Hanoi, Vietnam, May 24, 2018
—IFC, a member of the World Bank Group, in partnership with the Vietnam Industry Agency under the Ministry of Industry and Trade is launching a new program to help local Vietnamese companies become suppliers for multinational enterprises, while enabling existing suppliers to expand their business and share of added value.
Multinational enterprises (MNEs) have invested heavily in Vietnam, and there is an opportunity to substantially increase MNE local sourcing. Impediments have included the lack of local suppliers who meet the necessary global standards. Given the scenario, the 2-year Vietnam Supplier Development Program aims to help domestic suppliers — throughout the value chain in targeted sectors — meet the requirements of MNEs including quality, price, and delivery, among others. Subsequently, they can be linked to MNEs for future supply opportunities.
“The ability to gain new business locally with MNEs is a first step to increasing the competitiveness of participating local companies,” said Do Thang Hai, Vice Minister of the Ministry of Industry and Trade. “The intention, over time, is to move companies up the value chain so that they can develop more sophisticated products and become globally competitive.”
Over the next two years, the program will work with eight leading MNEs in the automotive, electronics, and energy and household appliance sectors, namely Bosch, Canon, Datalogic, Denso, Ford, General Electric, Panasonic and Toyota. They have been identified based on their interest in sourcing locally and assisting local companies in finding business opportunities. 45 local companies, who are wholly or largely Vietnamese-owned, have been selected to join the program based on recommendations by participating multinationals and various business organizations.
“We are happy to work with local companies which could compete with suppliers from other countries,” said Yamamoto, Corporate Planning Director, Panasonic Vietnam. “We expect this program can help us get on business with some potentially long-term partners and promote our local sourcing.”
Designed in close consultation with MNEs, the program will provide free in-depth business reviews for suppliers. It will also look at the totality of a business to identify areas for improvement, and ascertain specific actions to build supply capabilities and improve long-term competitiveness. Further, efforts will be made to link companies more effectively with potential buyers.
“Large foreign direct investments into Vietnam with operations of global leading firms have brought up opportunities to promote Vietnam’s supporting industry and facilitate local producers’ increased participation in the global value chain,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR. “This program aims to help participating Vietnamese companies to find new businesses from these MNEs and, subsequently, maximize wider international markets, expand high-value production and create more jobs.”
Based on the success, subsequent programs in the future will potentially cover other sectors and MNEs, giving more companies a chance to participate. The program is implemented in partnership with the Vietnam Industry Agency under the Ministry of Industry and Trade, with support from Swiss State Secretariat for Economic Affairs (SECO).
About IFC
IFC, a sister organization of the World Bank and member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY17, we delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit
www.ifc.org
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