Hanoi (VNA) – The Japan External Trade Organisation (JETRO)has been working to increase the level of local content in the manufacturingsector in Vietnam.

According to Idei Ippei, a senior researcher at JETRO, a survey by theorganisation revealed the percentage of domestic procurement in Vietnam forJapanese companies has improved from 22 percent in 2011 to 33.2 percent lastyear. However, the rate was still far lower than of other countries in theregion like Thailand (56.8 percent), China (67.3 percent) and Taiwan (China)(55.4 percent).

Meanwhile, the demand for local supply of industrial raw materials andparts from Japanese enterprises in Vietnam was very high, as 80 percent ofJapanese firms said they wanted to raise the localisation rate to reduce costsand improve competitiveness. Some 64 percent of the firms said they wouldincrease local procurement to shorten delivery time.

To solve the issue, JETRO has aided Vietnamese manufacturers insupporting industries. It has made a list of Vietnamese suppliers of materialsand parts in metal processing, mould making, electronics and more. At the sametime, it has provided information for companies and organised networking eventsfor businesses from both countries.

In addition, JETRO has cooperated with the Japan InternationalCooperation Agency (JICA) to implement pilot projects to support the local supportingindustry.

These projects allow 10 Vietnamese companies, five from the north andfive from the south, that produce parts for automotive, electric, electronicsand lighting industries to receive consultation in production management, salesand marketing, human resources training, financial management, ect., so theycan be more capable when participating in the supply chain of Japanese firms.

Last year, Japan became Vietnam’s largestforeign investor, with a total of 9.11 billion USD, more than 25 percent of thecountry’s total foreign direct investment (FDI).

In the first six monthsof the year, Japanese enterprises have poured nearly 6.5 billion USD ininvestment projects in Vietnam, accounting for 32 percent of total FDI.

According to TsuyoshiShimizu, a specialist at JICA and a consultant at Panasonic Excel InternationalCo. Ltd, 1,600 Japanese enterprises are operating in Vietnam, with nearly 70percent of them planning to expand business in the next two years because ofthe country’s economic growth.

Many Japanese manufacturers want to buyraw materials, machines and spare parts from Vietnam, but the supply andquality of human resources and products from Vietnam have not met theirrequirements, said Shimizu. –VNA