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Vietnamese firms raise capacity to brace for orders due to supply chain shifts



Many Vietnamese enterprises, including Truong Hai Auto Corporation (THACO) and Duy Khanh Engineering Co. Ltd., have sought ways to improve their manufacturing capacity so that they can fulfill orders ushered in by the global supply chain shifts, these firms’ leaders said at a seminar held in Binh Duong Province on Thursday last week.

“Many partners and customers have immediately rushed to our factories after they arrive in Vietnam to see our production capacity,” said Do Minh Tam, general director of Truong Hai Supporting Industries and Mechanics Limited Liability Company (THACO Industries), an arm of THACO.

“We are expanding many factories to increase the capacity to grasp opportunities coming from the shift of supply chains from other countries to Vietnam.”

Tam was addressing the ‘The shift of supply chains – opportunities for Vietnamese enterprises’ seminar jointly held by Tuoi Tre (Youth) newspaper, the Industry Agency under the Ministry of Industry and Trade, and the Binh Duong People’s Committee.

He added that THACO Industries plans to enhance its investment in the southern key economic zone through various affiliate investment models.

This is an indispensable move when the firm has penetrated deeply into global supply chains. 

THACO has taken the initiative in production and outsourcing to its partners who can help the group fulfill orders meeting standards in quality and progress. 

“During the COVID-19 pandemic, which disrupted supply chains and caused a stagnancy of orders, the combination helped us satisfy the surging demand and remove the production pressure. Above all, this is an inevitable step to expand production,” Tam said.

According to the Vietnamese manufacturer, the supply chain shifts show that no manufacturers can produce all parts and accessories of a product themselves. This is also a challenge of large-scale industrial producers.

The outsourcing to other firms will go hand in hand with the technical and capital support and even the technology transfer, thus helping smaller enterprises get involved in global supply chains.

The sharing of orders and experience in governance also helps THACO’s business partners become more mature and standardize their product quality.

Meanwhile, Do Phuoc Tong, chairman of Duy Khanh Engineering Co. Ltd. and chairman of the Ho Chi Minh City Association of Mechanical and Electrical Enterprises, said global supply chains are being shifted strongly.

So as to brace for this trend, enterprises must make investments to refresh themselves and improve their competitiveness.

A view of the seminar held on Thursday last week. Many enterprises have taken the initiative in bracing for the supply chain shifts. Photo: Huu Hanh / Tuoi Tre

A view of the seminar held on September 15, 2022. Many enterprises have taken the initiative in bracing for the supply chain shifts. Photo: Huu Hanh / Tuoi Tre

As for Duy Khanh Company, Tong has seen opportunities in the mechanical engineering sector since 2016, so he has invested in a new factory at the Saigon Hi-Tech Park in Ho Chi Minh City.

At the end of this year, the factory is expected to be put into operation and participate in global supply chains with multiple products ordered by its partners.

“With more support policies to pave the way for local manufacturers to foray into the mechanical engineering sector, enterprises will have more opportunities to become part of global supply chains,” Tong noted.

According to Bui Ta Hoang Vu, director of the Ho Chi Minh City Department of Industry and Trade, from the connectivity of local and foreign supporting industry and manufacturing enterprises, the department realized that foreign direct investment (FDI) firms and industrial producers tend to increase their localization rates and most of them have their own localization strategies.

They always want to purchase domestic products due to more efficient logistics services, specifically a short distance from suppliers, a smaller inventory volume, faster delivery, easy control of suppliers, and competitive prices.

“If Vietnam promotes and optimizes these advantages, enterprises will have ample opportunities to participate in regional and global supply chains, and attract large hi-tech groups with a demand of shifting their production and supply chains,” Vu affirmed.

Binh Duong to back enterprises’ industrial development

Lai Xuan Dat, deputy director of the Binh Duong Department of Planning and Investment, said that he shared enterprises’ concerns over their inferiority to foreign firms amid the supply chain shifts. 

Upon their investment in Vietnam, foreign investors often bring their ecosystem to the country. Therefore, it is a hard job for policymakers to concurrently attract foreign investment and encourage the development of local enterprises.

Binh Duong will provide the maximum support for the business community, including more than 4,000 FDI enterprises and nearly 60,000 local companies, Dat said. 

Regarding the investment attraction, the provincial official said after 30 years of developing industry, Binh Duong will make adjustments and invest in the ‘smart city’ project to increase labor productivity and attract hi-tech investment projects.


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Retailers improve quality to gain competitive advantage



The presence of foreign-invested enterprises in Vietnam’s retail sector has increased competition among businesses, jointly regulating supply and demand in the domestic market.

According to trade experts, not only Thailand but also many other foreign retail businesses and domestic ones have expanded their business in the Vietnamese market.

As a result, the competitiveness of Vietnam’s retail market and local businesses has improved.

Over the years, Vietnam has issued a fairly comprehensive system of policies on attracting and managing foreign investment capital as well as developing orientations for the domestic retail market.

To create favourable conditions for retail businesses, experts said that besides attracting foreign investment, it is also important to build Vietnamese retail channels by Vietnamese people.

Vietnamese retail businesses should both compete and cooperate with foreign entities to learn experience and advanced retail technology. It is necessary to promote the link between domestic production and distribution system, and create a strong association to Vietnamese enterprises./.


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Owners of condotels, officetels get title deeds



Buyers of condotels, officetels and resort villas can have ownership certificates from May 20 under a new decree guiding the implementation of the Land Law.

On April 3, 2023, the Government issued Decree No.10 on amending and supplementing several decrees guiding the implementation of the Land Law from May 20.

The ownership term of the condotel depends on the purpose of land use following current regulations but not exceeding 50 years of the ownership term for land allocated or leased by the State for commercial or service use.

Buyers may only own land and apartments during the remaining land use period, not for long-term use as residential land.

According to experts, the Government’s decree will remove legal bottlenecks for investors and buyers of condotels, officetels and resort villas.

Experts said that if legal problems in the condotel, officetels and resort villa market are resolved, it can restore nearly 239 frozen projects nationwide, with a total value of about 30 billion USD./.


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Vietnam invests over 316 million USD abroad in five months



Vietnam invested nearly 316.4 million USD abroad in the first five months of this year, equivalent to 93.5% of the figure recorded in the same period last year, according to the Foreign Investment Agency under the Ministry of Planning and Investment.

Vietnam invests over 316 million USD abroad in five months hinh anh 1Illustrative image (Source: VNA)

Hanoi – Vietnam invested nearly 316.4 million USD abroad in the first five months of this year, equivalent to 93.5% of the figure recorded in the same period last year, according to the Foreign Investment Agency under the Ministry of Planning and Investment.

Of the total, 142.7 million USD was poured into 47 new projects, or 48.6% of the figure in the same period in 2022 while 173.7 million was added to 16 underway ones, a year-on-year increase of 3.9 times.

Vietnamese investors abroad invested in 13 sectors, especially retail and wholesale, information and communications, finance, banking, agro-forestry-fisheries.

In the January-May period, Vietnamese investments landed in 20 countries and territories, led by Canada with one new and one expanded project worth over 150.2 million USD. It was followed by Singapore, Laos, and Cuba.

The agency said that as of May 20, Vietnam had operated 1,648 valid projects abroad with combined investment of nearly 22.1 billion USD, including 141 by State-owned enterprises worth 11.67 billion USD, accounting for 52.8% of the country’s total.

Vietnamese investment abroad is mostly in mining (31.5%) and agro-forestry-fisheries (15.6%).

Leading destinations for Vietnamese investors are Laos (24.4%), Cambodia (13.3%), and Venezuela (8.3%)./.


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