Networking of Vietnam manufacturing industry 2020: A great opportunity

56 Vietnamese suppliers (suppliers) and 15 manufacturing and assembling enterprises (buyers) were present in Hanoi the event of connecting Vietnam manufacturing industry 2020, introduced their potential capacity and looking for partners and relationships.

The two-day event 23-24.7 took place in Hanoi, an event connecting Vietnam manufacturing industry 2020 organized by Vietnam Association of Supporting Industries - VASI, with the support of Project, which promotes reform and improve the connectivity of small and medium-sized businesses (LinkSME) funded by USAID.

Hundreds of companies' products have been introduced.

On July 24, businesses visited Export Mechanical Tools Jsc. (EMC) (formerly known as Tool Factory No. 1, established in the 1960s) and An Phu Viet, a company specializing in molding and plastic in Hanoi and Hung Yen province.

EMC currently produces hand tools for American-owned company chains, BBQ products for American and German companies, for GE (wind power),  various parts for Honda motorcycles and prepares to manufactures products for Honda Motor (Model-Honda City).
An Phu Viet is producing all kinds of phone covers, circuit racks for Samsung and Nokia, accessories for canon printers  and is recently a supplier for Vinfast electric scooters. Especially on the occasion of Covid-19, An Phu successfully participated in making molds for some parts of ventilators manufactured by Vinfast.

As a result, An Phu Viet was quite busy during Covid-19 (while many companies were closed) and minimized the impact of the Covid-19 epidemic on its operations.

According to many experts, Vietnamese companies have overinvested (too much) on basic production machinery items, currently enough to produce many components for different industries but lacking promotion strategies, coordinating in finding customers.
In other words, machines are more than enough, but there is a lack of output strategies, common development directions, clear technological and financial foundations.

Many companies have invested in long-term production lines and are heavily dependent on the orders of many Japanese and Korean companies. Products for Japanese and Korean companies account for 40% -60% or higher in the production structure of many companies.
This is a huge potential risk and appears, affecting many companies in the last Covid-19 epidemic when the parent companies and supply chains collapsed.

However, Vasi's event shows that there is plenty of room for Vietnamese manufacturing and ancillary companies. The number of products introduced is several hundred, while each car alone has up to 30,000 different components. Not to mention localization requirements (for example, the automotive industry) will force companies to produce or buy domestically produced components and accessories.
Currently, automobile assembly and manufacturing companies in Vietnam are only approaching 40% of localization. Therefore, calling the products made in Vietnam is not entirely accurate.

And that is a great opportunity for foreign component manufacturing companies to participate, invest and manufacture in Vietnam.

 

Of course, not only is pink everywhere, so is Vietnam. In the near future, we will introduce to you the challenges, what investors need to consider when entering Vietnam market.