Supporting industries needs a push to grow: Insiders

As the development of supporting industries of Vietnam has yet to match their potential, the sector needs a push to clinch a position in the domestic market and rise to the world, according to insiders.

The Ministry of Industry and Trade (MoIT) said that the majority of businesses in the industries are small and medium in size, facing difficulties in market, technology, human resources and capital, while the investment policy for research and development (R&D) in this area has yet to receive due attention, hindering enterprises from expanding their operation to the world market.

Experts held that Vietnamese businesses have fewer advantages than their peers with similar conditions in the region due to policy limitations.

Truong Thi Chi Binh, General Secretary of the Vietnam Association of Supporting Industries (VASI), said over the years, although Vietnam has opened its door for foreign investors in the fields of processing-manufacturing, supporting industries in the country have yet to make much progress.

A representative from the Vietnam Association of Mechanical Industries (VAMI) underlined that domestic firms have failed to make full use of abundant opportunities in mechanics, losing many big projects and bidding packages to their foreign rivals.

The major reason behind the situation is that equipment and machinery manufacturing serving other sectors like chemical, transport, oil and gas and agriculture requires large investment and long capital retrieval period, while firms in supporting industries find it hard to access bank loans.

Cao Thanh Dao, Director of 3A+ Equipment & Technology Services Company, said Vietnam has adopted investment policies for R&D in supporting industries, yet the implementation remains limited.

The MoIT said that currently, 5,000 businesses are operating in supporting industries, and they have enjoyed many incentives, including those in corporate income tax.

The ministry has issued 206 incentive confirmation certificates to businesses with projects producing supporting products.

Alongside, a decree amending the Government’s Decree No.111/2015-ND-CP on boosting the growth of supporting industries is being drafted with many mechanisms and policies to help businesses in the sector enhance their competitiveness, meeting the requirements of multi-national groups and attracting investment.

The ministry revealed that it has proposed a 3% interest rate support for middle- and long-term loans for the firms through commercial banks.

Hailing the policies, Binh held that once approved, they will create a great help for domestic businesses in supporting industries to grow further.

However, insiders underlined the need to make continuous efforts to remove barriers in administrative procedures and business conditions for supporting industries.