining, shipbuilding, electronics-telecommunication, electrification, and clean energy.

A truck assembly line at Chu Lai-Truong Hai Truck Assembly & Manufacturing Co. Ltd. Photo: Tan Luc / Tuoi Tre

A truck assembly line at Chu Lai-Truong Hai Truck Assembly & Manufacturing Co. Ltd. Photo: Tan Luc / Tuoi Tre

“I think that enhancing the cooperation among provinces in the region, investing in key areas, and bolstering the connectivity for industrial development are important to create breakthroughs in industrial development,” Huy said.

The seminar 'Boosting Connectivity for Industrial Development in Central Region' was jointly held by the People’s Committee of Quang Nam Province, the Industry Agency under the Ministry of Industry and Trade, and Tuoi Tre in Tam Ky City, Quang Nam Province.

The seminar is part of the Industry Forum 2022 – Building Independent Industries initiated by Tuoi Tre in September this year.

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Thanh Ha - Truong Trung / Tuoi Tre News

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