Binh Duong is a province with a rapid industry development, including the important contribution of the auxiliary industry (AI). However, the development of provincial AI is not commensurate with its potential and still has many limitations. In particular, negative impacts of the Covid-19 have caused many difficulties to enterprises in this industry. To encourage the AI development, the province is concentrating resources to support AI enterprises to overcome difficulties.
Garment and footwear industries are in desperate need of domestic raw materials to replace imported materials. In photo: Production activities at Thai Binh Joint Stock Company.
The Covid-19 has affected many fields and industries, especially in manufacturing sectors, which depend on the supply of imported raw materials. Facing this situation, provincial industry and trade authority is boosting the restructuring of industrial production sectors, in which the focus is on AI sector.
However, due to interrupted exports in key export markets, especially the shortage of input materials exported from China for production has badly affected garment, leather footwear, wood processing industries... While the problem of raw material source has not been solved, and big customers in Europe, America etc. continuously canceled or postponed their orders, the Covid-19 reappears, making it even more difficult for businesses.
According to representatives of provincial Department of Industry and Trade, there are currently nearly 2,300 enterprises producing and trading AI products. Faced with difficulties in raw materials and auxiliary materials during the epidemic, enterprises clearly perceive the importance of using supplies from domestic businesses. Although, the capacity of provincial AI has been significantly improved, it has met only 40-45% demand of the textile, garment, and footwear industries; 10-20% demand of automobile (less than 9 seats) production and assembly; 15% demand of electronics, informatics and telecommunications; 5% demand of specialized electronics and high technology...
According to Nguyen Quang Vu, Chairman of Binh Duong Leather - Footwear - Handbag Association, in the current context, the fact that a few enterprises invest in the production of raw materials cannot solve the actual needs. In addition, the domestic supply of raw and auxiliary materials is still the goal of garment enterprises, but the satisfaction rate is still low. Products requiring high technology now have to be imported from abroad to meet strict requirements of customers, especially big partners. Therefore, ministries, branches and localities need to have specific raw material development strategies; At the same time, only a better tax incentive mechanism for projects investing in the production of raw materials and supporting industries can solve the problem of rules of origin, helping businesses make good use of opportunities from the new generation of free trade agreements (FTAs).
To improve the effectiveness of AI support, Department of Industry and Trade also strengthened close connections with associations to find out their needs. The Department collaborated with Management Board of provincial Industrial Parks to hold a supply-demand connection program, creating conditions for supporting industries to increase opportunities to reach domestic and foreign partners, expand markets, and increase high capacity, step by step join the global supply chain.
To continue solving difficulties and stimulating AI development, the province has launched many incentive and supportive mechanisms and policies. So far, there have been many AI projects deployed from major corporations in the world. For example, the project of tire production factory, automobile airbag with investment capital of up to $1 billion of KOLON group; and project of Tetra Park Binh Duong (Singapore) specializes in the production of sterile packaging from paper, plastic and aluminum for food packaging...
Mai Hung Dung, Permanent Vice Chairman of Provincial People's Committee, said to develop sustainable industrial production, Binh Duong has been actively supporting the development of AI, which helps to increase the value of industrial products produced by enterprises in the country. In the coming time, Binh Duong will continue to prioritize the development of industries with high added values, gradually increase the localization rate of products...
Reported by Ngoc Thanh - Translated by Ngoc Huynh
