Vietnam wants to join global supply chains

The Vietnam Chamber of Commerce and Industry’s (VCCI) chair Vu Tien Loc on July 3 stirred up the business community when he said  that Samsung plans to bring 200 foreign suppliers to Vietnam which will be vendors for Samsung.

Loc said he heard the news at a trade promotion conference in Thai Nguyen province some days before.

“I wish the 200 vendors were Vietnamese enterprises,” he said.

One day later, Samsung Vietnam representative said any enterprise, Vietnamese or foreign, has to take the initiative to prove their capability to join Samsung’s global chain.

He denied that Samsung ‘invited’ the enterprises to join the chains, affirming that the enterprises came to Vietnam on their own.

Samsung’s official website shows there are 2,500 vendors that provide components to Samsung all over the world. 

In Vietnam, Samsung has 200 first-class vendors, but only 29 Vietnamese enterprises have got the nod from the South Korean conglomerate to join its production chain. This means that only 15 percent of vendors are Vietnamese.

Samsung affirms that the number of vendors would increase to 50 by 2020, showing  action plans to support domestic enterprises, including training and consultancy programs.

However, analysts said that Samsung had more than two decades to take action, but the results are still far from Vietnamese expectations.

Twenty-two years have elapsed since Vietnam received investment from Samsung and 30 years since Vietnam began attracting FDI. 

By June 2018, Vietnam had attracted nearly 26,000 foreign invested projects worth $326 billion, of which 84 percent are wholly foreign owned.

However, most foreign invested projects just do assembling and outsourcing with low volume of locally made content. 

Experts attending the conference recently expressed their disappointment about technology transfer between Vietnamese and foreign investors. Though Vietnam offers a lot of incentives, foreign investors still do not transfer technology to Vietnamese partners. 

The problem is that it is not a requirement stipulated in Vietnamese laws.

Experts said that industries will not be able to develop if they rely on assembling and technologies from foreign enterprises, while Vietnamese do not have opportunities to join supply chains. To grow, they need to become active.

That is why Vingroup is moving ahead with Vinfast, fulfilling the ‘made-in-Vietnam car dream’. The manufacturer strives to have 60 percent of car components and 100 percent of electric motorbikes made domestically. 

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Kim Chi