While the Samsung Group plans to significantly increase their investment in Vietnam, most Vietnamese enterprises do not have the capacity to become suppliers to the giant firm.
Vietnamese enterprises do not meet Samsung's standards
Speaking at a recent meeting with nearly 200 Vietnmese enterprises, all seeking partnership opportunities, Deputy Minister of Planning and Investment (MPI) Nguyen Van Hieu said Samsung’s registered investment capital in Vietnam would reach as much as USD10 billion by the end of this year, with a network of nearly 100 suppliers.
However, Nguyen Mai, chairman of the Association of Foreign Investors, said, “Among the nearly 100 suppliers for Samsung’s operations in the country, only seven are Vietnamese, and these only supply packing and printing services.
There are very few Vietnamese companies with the technical capacity to qualify for component contracts with the Samsung, and they are small companies and trade through intermediaries."
According to Mai, Vietnam may miss out on much of the opportunity to be brought by Samsung if local enterprises do not improve their capacity.
Shim Won Hwan, general director of Samsung Complex, said, “Vietnam’s support industry leaves much to be desired. This is unfortunate, because Samsung would like to contribute the the country's economic technological development."
After Samsung announced eight strict criteria for companies seeking direct partnership, Do Nhat Hoang, director of the MPI’s Foreign Investment Agency, said that none of the 200 enterprises represented at the gathering met the requirements of becoming "level 1 suppliers".
Jang Hoyoung, general director of purchase at Samsung Electric Vietnam, said, “It would be very difficult for any Vietnamese company to immediately acquire the technologies needed to provide Samsung with the quality of supplies required. Currently the company must make most of its components for in-country production directly."
One anonymous expert in the field said that it would be unrealistic to expect Samsung to readily transfer its technologies to Vietnamese suppliers, as the company has spent billions of USD in R&D developing them.
He suggested that Vietnamese enterprises take a gradual approach and become secondary suppliers first, with an aim to work their way up to "level 1 suppliers".
Meanwhile, Nam said that enterprises should not wait for support from the government or from Samsung Group but begin to improve their technological capacity themselves.