200 VN firms in Samsung chain
Nearly 200 Vietnamese enterprises are participating in the component supply chain used by three Samsung plants in Viet Nam, including 20 tier-1 vendors and 178 tier-2 vendors.
A production line of Viet Hung Plastic Company in the northern province of Hung Yen supplying packaging to Samsung Viet Nam.
Also, Samsung plans to raise the number of level-1 suppliers in Viet Nam to 29 this year, said Han Myoungsup, President of Samsung Complex Viet Nam.
Several local companies were able to join Samsung’s production chain, showing that Viet Nam’s support industry could be developed if domestic firms know how to take advantage of the opportunities provided by large enterprises.
Samsung Viet Nam’s management board last week visited and surveyed the two companies, An Lap Plastic Co Ltd in Ha Noi’s Long Bien District and Viet Hung Plastic Co Ltd in Hung Yen Province. It also worked directly with three other suppliers, including PTE Company, Minh Nguyen Company and Viet Hung 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 Viet 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-Viet 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 Viet 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.
Hoang Anh Tuan, President of Viet Hung 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 VND2 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,” Tuan 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.
Truong Quang Khoi, An Lap’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 Viet Nam, with three manufacturing plants in Bac Ninh (SEV), Thai Nguyen (SEVT) and HCM City (SEHC). With an export turnover of over $37 billion in 2016, Samsung Electronics in Viet Nam contributed 20 per cent to Viet Nam’s exports.
This year, Samsung Electronics in Viet Nam has set a target of 7-10 per cent growth in export turnovers. Samsung aims to not only turn Viet 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.