Group 1: competitive industries

This group would consist of the industries that meet the criteria on production capability, competitive price, quality and market, while making use of Vietnam’s comparative advantages (labour and resources) Government analysts expect these industries to develop in the context of global economic integration.

Agricultural products and seafood processing, apparel, leather shoes, electronics assembling and shipbuilding industries can meet these requirements and can use Vietnam’s natural resources (seafood processing), to generate jobs and attract capital from various sources, and to serve the strategy on an export-oriented economy.

In the next five years, these industries should focus on raising added value of the products and gradually reducing outsourcing, analysts have said

As for the shipbuilding industry, Vietnam should concentrate on increasing locally made products and in the near future, a plate steel plant for shipbuilding will be set up so that, by 2010, the localisation rate would increase from the current 30% to 60%.

By 2010, the textile and garment industry as well aims for $US9-10bil in turnover, while the shoes industry is striving to reap $6.2bil. Vietnam should also focus on electronic products and software with expected total turnover of $3.5bil in 2010.

Group 2: production materials

This group, analysts say, would play an important role in the economy, serving as the basis for industry. It comprises power, oil, coal, basic chemicals, ore mining and mechanics.

By 2010, the power output would have to reach a growth rate of 15-17% per year, reaching 106-118bil kwh. The petroleum industry should also strive to meet 30-35% of local demand and 20-30% of the demand for plastics. By 2010, Vietnam is expected to exploit 19-20mil tonnes of crude oil, 11bil cu.m of gas and 40mil tonnes of coal.

The steel industry is also targeting 6.3-6.5mil tonnes in output by 2010, while fertiliser output by that time must gain a 14% per year growth rate. Ore mining will focus on bauxite and aluminium production in Lam Dong Province as well.

Group 3: potential industries

These would consist of areas with low competitiveness but high potential, and would require new technologies, creating such products with high added value as electronics parts, software, petrochemicals and manufacturing mechanics.

They would also require foreign investment in the main and supporting industries. Software products alone may reach $300 to $400mil.

Tran Thuy

Source: Vietnamnet, 16/01/2006