Enterprises face challenges to join international supply chains

​The opportunity for Vietnamese enterprises to join the global supply chain and supply goods to domestic and foreign partners is huge when the socio-economic stability in Vietnam is always maintained. The opportunity is great, but businesses still face barriers.

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Supporting industries have the opportunity to join the global supply chain but still face many barriers

Small scale, lack of capital, human and technical resources, as well as dependence on imported raw materials and production materials... are the factors that hinder enterprises.

Depends on imported raw materials

 Currently, Vietnam imports most of the raw materials and input materials for key export industries such as textiles, footwear, electronics, wood, etc., so it is greatly influenced by world markets. With the wood industry, the biggest limitation at present is that the development is fast but not sustainable because there is no national brand and international-class enterprises; competitiveness is still low, corporate governance capacity is not high.

As a developed locality in wood production and export, according to the 2021 statistics of the Department of Agriculture and Rural Development, the province has nearly 1.5 thousand establishments operating in wood production, trading and processing. In which, more than 900 establishments are enterprises and 500 household-scale production establishments. Currently, there are only more than 100 enterprises with factories located in industrial zones and clusters, but most of them have foreign direct investment capital. The rest are small-scale Vietnamese enterprises and establishments, mainly doing outsourcing for export partners, many factors to ensure large production are not available.

Similarly, the mechanical and manufacturing industries also have the greatest potential in providing products for the link chain. Mr. Le Xuan Thoi, Director of Astek Co., Ltd. (Bien Hoa City), specializing in the fields of mechanics, manufacturing and automation, said that the biggest weakness of Vietnamese enterprises in the province is that most are in small and medium scale. In the field of supporting industries, enterprises depend a lot on input production factors and must import. The difficulties during the time when China tightened the prevention and control of the Covid-19 epidemic showed that. To limit dependence, it is necessary to develop sustainably, that is, to be self-sufficient in production.

This is also something that other industries such as food production, food, apparel, leather shoes are facing... Recently, many enterprises have tried to find domestic supply, but it has not been really effective.

 Internal force is not strong

 According to the assessment of the Ministry of Industry and Trade, the ability to participate in regional and global value chains of Vietnamese industrial products is still very limited, mainly involved in processing and assembly with low added value. Deputy Director of the Department of Industry (Ministry of Industry and Trade) Pham Tuan Anh said that besides weak internal resources, the human resources of enterprises have not met the current needs. In the long run, the development becomes unbalanced when it depends too much on the FDI sector. To develop, it is necessary to build internal resources and autonomy of domestic enterprises.

In the same opinion, according to Vice Chairman of Dong Nai Enterprises Association Chau Minh Nguyen, one of the biggest limitations of small and medium-sized enterprises in Dong Nai today is that they do not have a long-term vision and have to follow the immediate market. Besides, production and manufacturing capacity is still limited, small-scale production, difficult to participate deeply in the supply chain. There are units that are highly evaluated when appraised, but due to the lack of a supply ecosystem, they only export a few small containers, which are not sustainable and highly stable.

 On the side of enterprises, there are many policies to develop supporting industries, but they have not benefited much. Even the information about the policy of many units is still unclear. Currently, in the field of supporting industries, Dong Nai has only a few small units that can directly participate in the global supply chain implemented by the Industry and Trade sector.

 The owner of a business in Bien Hoa said that the desire of enterprises is that the ​State create an open mechanism, better act as a bridge so that Vietnamese enterprises can interact, understand their needs and cooperate with international partners and units. Another problem must be better support in terms of production space, it is impossible to make a big deal without the scale of production to meet customer needs. For many years, he has been trying to find a suitable production site but still cannot. Meanwhile, renting large areas of land in industrial parks with high rents and large areas is very difficult for start-ups.