Electronic support industries to be developed (17/10)
17/10/2012 - 24 Lượt xem
According
to General Secretary of the Vietnam Electronics Enterprises'
Association Tran Quang Hung, there are many causes for the retardation
of the sector including lacks of specific support policy, investment
capital, human resources and advanced technology. In addition, domestic
investors were not interested in the sector for long capital recovery
time and large investment upon startup.
However
in recent years, recognizing the importance of the electronic support
industries, the Vietnamese Government has issued many legal documents
including Prime Ministerial Decision 12/QD-TTg dated February 22, 2011
on support industries development policy, focusing on the fields of
mechanical engineering, electronics, automobiles, garment and textiles,
and footwear.
The
decision was considered in time for the domestic assembly-based
electronics industry will no longer be suitable for the country's
development and integration into the world economy. Since Vietnam
joined the WTO and ASEAN, an imported electronic product has been
liable to tax rates ranging from zero to five percent, while the
imported components to assemble must bear much higher tax rates. Seeing
the paradox, some electronic investors such as Sony and Panasonic have
stopped assembling and switched to distribution of electronic products.
Therefore, the domestic electronic sector will hardly survive
continuing electronic assembly.
Thailand
has been focusing on developing electronic support industries for
years, especially computer components. At present, about 60 percent of
computer components in major brands are imported from Thailand and the
country's export value of computer components has reached US$43 billion
on annual basis. Apart from Thailand, Philippines also focused on
microchips and Malaysia on electronics precision engineering. It can be
said that regional countries have paid special attention to the
development of electronic support industries, aimed at participating in
the global supply chain.
According
to the experts, this is a good time for Vietnam to develop support
industries because in recent years, many Japanese companies have tended
to invest in Vietnam and they are in need of Vietnam's development of
support industries to help with the development of components and spare
parts on site to reduce costs. Vice Chairman of the Japan External
Trade Organization (JETRO) Hiroaki Isobe said that Japanese enterprises
operating in Vietnam must face the difficulties in purchasing spare
parts. A recent JETRO survey shows that the rate of product
localization of Japanese companies operating in Vietnam remains less
than 30 percent, much lower than the nearly 50 percent in China and
Thailand. As a result, Japanese companies in Vietnam must import the
necessary components from Japan or other countries and the Japanese
Government is much interested in the development of support industries
in Vietnam.
According
to Deputy Minister of Industry and Trade Le Duong Quang, to help
Vietnam develop the support industries was one of the contents that the
Japanese Government was committed to within the framework of the
Vietnam - Japan Economic Partnership Agreement (VJEPA) and the
Vietnam-Japan Joint Initiative Phase 4. Recently the organizations of
JETRO and JICA have also increased with Vietnamese businesses to
develop the support industries. Nearly 50 Japanese companies joined the
Metalex 2012 in Ho Chi Minh City (HCMC) to introduce the spare parts
and components that they needed Vietnamese enterprises to provide,
including electronic components.
In
addition, foreign-invested enterprises in Vietnam also expected to have
access to the domestically produced components and equipment to reduce
costs. Viet Nam will also stay more attractive to FDI investors if
having its support industries developed.
However,
to capture the opportunities, domestic electronics companies must
actively change their ways of thinking and acting. According to Tran
Quang Hung, domestic electronics companies should give up thinking that
developing electronic support industries could be as simple as assembly
because this development will require them to find out their own way on
a certain range of products so as to be able to participate in the
global supply chain and stay competitive in the global market. Domestic
businesses should take advantage of immediate support from Japanese
organizations in Vietnam to meet the orders of Japanese companies. The
Metalex 2012 showed that Japanese companies needed to buy products that
domestic enterprises do not have, or did not meet the
technical requirements.
The
investment in electronics support industries should not be made in
width but in depth, focusing on one or two key products meeting the
requirements of buyers. For example, in Japan, a single dozen-member
household producing only one type of plug could earn annual export
revenue of US$25 million. Moreover, delivery and quality should be kept
consistent for always. Online Trade and Investment Information Portal
Vice Director Pho Nam Phuong said that support industries should be
developed on the basis of advanced technology, improved production
processes, enhanced training and management, and skilled workers.
Once
Vietnamese support industries have been developed to provide necessary
products for the FDI enterprises in the country, Vietnam can join the
global supply chain. According to Tran Quang Hung, electronic sectors
worldwide are continually growing to provide consumers new products, so
manufacturers always need new advanced components and spare parts.
Today, global electronic groups are focusing mainly on the designing of
their products and only producing high-technical equipment and
components, while seeking for outsourcing production of other common
spare parts and technical equipment to reduce costs, which may provide
a good opportunity for support industries to develop./.
Source: VEN
Source: VEN
