A report of the Ministry of Industry and Trade (MoIT) shows that the number of enterprises in the supporting industry sector accounts for only about 4.5 per cent of the total number of companies in the manufacturing and processing industry.

Vietnam's supporting industries (SI) are becoming increasingly attracting to foreign direct investment (FDI). However, stronger policies are necessary to enable domestic enterprises to make significant breakthroughs in this sector.

2023 was a tough year for enterprises in supporting industries because of low demand, according to the Vietnam Association of Supporting Industries (VASI) report to the Ministry of Industry and Trade (MOIT).

To deeply participate in the global supply chain, Vietnamese businesses are forced to improve their competitiveness, promote large-scale production and focus more on products with high technology content.

Chair of the Vietnam Association of Supporting Industries Phan Dang Tuat is worried about the wave of Chinese enterprises flocking to Vietnam.

The scale and capacity of Vietnamese supporting industry enterprises are still limited.

There remains ample room for Vietnamese and Japanese enterprises to foster cooperation in supporting industries that are increasingly developing and playing an important role in Vietnam's participation in the global supply chain.

The proposed support policies, including an interest rate subsidy of 3 per cent, are expected to create a stimulus to part-supplying enterprises to improve their competitiveness and participate in supply chains of multinational corporations (MNCs).

Firms in supporting industries in Vietnam are in desperate need of high-qualified and skilled workers in addition to solutions regarding capital and raw materials.

Small- and medium-sized enterprises (SMEs) in supporting industries can benefit from multinational groups’ China plus-one strategies that include Vietnam, wrote Filippo Bortoletti, Country Director of the Dezan Shira & Associates Vietnam.

The supporting industries are having fresh opportunities amid the inflow of foreign capital and orders into Vietnam. However, local enterprises have to overcome multiple challenges to be able to take advantage of such opportunities.