HCM City (VNS/VNA) - The domestic supporting industry needs to improveto take advantage of foreign direct investment (FDI) pouring into Vietnam,experts have urged.

In the first six months of the year, Vietnam attracted more than 1,720 new FDIprojects with total registered capital of nearly 7.5 billion USD, according tothe General Department of Statistics.

The period also saw 9.1 billion USD in FDI being disbursed, an 8.1 percentincrease from the same period last year.

More foreign investors have also injected capital to buy shares of orcontributed capital to Vietnamese businesses, totalling around 8.12 billion USDso far, nearly doubling the figure in the same period last year.

Dr Huynh Thanh Dien of the HCM City University of Economics said that whilethis was a positive sign for the economy, authorities should examine thecapability of domestic businesses, especially those in the supporting industry.

The localisation rate in the supporting industry, for example, needs to beincreased to attract foreign-invested companies.

Businesses' ability to be part of the global supply chain for supportingindustries is still limited. For instance, car manufacturers in Vietnam have toimport most parts, while the electrical and electronics industry has to importnearly all of its auxiliary products such as components, plastics and rubberproducts.

Nguyen Phuong Dong, Deputy Director of the city's Department of Industry andTrade, said that many domestic supporting industry businesses continued tostruggle with capital problems, lack of access to market information, andlimited management capability to participate into the global supply chain.

A survey conducted by the department and Samsung showed that the number offaulty products and inventory goods in Vietnamese supporting businesses wasstill high, and the prices of their products were relatively high andnon-competitive.

In addition, there is no concentrated industrial park dedicated to thesupporting industry, so manufacturers in the industry are dispersed throughoutmany areas.

Without an industrial park and adequate infrastructure, businesses find itdifficult to satisfy FDI companies' demands.

To help improve business capability, the department and the city have organisedmany programmes, one of which businesses received capability evaluation,innovative advice, and preferential interest rates to renovate theirtechnologies.

Dong said the Ministry of Industry and Trade and the city would organise moreevents for the supporting industry to network and learn more about the demandsof end-product manufacturers.-VNS/VNA