Foreign direct investment enterprises look for the domestic materials

The production of mechanical parts for export at Boss Industrial Co., Ltd (Song May Industrial Zone, Trang Bom District)

Dong Nai is one of Vietnam's leading centers for supporting industrial production. The products have been mainly exported to many countries around the world, the proportion of domestic consumption has been very limited. If the supply-demand connection is good, the consumption market of the FDI and Vietnamese enterprises will be expanded and the deficit will be reduced.

The domestic raw materials are in high demand.

In the context of the time for shipping the cargo in world has been doubled, and the shipping costs has been 3-4 times higher, the traveling between countries to check the goods before deciding to purchase, finding out the domestic materials suppliers has been the expectation of many enterprises.

Mr. Vu Duc Giang, Chairman of Vietnam Textile and Apparel Association said: "About 4-5 years ago, Vietnam's textile and garment industry had to import 80% of raw materials, but now it is only 50% in which there have been orders which the domestic raw materials accounting for over 90%. The textile and garment enterprises are very eager to find domestic sources of textile materials and accessories to reduce imports. Therefore, enterprises supporting the textile and garment industry having products with high quality and competitive prices are easy to expand the domestic consumption market. The Vietnam Textile and Apparel Association has a development plan for the next 5-10 years, aiming to reduce the imports of the raw materials and increase the exports. The above goal will open the door for enterprises supporting the textile and garment industry to develop and expand their domestic market share.

Many other manufacturers of computers, electronic components; machinery, equipment and spare parts; means of transport and spare parts; footwear; textile fibers; Iron and steel products, etc. have tended to buy the domestic materials.

Mr. Tetsuji Kobayashi, General Director of Kobe EN&M Vietnam Co., Ltd located in Bien Hoa 2 Industrial Zone, Bien Hoa City shared: “Because our company specializes in the production of metal components, it regularly imports large quantity of iron and steel from many countries. The company has tried to find the domestic raw materials to reduce the imports. If enterprises in Dong Nai and other provinces and cities meet the quality requirements of raw materials, our company will be ready to purchase.

Connection needed

In recent years, the domestic supply of raw materials for many industries has continuously increased, but it has not yet met the demand. In which, there have been many supporting industry enterprises focusing on export and paying less attention to the domestic market. Therefore, for the same product, this enterprise can export while another one has to import.

Ms. Quan Ngoc Lien, Director of Hoan My Co., Ltd located in Vinh Cuu District said: “Hoan My specializes in manufacturing buttons sold to the famous brands in Europe and Korea. Many enterprises in the textile and garment industry in Vietnam have even imported these kinds of buttons from the above brands for their production in the country. As a result, the above buttons have traveled in the world and then returned to Vietnam making the price to be many times higher than the originals produced by Hoan My in Vietnam"

In reality, many other products have had the same experience, for example, in the first 10 months of 2021, businesses in the province had to spend nearly US$1.5 billion to import the material of plastic, while in Dong Nai there have been many businesses manufacturing and exporting plastics with a turnover of US$385 million. If the above material buyers and sellers can directly have business with each other, it will be more profitable for both parties.

According to Mr. Masahiro Ariga, Head of Business Connection Department of the Japanese Business Association in Ho Chi Minh City, every year the association coordinates with Dong Nai and other provinces and cities to organize the conferences on linking supply and demand between Japanese enterprises and Vietnamese ones in order to have the mutual product supply. On those occasions, a number of businesses already signed the business contracts.

Dong Nai currently has 42 countries and territories investing in with more than 1.7 thousand projects in many different industries, of which the supporting industry sector accounts for more than 60% of the total export turnover. Many products of the supporting industry have entered the most demanding markets such as Japan, the United States, Europe, and South Korea.

Therefore, products with the sufficient quality and quantity can supply to FDI enterprises and domestic invested enterprises in Vietnam. The remaining problem is the connection for buyers and sellers. Enterprises can take the initiative through associations as a bridge to meet with each other.

Vi Quan