Here raises the question: Does the presence of the investors open more chances for the support industry in Vietnam?
LG Display is the first billion USD investor in Vietnam with registered capital of 1.5 billion USD.
The other investor is Vietnam mobile with over 1.2 billion USD.
Although this is the registration stage only, however, the companies say that they are looking for support firms in Vietnam.
Suk Myung Su, General Director of LG Display Vietnam said: “We’ll try to find new ways and approaches to co-operate with Vietnamese businesses”.
However, the arrival of this foreign business doesn’t mean there are more chances for the domestic supporting enterprises. Even the 4P Company Limited, which signed the contract in supporting LG a few years ago, seems to be reserved.
Hoang Minh Tri, General Director of 4P Company Limited said: "First we must have competitive prices. Second, the product quality must be stable. Third, the product should be delivered according to the schedule and the technology should be modern enough to maintain the product quality. Otherwise, businesses can’t join the chain".
While the domestic businesses seem reluctant, some foreign firms have taken action. Although the LG Display project has just been launched for a month, there are three foreign firms majoring in spare part come to research and invest in Tràng Duệ Industrial Zone, where the LG Company is located. According to representative from the industrial zone, foreign businesses can enjoy the same investment incentives as domestic firms. Therefore, Vietnamese supporting enterprises should have appropriate strategies if they want to have order from the FDI enterprises.
Bui The Long, Saigon – Hai Phong Industrial Park JSC said: ”Many small businesses have to come to large ones to ask for cooperation. However, I think that we should have a long term strategy. We should form a group according to the field of operation and components, and choose the firms with the greatest potential to support them so that they can act as a bridge for smaller enterprises”.
According to statistics, each FDI enterprise invested in Vietnam needs 20 to 30 supporting enterprises.
However, Vietnamese supporting firms accounts for only 10% among such enterprises.
Although FDI in the first 5 month increased sharply compared with the same period last year, support businesses in Vietnam will have a lot to do to make the most of the opportunity.
