Many Japanese manufacturers at the supporting industries exhibition in the city complained that they could not find local suppliers, which explains why the local supporting industries are still underdeveloped.
Vietnamese firms’ capability of supplying products for supporting industries is now limited to simple products, according to Japanese producers at the exhibition that wrapped up last week in Hochiminh City.
As a firm specializing in producing printers for export, Canon regularly attends exhibitions on supporting industries to seek components suppliers for its two plants in Bắc Ninh Province and one in Hà Nội City, aiming to increase the local contents of its products manufactured in Việt Nam.
According to Okada Kinya from Canon Việt Nam, the firm can find some local component suppliers every year to increase the localization rate of printers and lower the product price.
However, most of high-tech components are supplied by foreign-invested enterprises in Việt Nam.
Meanwhile, Vietnamese enterprises only produce simple products such as paper boxes, plastic bags or products of low technology.
After over ten years doing business in Việt Nam, Canon has so far increased the localization rate to 70%, with around 60% of components supplied by foreign-invested enterprises.
Similarly, Toyota Việt Nam has also joined the above annual exhibition for several years to find simple auto components such as plastic and rubber products also to increase the localization rate and lower the price.
With such exhibitions, Toyota Việt Nam can normally build a database of potential suppliers.
However, after close inspection and evaluation, there are very few suppliers meeting Toyota’s safety, environment and quality requirements.
Besides, Toyota Việt Nam’s suppliers are mainly foreign-invested firms, with only one Vietnamese firm.
Some other Japanese producers such as Suzuki, Brother and Nidec said that the quality of products supplied by Vietnamese firms was not high.
The weakness of Vietnamese suppliers, according to Japanese firms, is that they are unfamiliar with the harsh competitive environment, which has hindered the development of Việt Nam’s supporting industries.
According to a survey among 4,000 Japanese enterprises in Asia and Oceania conducted by the Japan External Trade Organization (JETRO) last year, the local contents ratio of Japanese products in Việt Nam was only 28.7% compared to 60% in China, 53% in Thailand, 41% in Indonesia and India, and some 40% in Bangladesh and Malaysia.
This year’s exhibition on supporting industries attracted over 100 local suppliers and Japan manufacturing firms in the auto, motorcycle and electronic fields.
Among these, there were up to 53 Japanese producers wanting to find Vietnamese suppliers.
Sotaro Nishikawa from JETRO said that the expo aimed to help Vietnamese firms expand transactions and boost sales of products to Japanese customers right in the local market.
“With the expo, we also open opportunities to help Japanese producers lower the production cost and operate smoothly in Việt Nam,” he said.
Source: The Saigon Times