Vietnamese firms’ capability of supplying products for supporting industries is now limited to simple products, according to Japanese producers at the exhibition that wrapped up last week in HCMC.

As a firm specializing in producing printers for export, Canon regularly attends exhibitions on supporting industries to seek components suppliers for its two plants in Bac Ninh Province and one in Hanoi City, aiming to increase the local contents of its products manufactured in Vietnam.

According to Okada Kinya from Canon Vietnam, the firm can find some local component suppliers every year to increase the localization rate of printers and lower the product price. However, most of high-tech components are supplied by foreign-invested enterprises in Vietnam.

Meanwhile, Vietnamese enterprises only produce simple products such as paper boxes, plastic bags or products of low technology. After over ten years doing business in Vietnam, Canon has so far increased the localization rate to 70%, with around 60% of components supplied by foreign-invested enterprises.

Similarly, Toyota Vietnam has also joined the above annual exhibition for several years to find simple auto components such as plastic and rubber products also to increase the localization rate and lower the price.

With such exhibitions, Toyota Vietnam can normally build a database of potential suppliers. However, after close inspection and evaluation, there are very few suppliers meeting Toyota’s safety, environment and quality requirements.

Besides, Toyota Vietnam’s suppliers are mainly foreign-invested firms, with only one Vietnamese firm.

Some other Japanese producers such as Suzuki, Brother and Nidec said that the quality of products supplied by Vietnamese firms was not high.

The weakness of Vietnamese suppliers, according to Japanese firms, is that they are unfamiliar with the harsh competitive environment, which has hindered the development of Vietnam’s supporting industries.

According to a survey among 4,000 Japanese enterprises in Asia and Oceania conducted by the Japan External Trade Organization (JETRO) last year, the local contents ratio of Japanese products in Vietnam was only 28.7% compared to 60% in China, 53% in Thailand, 41% in Indonesia and India, and some 40% in Bangladesh and Malaysia.

This year’s exhibition on supporting industries attracted over 100 local suppliers and Japan manufacturing firms in the auto, motorcycle and electronic fields. Among these, there were up to 53 Japanese producers wanting to find Vietnamese suppliers.

Sotaro Nishikawa from JETRO said that the expo aimed to help Vietnamese firms expand transactions and boost sales of products to Japanese customers right in the local market.

“With the expo, we also open opportunities to help Japanese producers lower the production cost and operate smoothly in Vietnam,” he said.