Reed Tradex – the organizer of “METALEX Vietnam” has announced the cooperation with the Japan External Trade Organization (JETRO) in Ho Chi Minh City, as well as the Investment & Trade Promotion Centre (ITPC) and Ho Chi Minh City Centre of Supporting Industries Development (CSID) to co-organize “Supporting Industry Show 2018” to tighten up the relationship between Vietnam- Japan supporting industries and strengthen the key pillars- electronic, automotive – to develop Vietnam’s manufacturing.
Recently, Vietnam has made steady progress in improving its investment climate. At the press conference on 26 July 2018, Mr. Suttisak Wilanan, Deputy Managing Director of Reed Tradex cited a number of positive indicators that “Vietnam went up five points to 55th place from last year in the World Economic Forum’s Competitiveness Index; and ranked 68th in the 2018 World Bank’s ease of doing business ranking, up 31 places since 2014. Vietnam’s network of 16 bilateral and multilateral free trade agreements is among the best that manufacturers will be able to find in a country at this point on the value chain. These trade agreements dramatically reduced tariffs, anchored difficult domestic reforms, and opened much of the economy to foreign investment.”
Same point of view, the representative from Japan External Trade Organization (JETRO) in Ho Chi Minh City, Mr. Takimoto Koji – Chief Representative shared more “The investment amount of registered FDI from Japan into Vietnam has increased significantly each year. It was a great leap forward, from 2150 million USD of total registered amount in 2016 to 8,640 million USD in 2017; the new registered amount takes up significantly from 1182 million USD to 7746 million USD. 70% of Japanese companies in Vietnam that answered the survey said their business will expand in the next 1- 2 years. It is the highest among the 6 countries in our survey which included Philippine, Indonesia, Malaysia, China, Thailand and Vietnam”
According to General Statistics Office, the index of industrial production (IIP) in the first quarter of 2018 has gained the highest year-on-year growth rate of 11.6% in the past three years. The manufacturing and processing industry continued to grow constantly at 13.9%, in which electronic is still considered as a key sector. Meanwhile, the automotive industry is becoming more active as domestic and FDI firms are rushing to set plan and respond to the challenge of the zero import duties applied earlier this year.
At the press conference, Mr. Suttisak Wilanan expressed his optimistic view on the exciting return of the automotive industry in Vietnam, and gave evidences such as the “Made in Vietnam” automobiles plan from Vinfast – a subsidiary of Vingroup, has invested and decided to cooperate with Italy’s leading design firm, Pininfarina and German luxury car company, BMW. At the same time, the over-20-year-old manufacturer Thaco also inaugurated the biggest and most modern automobile manufacturing factory in Southeast Asia last March to dominate the automobile industry.
Mr. Suttisak Wilanan insisted that “More than ever, car firms need to support and call on supporting industry businesses to supply them the necessary components”. He added more “There are over 30,000 parts per vehicle, it is almost impossible to have all components in the same country. That is why investors tend to establish factories in neighboring countries, surrounding their manufacturing base. Vietnam is in a strategic location astride, located in the center of ASEAN with many major seaports. Therefore, Vietnam can coordinate with key players – Thai & Indonesian car makers to set up a sustainable development cluster for the automobile industry.”
In additional, Mr. Luu Hoang Long, Chairman of Vietnam Electronic Industries Association (VEIA) said at the press conference that “According to data from the Ministry of Industry and Trade, the total number of enterprises currently involved in the supporting industry sector is 661 (591 enterprises produce electronic components, 56 enterprises produce computers and peripherals, 14 companies producing magnetic tapes and disks). However, the number of domestic enterprises in the supporting industries of the electronics as FDI’s supplier is not much due to the internal constraints of the enterprises, and also the limitation of understanding between the two sides, the connection between FDI enterprises and domestic enterprises is very necessary”.
For these reasons, Reed Tradex will cooperate with JETRO, ITPC and CSID to co-organize the exhibition “Supporting Industry Show 2018” at this year’s event. This alliance will empower the transfer of new technologies and the expansion of business networks between Japanese and Vietnamese businesses, which are vital to sharpen the competitive edges of supporting industry. Mr. Takimoto Koji shared “Local Procurement Ratio (LPR) of Vietnam was 33.2 % in 2017. It is the lowest among the 6 countries in our survey. With the “Supporting Industry Show 2018”, we aim to raise the local procurement rate by connecting companies at the exhibition.”
According to information from Mr. Takimoto Koji, to create “win – win relationship” between Japan and Vietnam at “Supporting Industry Show 2018”, there will be 18 Japanese major companies will join as Buyer. Another 30 Vietnam companies will exhibit as Supplier, which will be leaded by ITPC and CSID.
Supporting Industry Show will be organized in Ho Chi Minh City from 11-13 October, 2018
Participation in “Supporting Industry Show 2018” is a part of the comprehensive strategy plan for supporting industry (SI) development by ITPC in 2015-2020 and 2021-2025. According to Ms. Cao Thi Phi Van – Vice Director of the Investment & Trade Promotion Centre (ITPC), the orientation consists of 3 points. Firstly, to create a domestic production networks which can manufacture finished products, and engaged to the global value chain. Secondly, to attract more FDI to invest in high-value SI products. And thirdly, to support SMEs to be able produce SI products in the direction of import substitution and increase value added.
“There is great potential to develop the mechanical sector in the Ho Chi Minh City, especially the automobile industry as the city’s Index of Industrial Production (IIP) in 2017 increased by 7.9% compared to 2016. This year, CSID will work closely with JETRO to bring manufacturer in Ho Chi Minh City to join the “Supporting Industry Show 2018”. This is great opportunities for companies to raise supply capacity, connect with more domestic and oversea partners, thus gradually joining the global supply chain”, said Ms. Le Nguyen Duy Oanh – Vice Director of Ho Chi Minh City Centre of Supporting Industries Development (CSID).
“Supporting Industry Show 2018” will be organized on 11-13 October, 2018 at Saigon Exhibition and Convention Center (SECC). At the same time, “METALEX Vietnam 2018” will gather and introduce 500 brands of latest machine tools & metalworking solutions for production upgrade from over 25 countries. The exhibition is expected to be more comprehensive with the co-location of “NEPCON Vietnam 2018” which will be a platform for electronics manufacturers to meet with providers of technologies and solutions from 200 brands, 20 countries.
You may get more information from the website: www.metalexvietnam.com or www.nepconvietnam.com