Nghe An spends 32.8 billion VND to develop supporting industry sector

Forming projects in the field of supporting industries

Up to now, Nghe An has attracted a number of meaningful projects that create highlights in supporting industries. In the field of manufacturing electronic components and accessories, in 2014, there was Hitech BSE Vietnam Electronics Factory specializing in manufacturing electronic and telecommunications equipment and devices used in mobile phones, high-tech semiconductor chips invested in Zone C, Nam Cam Industrial Park with a value of 30 million USD, creating jobs for 3,000 people.

In mid-2019, Em-Tech Vinh Factory was built in VSIP Hung Nguyen Industrial Park with a scale of nearly 100 million products/year, creating jobs for 2,000 people.

And another electrical equipment factory specializing in manufacturing supporting products for the electrical industry... has appeared in Bac Vinh Industrial Park.

In addition to the above 3 establishments, the province currently has 17 enterprises specializing in the production of electrical and electronic equipment and 163 enterprises and establishments operating in the field of mechanical engineering, including 5 mechanical industry enterprises, 23 establishments processing some machinery and equipment and 6 establishments producing equipment for shipbuilding and fishing gear...

Similarly, in the field of supporting industries for packaging, printing and label production, the province has a number of large-scale packaging factories in Bac Vinh Industrial Park; 5 facilities producing additives for the packaging industry in Vinh City, Dien Chau, Nghia Dan. In total, the whole province has about 20 enterprises specializing in the production of packaging accessories.

In the textile sector, Hoang Thi Loan Knitting Factory supplies auxiliary materials to 65 garment factories and establishments in the area. In addition, although there is no automobile and motorbike manufacturing and assembly corporation, there are 3 enterprises and a number of small establishments in the area that produce spare parts such as manufacturing and assembling car bodies and auxiliary equipment for repair and mechanical processing...

To develop the textile industry, many supporting textile factories are needed. Photo: Nguyen Hai

With great efforts, Nghe An has formed a supporting industry group with about 90 enterprises, accounting for 7.6% of the total number of enterprises in the entire industry.

Mr. Nguyen Van Hiep - Head of Industry Department, Department of Industry and Trade

Lack of industrial projects supporting satellites

Despite the above positive changes, Nghe An's supporting industry still has many limitations. First of all, in terms of investment resources, although the province has made great efforts, investment in this field in the province is still low. Specifically, from 2012 to present, there are about 50 million USD and 9,000 billion VND.

Mr. Nguyen Van Hiep - Head of Industry Department, Department of Industry and Trade said: While the industrial index is increasing rapidly, the supporting industry, despite high expectations, has only reached over 7,000 billion VND in production value, accounting for approximately 14% of the total industrial production value. The province still lacks leading projects, creating motivation to attract satellite supporting industry projects.

Nghe An lacks satellite industrial park projects and vice versa. Photo: VSIP Industrial Park has attracted a number of factories to invest in construction and put into production.

In addition to the above reasons, the supporting industry in Nghe An is still quite backward and weak in technology, making it difficult to participate in the global value chain. Currently, according to the international division of labor, each province and locality can produce one product in the chain, but the province's facilities are small and backward, so they cannot connect and link with businesses, especially FDI enterprises.

Besides, the low level of technology makes the products expensive to produce and the price is high, making it difficult to compete.

A representative of a packaging manufacturing company said: Nghe An currently has 5 packaging factories, so competition in this field is quite fierce. Although the province has white stone powder as raw material, because most of the technology and raw materials must be imported, it is necessary to strengthen links to develop. Currently, due to small scale, some factories in Nghe An mainly produce raw materials and send them to other provinces to produce packaging, so there is waste and the added value created is not high...

Packing raw materials for packaging production from white stone at a factory in Nghia Dan Industrial Park. Photo: Nguyen Hai

Priority is given to attracting high-tech industrial projects

Based on the above situation, in April 2019, Nghe An province developed and approved the Nghe An Supporting Industry Development Program for the period from now to 2025. Accordingly, the province aims to complete the supporting industry production system by 2025 to effectively and firmly develop industries.

Specifically, Nghe An strives for the value of supporting industry production to increase by an average of 9-10% per year so that by 2025 it will account for 10-12% of the total industrial value; by 2020, the value of supporting industry will account for 20% of the export value of industrial products; training of high-tech workers will increase by an average of 5% per year and account for 15% of the industrial workforce.

Japanese agencies and enterprises survey VSIP Nghe An Industrial Park in Hung Nguyen. Photo: Thanh Le