Opportunities for businesses to join the global supply chain

​According to the Department of Industry and Trade, Dong Nai has nearly 150 Vietnamese enterprises producing in the field of supporting industries for many production industries such as: textiles, footwear, machinery, equipment, tools, spare parts and components, electronics, and wood products, etc.

 Vinastar Technical Plastic Commercial Production Company Limited (based in Bien Hoa City) produces machinery components to supply to FDI enterprises.

*Finding opportunity in difficulty

The Covid-19 pandemic has led to difficulties in importing raw materials from the Chinese and Indian markets. Therefore, many FDI enterprises in Vietnam have changed their strategies in finding suppliers of input materials, prioritizing finding domestic materials.

Mr. Le Tri Minh, Chairman of Dong Nai Supporting Industrial Products Enterprises Association cum Director of Dai A Thanh Company Limited said: "The association has more than 30 members who are Vietnamese enterprises in the field of supporting industries. Products of businesses in the association are mostly sold to FDI enterprises in Dong Nai and many other provinces. Recently, FDI enterprises have expanded their association with Vietnamese enterprises to supply products to each other thus help Vietnamese enterprises expand their output.

Finding a domestic source of raw materials bring about many advantages FDI for enterprises such as: reducing transportation costs, waiting time, taking initiative in production, increasing the localization rate of products to enjoy incentives from Free Trade Agreements that Vietnam has adopted.

Mr. Mai Khanh, Director of Vinastar Technical Plastic Commercial Production Company Limited (Bien Hoa City) said: “The company specializes in manufacturing all kinds of machinery components and equipment for domestic consumption and export to Japan, Korea and some other countries. During the Covid-19 pandemic, our exports have faced many difficulties because many contracts extended the delivery term or were suspended. Therefore, Vinastar increases domestic consumption to ensure output. Because Vinastar's products have been exported to Japan and Korea, it is easy to sign supply contracts for FDI enterprises in Vietnam."

 *Meeting the demand quickly

Those enterprises would like to become suppliers for multinational corporations, or FDI enterprises have to overcome obstacles such as: ensuring the prevention of the Covid-19 epidemic, restructuring production by investing in factories, modern machinery and equipment, improving the capacity of workers. Thus, the products made meet both quantity and quality requirements of FDI enterprises.

Mr. Masahiro Ariga, Head of Business Connection Department of the Japan Business Association in Ho Chi Minh City shared: “The Covid 19 epidemic has caused great obstacles for businesses to trade, but the association has acted as a bridge to support many Japanese enterprises to connect with Dong Nai enterprises to supply input products to each other, reducing the imports. Products of Vietnamese enterprises have the qualified quality with competitive prices, and it is easy for those enterprises to sign contracts to become sales partners for Japanese enterprises.

According to representatives of the associations, those would like to become suppliers for FDI enterprises could go through business associations in the province such as: Dong Nai Business Association, Dong Nai Young Entrepreneurs' Organization, Japanese enterprises in Ho Chi Minh City, Korean Business Association in Dong Nai, The Council of Taiwanese Chamber of Commerce (CTCVN) in Dong Nai, and others to seek partners, product demands for the future cooperation.

Mr. Ahn Seong Ho, Commercial Counselor, Consulate General of the Republic of Korea to Ho Chi Minh City said: “The Korean Consulate General in Ho Chi Minh City is willing to support Vietnamese and Korean businesses in the same field to cooperate with each other to expand trade between the two sides. Korean enterprises investing in Vietnam have paid much attention to find partners to supply input products in Vietnam to ensure their production."

In more than a decade, Vietnamese enterprises have never experienced a "turbulent" as serious as today. If they overcome the current challenges, they will have many opportunities to participate deeply in the global supply chain to expand production towards the sustainable development.

​