HANOI: The Covid-19 pandemic is highlighting the urgent need for promoting the development of parts-supply industries to enable enterprises to be more resilient to shocks or disruptions to global supply chains.

       Vietnam’s parts-supply industries remained weak in terms of technology, management capacity and linkages with foreign direct investment companies, which became evident when the Covid-19 pandemic caused disruptions to global supply chains.

       The recent virus outbreaks at industrial parks pushed many enterprises into difficulty with a severe shortage of components and materials for production.

       Automobile manufacturer Huyndai Thanh Cong said that the company was facing a chip shortage and planned to reduce 20% of their production capacity. That risks of further cuts in production existed if the chip crunch did not ease.

       Nguyen Van Ket, director of mechanics company SKD Vietnam, said that his company was also affected by the shortage of chips which depends on imported sources.

       StarCarSifu

       The shortage of components and materials for production has become more severe during the outbreak of the Covid-19 pandemic in a number of countries which makes transportation of goods more difficult.

       According to Truong Thi Chi Binh, deputy president of the Vietnam Association for Supporting Industries, although production was maintained during the pandemic, nearly 50% of the association’s member enterprises saw drops in revenue.

       Vietnam’s supporting enterprises remained of weak capacity compared with other countries in the region such as Thailand, Indonesia, Malaysia and India, which made Vietnamese enterprises more vulnerable to global shocks and disruptions to value chains.

       A report from the Ministry of Industry and Trade showed that for the garment and textile industry, as an example, the local procurement rate was just 40%-45% and the industry has to depend on imported fabric. — Viet Nam News/ANN