HANOI: The Covid-19 pandemic highlights the urgent need to promote the development of parts supply industries to enable businesses to be more resilient to shocks or disruptions in global supply chains.

Vietnamese parts supply industries have remained weak in terms of technology, management capacity, and links with foreign direct investment companies, which became evident when the Covid-19 pandemic disrupted supply chains. global supply.

The recent virus outbreaks in industrial parks have put many companies in difficulty with a severe shortage of production components and materials.

Auto maker Huyndai Thanh Cong said the company faces a chip shortage and plans to cut production capacity by 20 percent. That the risks of further production cuts existed if the chip tightening did not subside.

Nguyen Van Ket, director of the mechanics company SKD Vietnam, said his company is also affected by the shortage of chips which depend on imported sources.

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The shortage of components and materials for production worsened during the outbreak of the Covid-19 pandemic in a number of countries, making it more difficult to transport goods.

According to Truong Thi Chi Binh, vice president of the Vietnam Support Industries Association, although production was maintained during the pandemic, nearly 50% of the association’s member companies saw their revenues drop.

Vietnam’s support businesses have remained low in capacity compared to other countries in the region such as Thailand, Indonesia, Malaysia and India, making Vietnamese businesses more vulnerable to global shocks and disruption of value chains.

A report from the Ministry of Industry and Trade showed that for the garment and textile industry, for example, the local sourcing rate was only 40-45% and the industry had to depend on imported fabrics. – Viet Nam News / ANN