In the realm of global industries, Vietnam is emerging as a formidable manufacturing force, as affirmed by the Ministry of Industry and Trade. According to the International Monetary Fund (IMF), projections indicate that by 2025, Vietnam is set to surpass both the Philippines and Singapore, securing the third position in Southeast Asia with a GDP exceeding USD 571 billion.
The Surge in Investment Flows into Manufacturing
Vietnam is undeniably becoming the world’s ascending workshop. Government Resolution 115/NQ-CP dated July 28, 2023, outlining measures to promote industrial development, comes with a set of new policies expected to provide a robust stimulus for the manufacturing sector in the foreseeable future.
Shifting Supply Chains: Opportunities for Vietnamese Businesses
Speaking at the Symposium on “Sustainable Supply Chains: New Approaches for Businesses” held on November 16, within the framework of the Vietnam International Support Industry and Processing Manufacturing Exhibition 2023 (VIMEXPO 2023), Mr. Pham Thanh Tung from the Ministry of Industry and Trade noted a recent trend of foreign investors redirecting their focus to Vietnam.
“In the first 10 months of 2023, the total newly registered capital, adjusted capital, and capital contribution to buy shares and contribute capital of foreign investors reached over USD 25 billion, a 14.7% increase compared to the same period last year. Notably, more than 73% of this capital flowed into the manufacturing sector, marking a 45% increase from the previous year. New investment projects are concentrated in industrial hubs such as Quang Ninh and Hai Phong, aiming to integrate into global supply chains. Vietnam has truly become a favored destination for foreign investors, paving the way for active participation in global supply chains on home turf,” Mr. Pham Thanh Tung observed.
Delving deeper, Mr. Pham Tuan Anh, Deputy Head of the Industrial Department, suggested that, historically, countries like Japan and South Korea have had leading economic entities guiding the development of other businesses. To further this model in Vietnam, the Ministry of Industry and Trade proposed policies to support the establishment of large-scale manufacturing corporations.
However, these policies are not spread thin but are concentrated on foundational and priority industrial sectors. This is a significant shift in crafting policies to build an autonomous industrial base, making Vietnam a new global manufacturing hub and an attractive investment destination for major world corporations.
Proactive Measures for Businesses
Mr. Pham Tuan Anh believes that, with the unanimous determination of the government, organizations, associations, and businesses, the competitive capacity of Vietnamese enterprises will witness robust development. Vietnam is gradually increasing its ability to participate in global value chains, propelling the supporting industry and the manufacturing sector to remarkable heights.
Vietnamese industrial enterprises need to proactively enhance management capabilities, technical expertise, and restructure production based on digital transformation. Only through such measures can they meet the stringent requirements of multinational corporations looking to deeply engage in global supply chains.
During the symposium, speakers shared insights and discussions on sustainable supply chains. A representative from Toyota Vietnam presented efforts to develop sustainable supply chains. Besides evaluating and commenting on the Vietnamese automobile industry market, Mr. Nguyen Trung Hieu, Deputy Director of the Business Planning Division at Toyota Vietnam, also shared Toyota Vietnam’s activities in developing the supporting industry. He contributed to environmental protection and dialogued on policy matters with the government, proposing opinions to develop sustainable supply chains for the supporting industry in Vietnam.
Addressing current trends and requirements for suppliers, Ms. Do Quynh Chi from the Responsible Business Alliance (RBA) stated that EU countries, the United States, and soon Japan and South Korea are scrutinizing human rights responsibilities. Primary companies in the supply chain are now comprehensively mapping out their chains, followed by determining the risk levels at various layers and sections of the chain.
Regarding current sustainable development trends and requirements, she emphasized that with a highly open economy, economic growth relying on exports, Vietnamese industrial enterprises must proactively improve management capabilities, technical expertise, and restructure production based on digital transformation. This is crucial to meeting the strict requirements of multinational corporations in deeply engaging in global supply chains.
In reality, the understanding and information grasp of a significant portion of Vietnamese businesses, mainly small and medium-sized enterprises, about these matters are still limited. Particularly, the concept of responsibility assessment in the supply chain is quite new in Vietnam.
Ms. Tran Thi Hong Lien, Deputy Director of the Labor Usage Office at the Vietnam Chamber of Commerce and Industry (VCCI), stated that gradually implementing these measures will provide businesses with opportunities to attract investors and interested customers. This will enhance their position in the highly competitive market, contributing to sustainable and long-term business development.
Conclusion: A Vibrant Future for Vietnamese Industries
In conclusion, the collective efforts of the government, organizations, associations, and businesses are propelling Vietnam toward becoming a manufacturing giant. As the country incrementally increases its capacity to engage in global value chains, the industrial sector, particularly the supporting industry, is poised for unprecedented growth.
These steps, if executed effectively, will offer businesses opportunities for investment and customer attention, fortifying their position amid intense competition. It is indeed a significant advantage for businesses aiming at sustainable and enduring development.