The shifting trend of supply chain

Industrial production of mechanical engineering support at an enterprise in Bien Hoa City seeking to participate in the world supply chain

However, in order to seize the opportunity, there are still many barriers to overcome, which require appropriate policies from state management agencies and the self-effort of enterprises.

Enterprises move the supply chain

In the post-Covid-19 era, the trend of shifting supply chains is getting stronger and stronger, especially in a vibrant developing region like Asia-Pacific and Vietnam is one of the most valued destinations.

For example, up to now, Apple Technology Group has moved 11 factories in the supply chain from Taiwanese enterprises to Vietnam. LEGO Group (Denmark) built a new factory in Binh Duong with an investment project of more than USD 1 billion. Or as the multinational Techtronic Industries (TTI), specializing in electrical and household appliances, with 12 factories globally, 76% of products supplied to the US and Nordic markets are also deploying USD 650 million investment project in Sai Gon Hi-Tech Park. Similarly, many other corporations such as Foxconn, Luxshare, Pegatron, Wistron also expand their available scale in Vietnam.

Jetro's 2021 survey shows that 55.3% of Japanese enterprises in Vietnam want to expand their business scale, the highest rate in ASEAN. That shows the attractiveness of the Vietnamese market, especially after the epidemic subsided, Vietnam has been and is being highly appreciated by international organizations for its development potential and stability.

Korea is currently the largest foreign investor in Dong Nai and the Southeast region. Korea is investing in Dong Nai with 426 projects and registered capital of over USD 7 billion. Majority of Korean enterprises invest in projects in the field of supporting industries in industrial parks to produce electronic components, machinery equipment, raw materials for the textile, footwear, and fiber industries.

According to Mr. Phil Kym Choi, small and medium-sized enterprise management expert, director of Korean enterprises in Vietnam, Southeast Asian countries in general, including Vietnam, are focused on placing enterprises' factories in the process of shifting production and global supply chains. Behind the shift of production and global supply chains are a series of opportunities that need to be assessed for local governments and the business community to seize and develop new policies; redirect investment, restructure strategy and apparatus.
Proactively participate

The production relocation of large enterprises and corporations into our country has created opportunities for domestic enterprises to participate in the global supply chain. The opportunity to catch the wave is great, but according to businesses, there is still much work to be done. In fact, most industrial enterprises in Vietnam are still small, unable to participate deeply in the value chain, and have broken supply chains due to dependence on the volatile world market.

Vietnam currently has about 2,000 enterprises producing spare parts and components, of which only about 300 are involved in the supply chain. In Dong Nai, one of the units that has initially joined the supply chain is Future Company Limited (Long Thanh district), specializing in manufacturing supporting industrial products from plastic for many automobile enterprises. motorcycles, electronics, refrigeration...

Mr. Truong Quoc Cuong, director of the company, said that to be like the present is a long preparation process. Although compared to many units, the size of enterprises is still small and medium. In order to grow up, participating in the supply chain must innovate, improve productivity, technology, train human resources and actively seek partners... In that process, businesses really need support from the State.

 With Dong Nai, in order to welcome the investment wave, the province has made efforts to improve its investment environment and competitiveness. One of the solutions being accelerated is to continue to open more industrial parks, create a land fund for investors, attract capital, high technology, and have demand for domestic auxiliary goods. Besides, with the development of infrastructure, especially the attraction of Long Thanh International Airport, more and more large economic groups come to explore local business opportunities.