Poor information about parts suppliers annoys Japanese investors

"Japanese enterprises find it hard to choose Vietnamese businesses as suppliers," Matsushita Kazuhiro, head of the competition and industrialization task group and CEO of Panasonic Vietnam, said. 

"We do have a list, but since information available about their capabilities is so unclear it is difficult to choose."

He made the remarks at an intermediary meeting evaluating the 7th phase of the Vietnam-Japan Joint Initiative Thursday.

Vietnam needs to create a supplier introduction system that provides sufficient information about the health of companies listed, and this would make finding businesses partners easier, he said.

According to the Japan External Trade Organization (JETRO), the rate of use of local components in Vietnam was only 33.2 percent in 2017, down from 34.2 percent in 2016. The supply rate by domestic enterprises was even lower, at only 13.1 percent compared to 14.1 percent in 2016. 

Do Nhat Hoang, head of the Ministry of Planning and Investment’s foreign investment agency, said while Vietnam’s supporting industries are not fully developed, the fault is not entirely theirs but also lies in inadequate development planning.

"The efforts of enterprises are clear, but they are confused when policy is not cohesive. We are interested in learning from how Japan helped Thailand develop its supporting industries 40 years ago in order to build equally strong supporting industries."

Hoang asked the Japanese side to come up with more specific supplier selection criteria based on which Vietnam can screen and introduce more suitable suppliers.

Nguyen Thi Xuan Thuy of the Ministry of Industry and Trade’s industry department said her ministry would make suitable amendments to supporting industry development legislation this year. 

The Vietnam-Japan Joint Initiative was launched in April 2003 by establishing a forum on policy dialogue between Japanese investors and Vietnamese ministries and sectors to improve Vietnam’s business environment and strengthen its competitiveness. 

The initiative deals with issues such as macroeconomic policy, investor regulations, real estate legislation, disclosure obligations, and labor issues. 

By the end of last year Vietnam had attracted more than 27,350 foreign projects with a total registered investment of $340 billion. 

Japan alone has pledged to invest nearly $57 billion in around 4,000 projects in 30 years. Last year it was the biggest investor in Vietnam with registered capital of $8.6 billion.