According to Bang Hyun Woo, the plan to increase the localization rate of Samsung in Vietnam market benefits to Samsung instead of government requirements or the assessment of the people.
He also revealed that Samsung's desire to increase local content ratio is one of its policies.
The deputy general director of Samsung Electronics Vietnam said that raising the localization rate is not simple. "The thought that good companies has high localization rate and vice versa is not right. For example, if Samsung is a pineapple producer, the localization rate will be higher," Woo added.
Samsung currently produces sophisticated and high-tech products so the localization rate can not have a rapid jump as people think.
In the North, in particular Bac Ninh and Thai Nguyen provinces, Samsung factories focus on mobile phones with high specificity and sophistication. In Ho Chi Minh City, Samsung manufactures household electronics with less sophistication so the localization rate of this product line is likely to grow faster.
Woo hopes that there will be more Vietnamese enterprises involved in Samsung's supply chain in the future. He also showed his expectation that these companies will not only supply parts and components to Samsung's manufacturing plants in Vietnam but also export to other markets.
In order to achieve this target, Bang Hyun Woo suggested the higher the connection between Samsung and local enterprises in particular and between foreign direct investment enterprises and local firms in general. He said that having a database of Vietnamese businesses would help a lot.
Currently, Samsung's localization rate in Vietnam is 57% for mobile phones.
During the period 2015-2016, Vietnam has 20 companies as 1st tier vendors for Samsung and now it has increased to 29. According to the plan to 2020, Samsung Vietnam will set up direct trading system with 50 enterprises.
In addition, Samsung plans to increase its consultancy, support and training of human resources for Vietnam to improve its competitiveness in terms of production and quality for local businesses.