Supporting Industry - The Foundation for Promoting Sustainable Development

On December 22, 2024, the Politburo issued Resolution No. 57-NQ/TW on breakthroughs in science and technology development, innovation and national digital transformation. With unprecedented goals and drastic solutions, Resolution 57-NQ/TW is expected to create a strong breakthrough to enter a new era. In order to contribute to realizing Resolution No. 57-NQ/TW, Quang Ninh determined to strongly promote the development of the processing and manufacturing industry, including supporting industries for the mechanical engineering, automobile manufacturing and assembly and railways - strategic areas with the potential to create high added value and promote the sustainable development of the province.

Synchronous infrastructure of Van Don International Airport.

Solid foundation for supporting industry development

Quang Ninh has a special strategic position, being an economic bridge between Vietnam and China and Northeast Asia, with a synchronous transport infrastructure system, international seaports, modern airports, industrial parks and economic zones that are developing strongly, gradually becoming an industrial center of the Northern region. In recent years, the province has achieved many important achievements, such as: continuously maintaining economic growth momentum (GRDP) of about 10% in the period 2015-2023. In 2024, in the context of difficulties and challenges, economic growth still reached 8.42%, higher than the national average. The scale of the economy reached over 347,500 billion VND (ranked 7th in the country), GRDP per capita in 2024 reached over 10,000 USD; State budget revenue for the whole year reached 55,600 billion VND.

From a province with an economic structure heavily dependent on mineral exploitation and thermal power, from 2020 to now, Quang Ninh has transformed strongly. Notably, the transport infrastructure system has been invested in a modern and synchronous manner with many types, such as: The expressway along the province is nearly 200km long; Van Don International Airport meets 4E standards; seaports and anchorages can receive ships with a tonnage of up to 200,000 tons... In Quang Ninh, there is the Yen Vien - Pha Lai - Ha Long - Cai Lan railway line. Currently, the Ministry of Construction is reporting to the Government to restart the project to upgrade this railway line, expected to be completed before 2030. The province also reported to the Government to build the Nam Hai Phong - Ha Long railway line to connect with the Lao Cai - Hanoi - Hai Phong route, build the Ha Long - Mong Cai railway line to connect with China and 3 urban railway lines.

Van Don - Mong Cai Expressway seen from above. Photo: Do ​​Phuong

With the best transport infrastructure in the country, thanks to outstanding investment incentives and abundant human resources, Quang Ninh is gradually becoming a modern industrial center, attracting domestic and foreign investment. The province has 5 economic zones with a total area of ​​over 375,000 hectares, 7 industrial parks with a total area of ​​nearly 6,900 hectares and 6 industrial clusters with a total area of ​​over 375 hectares. The economic zones, industrial parks and industrial clusters have been invested in a systematic infrastructure, ready to receive secondary projects into operation.

Fujix Electronic Vietnam factory at Amata City Ha Long Industrial Park (Quang Yen Town).

In the period of 2021-2024, the processing and manufacturing industry is the fastest growing industry in Quang Ninh with an average growth rate of 21.1%; in 2024, the total added value of the industry will reach over 43,000 billion VND (accounting for 12.43% of GRDP). During this period, investment capital in the province's processing and manufacturing industry will increase sharply with a total investment capital of 8.62 billion USD (FDI capital reaching over 6.08 billion USD, domestic capital reaching over 50,000 billion VND). In 2023 and 2024, Quang Ninh will be on the list of provinces attracting the leading investment capital in the country, especially large-scale industrial production projects with high added value.

The most important highlight is the Thanh Cong Viet Hung Automobile Factory project located in the Thanh Cong Viet Hung Automobile and Supporting Industry Complex. With a design capacity of more than 120,000 vehicles/year, Thanh Cong Viet Hung Automobile Factory is the first automobile factory in Vietnam and Southeast Asia specializing in assembling and manufacturing cars under the Skoda brand - the largest automobile brand in the Czech Republic. The production line applies the most advanced and modern technologies of Skoda Auto, meeting European standards with a high level of automation.

Thanh Cong Viet Hung Automobile Factory was inaugurated and put into commercial operation on March 26. It is expected that in the coming time, Thanh Cong Viet Hung Automobile and Supporting Industry Complex will continue to attract investment projects in the automobile supporting industry, making Quang Ninh one of the country's major automobile manufacturing centers.

These results are clear evidence of the correctness of the province's policy of developing the processing and manufacturing industry, creating a solid foundation for the development of supporting industries when most of the supporting industries are in the processing and manufacturing industries. Especially the supporting industry for the mechanical engineering industry serving the automobile assembly industry and the development of the railway system, strategic areas, capable of creating high added value and promoting the sustainable development of the province.

Thanh Cong Automobile Factory is equipped with a modern production line system with a high level of automation. Photo: Do ​​Phuong

Build a long-term, overall strategy

In the context of Vietnam's accelerating global economic integration and participation in many free trade agreements, Vietnamese mechanical enterprises are facing many great opportunities. According to the assessment of the Department of Industry (Ministry of Industry and Trade), there are currently about 3,100 mechanical engineering enterprises nationwide, with 53,000 production facilities, accounting for nearly 30% of the total number of processing and manufacturing enterprises in Vietnam. The total revenue of the industry reached more than 1.7 million billion VND, creating jobs for over 1.2 million workers. The domestic mechanical, machinery and equipment industry has gradually mastered and participated in the production and supply chain for a number of large enterprises such as: Toyota, Thaco, Thanh Cong...

Many domestic mechanical enterprises have stepped up investment and technology transfer, improving competitiveness through the application of advanced technology in the production of products such as molds, mechanical components, plastics, technical rubber, etc. Specifically, domestically produced metal components have met about 15-40% of the demand for components for automobile production (depending on vehicle type). In the railway sector, for locomotives, freight cars, passenger cars, if the orders have suitable quantities, shipbuilding, train and automobile enterprises can participate in manufacturing with a localization rate of up to 60%.

It is estimated that from now until 2030, the demand for mechanical engineering market will be about 310 billion USD, the demand for automobile market alone will be 120 billion USD, however, Vietnam currently only meets about 1/3 of the demand. Vietnam is also continuing to be an attractive destination, attracting more FDI projects as many foreign customers come to Vietnam to find new suppliers. This is an opportunity for Vietnamese mechanical enterprises in the context of declining global orders due to the impact of the world economic recession.

According to experts, with all the advantages of infrastructure, planning, human resources, etc., Quang Ninh can participate deeply and have an important position in the value chains of domestic automobile manufacturing and assembly industries, and develop the railway system. Especially when the National Assembly passed Resolution No. 172/2024/QH15 dated November 30, 20240 on the investment policy of the North-South high-speed railway project, opening up many development opportunities for the railway, mechanical engineering and logistics industries.

In Quang Ninh, the railway system is being planned to develop strongly with 3 national railway lines, including: 1 existing line is Yen Vien - Pha Lai - Ha Long - Cai Lan; 2 new planned lines are Nam Dinh - Thai Binh - Hai Phong - Quang Ninh (South Hai Phong - Ha Long section) and Ha Long - Mong Cai line, with 2 branches down to Hon Net - Con Ong seaport and a branch connecting to Hai Ha seaport. 3 urban railway lines, including: Dong Trieu - Uong Bi - Quang Yen - Ha Long line, connecting to Hai Duong, Hai Phong; Ha Long - Cam Pha - Van Don line, connecting the central area with Van Don Airport; Hai Ha - Mong Cai line, connecting Hai Ha Economic Zone with Mong Cai City.

The implementation of these projects will create favorable conditions for the development of supporting industries for the railway industry, promoting the production of components, equipment for locomotives, carriages, electrical systems, rails, and control sensors locally.

The Yen Vien - Pha Lai - Ha Long - Cai Lan railway is about to be upgraded.

However, Quang Ninh in particular and the whole country in general are also facing significant challenges, such as: The domestic supporting industry still depends on imported technology, machinery, components and spare parts; the technological level and competitiveness of domestic enterprises are not high; costs for research and development are still modest; highly skilled workers in precision mechanics and automation are still limited; the connection between FDI enterprises and domestic enterprises is not tight, causing the supply chain to be fragmented.

Ms. Nguyen Thi Hien, Director of the Department of Industry and Trade, said: These issues pose an urgent need for Quang Ninh to develop a comprehensive, long-term, and synchronous strategy to develop supporting industries for the mechanical engineering, automobile manufacturing and assembly, and railways. Therefore, on March 26, the province organized a workshop on developing supporting industries for the Vietnamese mechanical engineering industry in conjunction with domestic automobile manufacturing and assembly, and developing the Vietnamese railway system in Quang Ninh. This is an important forum to assess the current situation, opportunities, and challenges of the mechanical engineering supporting industry, especially in the field of automobile manufacturing and assembly and railway equipment, and to propose strategic solutions for sustainable development of this industry in the global value chain. At the workshop, Quang Ninh province hopes that, based on the valuable opinions from experts, businesses, and managers, Quang Ninh will develop a comprehensive, long-term, and synchronous strategy to develop supporting industries for the mechanical engineering, automobile manufacturing and assembly, and railways, creating growth momentum in the 2025-2030 period and beyond. The workshop is also a step to concretize the spirit of Resolution 57-NQ/TW of the Politburo - considering science, technology, and innovation as key driving forces for economic development.

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Source: https://baoquangninh.vn/cong-nghiep-ho-tro-nen-tang-thuc-day-phat-trien-ben-vung-3350062.html