Home / Economy / Industry
USAID supports Vietnam manufacturers in post-Covid19 supply chain realignment
Nguyen Tung 23:50, 2020/07/23
What companies in the supporting industries need most at the moment is the connection with customers, said an official of the Vietnam Association for Supporting Industry.

The USAID-funded Linkages for SMEs project (LinkSME) on July 23 aided the Vietnam Association for Supporting Industry (VASI) to hold the Manufacturing Match Making event 2020 to support local manufacturers to realign their supply chain post Covid-19.

 The Manufacturing Match Making Event 2020 serves as a platform to strengthen linkages among 16 lead firms sourcing in Vietnam and SMEs in local supply chain. Photo: USAID LinkSME

The volatile, uncertain, and complex conditions caused by the Covid-19 pandemic have negatively impacted the social and economic life of many countries, including Vietnam, a country with significant global integration. The Covid-19 pandemic, therefore, has severely affected the country's supply chains in the manufacturing industry.

“What companies in the supporting industries need most at the moment is the connection with customers,” said VASI’s vice chairwoman Truong Thi Chi Binh, referring to a survey conducted by the organization in the second quarter that showed a sharp decline in the number of orders due to Covid-19.

The Manufacturing Match Making Event 2020, therefore, would serve as a platform to strengthen linkages among 16 lead firms sourcing in Vietnam, including Thaco, Samsung Vietnam, Mitsubishi Motors Vietnam, Vietnam Outsourcing, among others and more than 60 SMEs in the local supply chain.

Corporate governance needs to improve

Inconsistent product quality and small-scale production are two major issues restricting Vietnam’s SMEs from joining global supply chains, USAID LinkSME Deputy Director Duong Thi Kim Lien told Hanoitimes on the sidelines of the event.

 USAID LinkSME Deputy Director Duong Thi Kim Lien. Photo: USAID LinkSME.

According to Lien, the linkage between Vietnamese SMEs and leading firms was weak, evidenced by the fact that the USAID LinkSME project had, from the very beginning, attracted 1,700 enterprises, 400 of which later qualified for the first round of evaluation. However, the figure later reduced to 80 after the on-site review, and 19 businesses were introduced to lead firms, resulted in 82 orders so far.

Notably, many manufacturers losing orders during the Covid-19 could not secure new ones. “Some SMEs now lose 40 – 80% of their orders and face the risk of being shut down,” Lien said. 

Lien also pointed to the fact that many SMEs do not have a long-term development strategy or specialized department in business operation, which could be the difference in having order flowing without any disruption.

“Therefore, with the aim to facilitate the supplier – buyer relationship, the USAID LinkSME project will, during the five years of the Project (from 2018 to 2023), enhance local SMEs capacity and upgrade quality of linkage with lead firms and promote their participation in manufacturing supply chains. Furthermore, from the process of supporting enterprises, USAID LinkSME would propose recommendations for the government to improve the business environment for the business community as a whole,” Lien added.

TAG: Vietnam USAID manufacturers covid-19 coronavirus nCoV pandemic supply chains VASI Thaco Samsung Mitsubishi Outsourcing
Other news
10:58, 2020/58/22
How significant is Vietnam-US oil and gas cooperation?
The increasing American investment in Vietnam’s energy sector is a win-win proposition for both countries.
08:51, 2020/51/22
Samsung committed to supporting Vietnam enterprises joining global value chains
Samsung plays a significant role in promoting the Vietnam – South Korea relations and the development of Vietnam’s manufacturing sector, stated Deputy Prime Minister Trinh Dinh Dung.
00:07, 2020/07/20
5 factors making ABA the most prestigious event for ASEAN enterprises
The ASEAN Business Awards (ABA) is a prestigious international event held annually by the ASEAN Business Advisory Council (ASEAN BAC) since 2007.
23:57, 2020/57/19
Record high foreign reserves demonstrates Vietnam economic resilience: WB
The World Bank expected the government to stimulate the recovery in the short term and preserve fiscal and debt sustainability in the longer term.
00:42, 2020/42/17
Climate change interrupts operations of half of Vietnamese enterprises
As one of the countries most affected by extreme climate events, climate change has multifaceted negative impacts on activities of Vietnamese enterprises.
10:55, 2020/55/16
Electricity demand in Vietnam forecast to grow by 9% from 2021 onwards: Fitch
Vietnam’s installed capacity is set to increase to about 70 gigawatts (GW) by end-2022 (2019: 55GW), led mainly by private players and other government-owned entities.