Dong Nai enterprise to join global supply chain

​Footwear production is a commodity that will have a big shift to Dong Nai. Footwear production in Colored Rubber Footwear Joint Stock Company (Bien Hoa City)

Dong Nai is home to the country's leading industrial development, so FDI enterprises really hope to invest in this place. This is also the place to supply large input products, so FDI enterprises that want to invest in production can easily find associated partners that supply raw materials and inputs.

Rearranging global supply chains

Recently, the global industrial product supply chain focused on China and India. Therefore, when the COVID-19 occurred in these countries, the supply of raw materials and products in the world was severely affected. Hence, large corporations and enterprises in the world are thinking of reallocating their supply chains to not focus too much on a few countries. In the global supply chain movement, Vietnam is a country with many opportunities to ‘catch the wave’. Because during the COVID-19, Vietnam had a fairly good defense, political stability, and high economic growth compared to other countries in the region. These are the top factors for FDI enterprises to choose to bring orders and production lines to Vietnam. Dong Nai is one of the provinces chosen by many FDI enterprises.

Mr. Lee Jeong Man, Head of the Representative Office Of Gyeongnam Province in Ho Chi Minh City, said: “Many Korean enterprises have invested in this province for more than 20 years and are quite successful. Therefore, in the past 4 years, the number of Korean enterprises investing in Dong Nai has increased rapidly. In the coming time, I will be a ‘link’ to support Gyeongnam province businesses to invest in the province in all fields”. Currently, Korea has invested nearly USD 6.8 billion in Dong Nai, ranking first of total of countries and territories investing in this province. Korean enterprises mostly invest in supporting industries for the textile, garment, footwear, electronics, machinery and equipment industries. Products made with 70-90% volume are for export to other countries. Korean businesses, when investing in the province, also find partners to supply input products for themselves, so they contribute to bringing businesses in the area to join the global supply chain.

Theo Phó giám đốc Sở Công thương Lê Văn Lộc, kim ngạch xuất khẩu của lĩnh vực công nghiệp hỗ trợ ở Đồng Nai chiếm hơn 60% trong tổng kim ngạch xuất khẩu của tỉnh. Thị trường xuất khẩu chính là Hoa Kỳ, Nhật Bản, Hàn Quốc, Trung Quốc... Đa số các sản phẩm được xuất cho các tập đoàn, DN lớn trên các lĩnh vực, điều này chứng tỏ các DN ngày càng tham gia sâu vào chuỗi cung ứng toàn cầu.

According to Deputy Director of the Department of Industry and Trade Le Van Loc, the export turnover of the supporting industry in Dong Nai accounts for over 60% of the total export turnover of the province. The main export markets are the United States, Japan, Korea, China, etc. The majority of products are exported to large corporations and enterprises in all fields, which proves that businesses are increasingly participating in the global supply chain.

Shifting many sectors

Footwear production is a commodity that will have a big shift to Dong Nai. Footwear production in Colored Rubber Footwear Joint Stock Company (Bien Hoa City)

The items which are expected to have much shift to Dong Nai in the coming time are footwear; textile; machinery and spare parts; computers, electronic products and components, etc. Big corporations all have discussions about global supply chain redistribution. Accordingly, in the coming time, many corporations and enterprises will have a shift of production to ASEAN countries.

Mr. Nguyen Duc Thuan, Chairman of Vietnam Leather, Footwear and Handbag Association, shared: “Major footwear groups in the world are planning to move about 15-20% of their supply chains from China to other countries. Vietnam is a place that can respond quickly to large and difficult orders, so it will be included in the selection criteria. Once the COVID-19 epidemic settles down, it is likely that many orders of footwear and bags will be moved to Vietnam.

The pandemic made the world economy severely affected and negative growth, but some Dong Nai's exports still increased such as computers, electronic products and components; wooden product; machinery, equipment and spare parts. Recently, at the Government's online meeting with ministries, provinces and cities to solve problems to promote economic development, Minister of Planning and Investment Nguyen Chi Dung emphasized: “In the situation of epidemics and negative growth in the world economy, Vietnam is one of the few countries that still maintain positive growth, which is a high plus point for FDI enterprises to move its production to. In the near future, Vietnam will be a destination that many multinational corporations invest in to expand production and export.”

Dong Nai will be the destination chosen by many FDI enterprises to move orders. Enterprises in Dong Nai are currently in a state of waiting for the epidemic to settle down, s so that trade with other countries will be more favorable and orders will be 'overflowed'.

                                                                      Vi Quan