200 Vietnamese firms in Samsung chain
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Nearly 200 Vietnamese enterprises are participating in the component supply chain used by three Samsung plants in Việt Nam, including 20 tier-1 vendors and 178 tier-2 vendors.
Also, Samsung plans to raise the number of level-1 suppliers in Việt Nam to 29 this year, said Han Myoungsup, President of Samsung Complex Việt Nam.
Several local companies were able to join Samsung’s production chain, showing that Việt Nam’s support industry could be developed if domestic firms know how to take advantage of the opportunities provided by large enterprises.
Samsung Việt Nam’s management board last week visited and surveyed the two companies, An Lập Plastic Co Ltd in Hà Nội’s Long Biên District and Việt Hưng Plastic Co Ltd in Hưng Yên Province. It also worked directly with three other suppliers, including PTE Company, Minh Nguyên Company and Việt Hưng Plastic Co Ltd in HCM City.
This field survey is part of Samsung’s programme to provide experts to help Vietnamese vendors improve their capacity to join Samsung’s supply chain.
“Samsung Việt Nam has also recorded a significant breakthrough in raising the localisation rate of products, from 35 per cent in 2014 to 51 per cent in 2016. This is a great contribution that helps made-in-Việt Nam products become popular worldwide,” Han said.
Samsung’s five-vendor visit is part of the supporting programme of Samsung’s experts for Vietnamese businesses. Accordingly, Samsung’s experienced experts from South Korea have directly assisted the five enterprises in the past three months to improve their production process to assure they meet Samsung’s criteria. They are also five of 14 Vietnamese vendors who have received Samsung’s direct assistance since September 2015.
This supporting programme has also confirmed a strong commitment of Samsung, in response to a call by the Government of Việt Nam, which is increasing the localisation rate and the presence of Vietnamese enterprises in Samsung’s component supply chain.
“I do hope that, through Samsung’s supporting programme, Vietnamese enterprises could gain the knowledge and experience to enhance their capacities. Samsung believes that if a product can be localised, we will maximize its localised content,” Han added.
““Samsung Việt Nam has also recorded a significant breakthrough in raising the localisation rate of products, from 35 per cent in 2014 to 51 per cent in 2016.”
Hoàng Anh Tuân, President of Việt Hưng Plastic Company, said their turnover has seen rapid growth since they have been supplying packaging to Samsung. Last year, their sales to Samsung accounted for half of their total VNĐ2 trillion (US$88.9 million) turnover.
“Our largest advantage from Samsung’s supporting programme is the change in mindset. We commit to always learning and changing in order to apply experience from Samsung in the best way,” Tuân added.
“Being suppliers to Samsung could be a quality measurement to help local firms easily participate into other value chains. We are also a packaging supplier to LG and Canon,” he noted.
He emphasised that joining the supply chain for Samsung has been transparent and open to all businesses. Those seek to participate in the chain without sufficient capacity would be immediately removed.
Trương Quang Khởi, An Lập’s director, said they have opportunities to modernise their company after joining the Samsung production chain.
“We have received support from Samsung to upgrade our workshops, equipment and technology, as well as to learn effective management models,” he added.
Samsung Electronics is one of the largest foreign investors in Việt Nam, with three manufacturing plants in Bắc Ninh (SEV), Thái Nguyên (SEVT) and HCM City (SEHC). With an export turnover of over $37 billion in 2016, Samsung Electronics in Việt Nam contributed 20 per cent to Việt Nam’s exports.
This year, Samsung Electronics in Việt Nam has set a target of 7-10 per cent growth in export turnovers. Samsung aims to not only turn Việt Nam into the world’s smartphones and electronic appliance production base, but also create more opportunities for Vietnamese enterprises in the field of supporting industries to become involved in Samsung’s global supply chain.
Questions & Answers
Q.What is Samsung's target for increasing its top-tier Vietnamese suppliers this year?
What is Samsung's target for increasing its top-tier Vietnamese suppliers this year?
Samsung aims to increase its level-1 suppliers in Việt Nam to 29 this year. This represents an addition of nine new tier-1 vendors to the current 20, as stated by the President of Samsung Complex Việt Nam.
Q.How has the localisation rate of Samsung's products in Việt Nam changed over time?
How has the localisation rate of Samsung's products in Việt Nam changed over time?
The localisation rate of Samsung's products in Việt Nam has significantly increased. It rose from 35 per cent in 2014 to 51 per cent in 2016, marking a substantial breakthrough for made-in-Việt Nam goods.
Q.What specific assistance has Samsung provided to Vietnamese companies joining its supply chain?
What specific assistance has Samsung provided to Vietnamese companies joining its supply chain?
Samsung has provided experienced experts from South Korea to assist Vietnamese vendors directly. This support helps them improve production processes, upgrade workshops and equipment, and learn effective management models to meet Samsung's criteria.
Q.What percentage of Việt Nam's total exports did Samsung Electronics contribute in 2016?
What percentage of Việt Nam's total exports did Samsung Electronics contribute in 2016?
In 2016, Samsung Electronics in Việt Nam had an export turnover exceeding $37 billion. This substantial amount accounted for 20 per cent of Việt Nam’s total exports, highlighting Samsung's significant economic impact.
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