The International Financial Corporation (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 portion of added value.
Multinational enterprises (MNEs) have invested heavily in Vietnam, and there is an opportunity to substantially increase MNEs' local sourcing. Impediments have included the lack of local suppliers who meet the necessary global standards.
Given the scenario, the two 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.
Over the next two years, the program will work with eight leading MNEs in the automotive, electronics, 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 potential long-term partners and promote our local sourcing.”
Next week, the business performance and competitiveness of these 45 businesses will be evaluated. The next six months will be seen as a momentum for businesses to organize training courses, meet buyers and connect business.
The second performance and competitiveness evaluation would be conducted in early next year. This would be the basis for the selection of 25 long-term supported enterprises with individual mentors depending on the characteristics of each enterprise.
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 to participate Vietnamese companies to find new businesses from these MNEs and, subsequently, maximize wider international markets, expand high-value production and create more jobs,” he added.