Supporting industries: A promising direction for many businesses.

(Baonghean) - Supporting industries are a priority in the province's industrial development and investment attraction. However, to date, this sector has only a few participating businesses and remains fragmented, failing to truly meet the requirements of supporting investors and projects under construction in the area.

The initial steps

Supporting industries are understood as all industrial products that play a supporting role in the production of main products. These include components, auxiliary materials, spare parts, packaging products, raw materials for paint and dyeing, etc. More broadly, the production of these "supporting" products often requires other "supporting" products. Therefore, sometimes one product is a support for another.

Strong Plus Elevator Vietnam-Korea Company manufactures elevator components.

For many years, various levels and sectors in the province have been calling for the development of supporting industries. Some businesses have embraced this trend, choosing the "supporting industry" direction to produce and supply products to other businesses, and are currently thriving. Strongplus Elevator Vietnam-Korea Co., Ltd., established under Investment Certificate No. 271024000002 issued by the People's Committee of Nghe An province on June 25, 2013, currently manufactures and distributes mechanical products, bolts, screws, and auxiliary equipment primarily for elevator production, and exports them to South Korea.

Currently, with a small scale, the company exports about 3 containers of screws, equivalent to 5 tons, to South Korea per month according to orders. The company's director, Mr. Le Nguyen, said: The company imports high-quality steel from China and manufactures screws for elevators. The unit is currently operating stably, creating jobs and income for workers. Two other businesses are also doing very well: BSE Vietnam Co., Ltd. in the Southeast Economic Zone and Em Tech Co., Ltd. (South Korea) in Hung Thinh. These two companies produce components for mobile phones such as speakers and other parts. Mr. Cho Sung Koo, CEO of BSE Vietnam, said: The company produces 15 million products per month; in 2015, it produced 20 million products per month for mobile phone assembly, with revenue reaching 5 million USD per month. The factory currently employs nearly 3,000 workers.

Another enterprise is also succeeding in the supporting sector, such as Sabeco Packaging Company, which supplies two-piece beer cans and cardboard packaging to Sabeco's own breweries. Thanks to its self-contained production process, Saigon Beer, Alcohol and Beverage Corporation has proactively secured its own supply of cans and packaging for production, lowering costs compared to importing from other suppliers.

Other businesses, such as the 4th Military Region Packaging Factory and Khanh Vinh Packaging (Bac Vinh Industrial Park), are all suppliers of auxiliary products to other businesses, creating jobs and stable income for workers. Recently, another business is also moving in the direction of providing auxiliary services: Nafood's concentrated passion fruit juice production plant (Quynh Chau - Nghe An). This product will be a raw material for several beverage factories exporting their products.

Commenting on this sector, Mr. Nguyen Van Hai, an industrial monitoring specialist of the Provincial People's Committee, said: Although there are many businesses operating, those that have invested in the production of supporting goods are showing stability. For example, cassava starch is a supporting ingredient for other products such as cosmetics, instant noodles, etc., or fish oil from Xuri Seafood Processing Company in Dien Chau is also an export raw material for processing into other products. Supporting industries contribute to developing the province's potential and strengths.

Opportunities for supporting industries

Supporting industries play a crucial role in increasing the competitiveness of industrial production and contributing to creating an attractive investment environment. However, in Nghe An province in particular and the whole country in general, most businesses are still importing components and supporting materials from abroad, especially from China, South Korea, and European countries…

Manufacturing electronic components at the BSE factory (Southeast Economic Zone).

As a newly emerging garment manufacturing center in the country, Nghe An currently has more than a dozen industrial garment factories, but all accessories such as buttons, zippers, lace, labels, and tags are mainly imported. Nghe An also lacks supporting industries for the automotive and motorcycle industries. For agricultural production, there is a great need for "deep" processing, but this is not yet met, as sauces, spices, and additives for packaged goods are either imported or processed in a rudimentary way for other manufacturers, such as concentrated pineapple juice and black tea. Breweries in the area also have to import supporting raw materials. Mr. Cho Sung Koo, CEO of BSE Vietnam, said: "All the auxiliary products used in the factory's production are imported from China and South Korea. Nghe An province doesn't have them, so the company is often at a disadvantage. For example, the company needs a lot of iron products for stamping molds and making product bases, but Vietnam and Nghe An province don't yet have the capability to manufacture such precise parts, so we have to import about 40,000 products annually."

In Nghe An province, the processing and manufacturing industry increased by 14.14% in 2014 compared to 2013. This was due to the operation of several new businesses such as textiles, beer, dairy, and jewelry processing, leading to a significant increase in production. However, a detailed analysis of supporting industries reveals that it is difficult to find sufficient data to prove the effectiveness of this sector. Situated between major economic zones like Nghi Son and Vung Ang, supporting industries are a direction many economic experts recommend for Nghe An. One of the province's key investment attraction strategies by 2020 is to fundamentally develop into an industrial province focusing on high technology, energy efficiency, and environmental friendliness. Therefore, supporting industries are always a priority to create momentum for sustainable industrial growth. This also presents a good opportunity for businesses to invest in supporting industries.

Chau Lan