Strengthening Quality, Expanding Export Opportunities for Industrial Products

Businesses have received IATF 16949 certification

“Industrial support businesses in Hanoi have received certification from the IATF 16949 Quality Management System (international standard for quality management in the automotive industry ), thus qualifying to participate in the production chain of multinational corporations,” Mr. Nguyen Hoang, Chairman of the Hanoi Support Industry Business Association (Hansiba), shared positive signals from the support industry businesses in Hanoi at the expanded Q1/2024 executive committee meeting of Hansiba on March 14.

According to Mr. Nguyen Hoang, in the past, industry businesses had to rely on Japanese and Korean partners, especially members of the Kobe Aero Network (KAN) (Japan) aerospace industry group, to be certified to produce and supply to the global chain. Therefore, the fact that some industry businesses have been granted this certification is an extremely important signal, and it is believed that in the future, there will be more support industry businesses in Hanoi, as well as throughout the country, receiving this certification.

Another piece of good news shared by Mr. Nguyen Hoang is that from now until September 2024, several factories will be continuously inaugurated in the Nam Hanoi Support Industrial Park (Hanssip) by domestic and foreign investors. After being put into operation, the products manufactured here will reach millions of USD annually, all high-tech products, bringing high added value as well as many export opportunities.

However, the picture of the Hanoi support industry still faces many difficulties and challenges. Specifically, support industry businesses have not fully realized the huge potential and market share of the support industry. Meanwhile, difficulties also arise from the small and medium scale of enterprises, which leads to a lack of financial capacity as well as equipment and infrastructure.

Although the directions and visions in the macro policies of the State are correct, the issuance of policy mechanisms to put these directions into business practice is not timely. In particular, the state policy enforcement agencies are still confused when it comes to providing guidance and support, such as the complex certification regulations for support industry businesses. Until now, very few support industry businesses have been certified to enjoy incentives under Government Decree 111/NĐ-CP on the development of support industries.

Continuing to enhance the ‘quality’

In 2024, it is predicted that businesses in the overall industry, especially the support industry, will still face many difficulties that impact labor, finance, and supply chains, and only those businesses that understand what they need to do, what support they need, and how to cooperate with partners to participate in the production chain and capture the local and global markets.

To support and accompany support industry businesses, Mr. Nguyen Hoang stated that Hansiba will continue to enhance the ‘quality’ of its Member businesses in order to directly produce and supply support industry and high-tech products to multinational corporations operating in Vietnam, and to integrate into the ASEAN and global support industrial production chains. Specifically, the focus will be on mechanical engineering for the automotive, electronics, defense industry, civil industry, etc.

Additionally, there will be input-output connections and preferential financial loans from the government, from the Development Bank of Vietnam, support for high-skilled labor training, import-export of used machinery, and production quality delegation.

Continuing to accompany the development of the Hanssip industrial park through all stages to effectively support domestic Member businesses and FDI businesses with land and factories to invest in production.

To create an environment and ‘supports’ for support industry businesses to participate in the regional and global playground, the businesses also recommend that the Government promptly establish a Support Industry Law and submit it to the National Assembly as soon as possible. While waiting for the Law to be enacted, it is proposed that the Government promptly study and issue a Resolution on pilot mechanisms for Vietnam’s support industry businesses.

Additionally, specific plans and roadmaps need to be developed to develop support industry businesses by aiming to achieve a proportion of 5-10% of total businesses in Vietnam by 2025 and have a vision to 2030.

It is necessary to direct the development of specific plans for each economic region (North – Central – South) to develop support industries, avoiding unnecessary duplicate development, thereby maximizing the utilization of the country’s resources and unnecessary competition. It is necessary to clarify which regions produce components for industries such as automobiles, electronics, shipbuilding, agriculture and fisheries, leather shoes, textiles and garments, etc.

Connecting with large international conglomerates present in Vietnam is extremely important to encourage and ‘pair up’ so that these FDI businesses place orders and support Vietnamese businesses in supplying them with components in order to directly enter the global support industry production chain.

Regarding capital, Mr. Nguyen Hoang said that support industry businesses need a long enough period of time to demonstrate their production efficiency. Many foreign investors, when choosing Vietnamese partners, often require a stable production time of 24-36 months before placing orders, so support industry businesses need medium and long-term capital with preferential interest rates.

With the proposals of Hanoi’s support industry businesses, Mr. Nguyen Dinh Thang, Deputy Director of the Hanoi Department of Industry and Trade , emphasized that the city has a clear orientation for the development of support industries, so along with the support, businesses need to actively explore, boldly invest, or participate in Hanoi’s construction investment projects and participate in manufacturing value chains.