Assembling cars at Saigon Transportation Mechanical Corporation (Samco). (Photo: VNA) VCCIhas worked out a plan to develop appropriate policies for supporting industriestowards minimising reliance on imports of raw materials as well as reducingprolonged, simple and low-value-added processes, like packaging,production of manuals, and plastic components.
Thiswill enable Vietnam to not only create more value and put thecountry in a better position in the global supply chain, butwill create more opportunities for Vietnam in terms of freetrade agreements (FTAs).
Accordingto VCCI, high dependence on imports for supporting industries will leadto higher risks and increase the costs for enterprises.
DauAnh Tuan, Director of VCCI’s Legal Department, said Vietnam's COVID-19 responsecould make it an attractive investment destination as economies seek to maketheir supply chains less dependent on China.
Foreigninvestors were considering shifting investments to Vietnam due to their trustin Vietnam's safety amid the pandemic. With a number of new generation FTAs, Vietnamwould have more opportunities if the Government could offer betterpolicies and clear targets to encourage and create favourable conditions forVietnamese businesses and attract foreign investment into prioritisedmanufacturing sectors.
DeputyMinister of Industry and Trade Do Thang Hai said that from March, the ministrywas asking businesses to promote production and boost the construction oflarge-scale energy and industrial projects to ensure sufficient electricitysupply, contributing to the country’s economic growth.
Theministry also planned to conduct appropriate solutions andgenerate incentives for businesses relating to raw materials, productionplans, processing, markets and distributions as well, he said.
Economic recovery
Vietnam’sindustrial sector still grew 6.5 percent year-on-year in the first threemonths of 2021, with the manufacturing and processing sector expanding 9.45 percentand remaining the main engine of economic growth.
Despitethe effects of COVID-19, local manufacturers have sought new ways to dobusiness. In the first quarter of this year, textile, garment and footwearmanufacturers showed more positive signals compared to the sameperiod last year.
LeTien Truong, CEO of Vietnam Textile and Garment Group (Vinatex), said whilemany firms involved in industrial production were concerned about the lackof orders due to the influence of the COVID-19 pandemic, textile and garmentbusinesses were enjoying a surge in orders.
Hesaid that at present, Vietnamese textile and apparel enterprises, includingthose of the group, had orders until the end of April 2021.
Notably,items such as knitwear and popular goods have orders until July and August of2021.
"Itis a good signal for the recovery process of Vietnam's garment and textilesector, especially when Vietnam is in a good position in the global supplychain after the COVID-19 crisis," said Truong.
Manymanufacturing industries have experienced difficulties and challenges overthe last year.
Accordingto the Vietnam Steel Association, from the beginning of this year, Vietnam’ssteel market has seen a low sales volume with stagnant production due todecreasing demand from construction businesses.
NguyenChi Sang, General Secretary of the Vietnam Association ofMechanical Industry (VAMI), said the biggest problem for enterpriseswas a lack of orders. /.
VNA`
