Hanoi (VNA) - The increasing number of Vietnamese suppliers who provide partsand components to Samsung would not only help Samsung Vietnam (SEV) reduce itsproduction costs, but also develop the country’s auxiliary industry, accordingto Kim Dong Hwan, SEV’s deputy general director.

“However, SEV has still been hard pressed to search for localvendors who could provide hi-tech spare parts,” Hwan told the media at a visitto three firms joining in its consultation programme for vendors - an eventheld by Samsung experts last week in the northern province of Bac Ninh.

He said that half of SEV’s 29 Vietnamese tier-1 vendors areproviding just simple spare parts and components in its supply chain.

Meanwhile, Samsung has been searching for local support firms inthe hi-tech area.
 
Samsung has some 150 support companies, both local and FDI,to maintain its production in Vietnam. This means that Vietnamese firmsaccounted for only 20 percent of SEV’s demand for auxiliary products, due tothe weak ability of local firms.

To increase the local firms’ capacity as well as respond to thecall of the Vietnamese Government for improving their competitiveness, Samsungorganised the consultation programme for 130 local companies with an aim thatsome 50 Vietnamese companies would become SEV’s tier-one vendors by 2020.

The number of Samsung’s tier-1 Vietnamese vendors has increaseddramatically, from four businesses in 2014 to the current 29 business. Thesevendors are participating in the supply chain for Samsung’s plants in Vietnam,including SEV, SEVT, SEHC (Samsung Electronics HCM City Complex), SamsungDisplay Vietnam (SDV), Samsung SDI Vietnam and Samsung Electro-Mechanics Vietnam.

Last week, Samsung Vietnam’s management board paid a visit andsurveyed six vendors, including Manutronics Vietnam JSC, Tien Thanh JSC, Bac VietTechnology JSC (Bac Ninh), Nhat Minh Company, Minh Man Manufacturing Tradingand Printing Labels Co Ltd, and Vinavit Corporation. The six vendorsparticipating in this consulting programme have gained excellent results inimproving production and increasing their competitiveness capabilities.

Samsung has also collaborated with the Ministry of Industry andTrade (MoIT) to expand the business consultation programme, by establishing anAdvisory Board to build and implement the programme on a large scale.

Chu Thi Thu Phuong, chairman of Manutronics – a tier-2 vendor forSEV, and Samsung Electronics Vietnam (SEVT), producing compact disc (CD, DVD,CD-R) and hi-tech electronics assembly, said the consultation programme helpedthem expand production, changing management ideas and working habits. It alsohelped to reduce the error rate by 63 percent, thus increasing productivity by20-35 percent and decreasing equipment loss rates by up to 82 percent.

The Samsung Group has announced impressive business results duringthe first three quarter of the year, with a significant contribution by SamsungVietnam.

According to the Korean group’s integrated financial report in thethird quarter of 2017, the group’s revenue was 152.45 billion USD, with aprofit of 26.2 billion USD.

Samsung’s four companies in Vietnam include SEV, SEVT, SDV andSEHC, which contributed total revenues and profits of 45.6 billion USD and 4.95billion USD, respectively. Specifically, SEV’s revenues rose 0.5 percent to 13.4billion USD, while profits rose by 44 percent to 1.64 billion USD during thisperiod.-VNA