HCM City (VNS/VNA) - In nearly twoyears since it began, Ho Chi Minh City’s investment stimulus programme for thesupporting industries has enabled a number of businesses to acquire new technologiesand equipment, upgrade their factories and enter the supply chains of globallarge corporations, according to the Centre for Supporting Industry Development(CSID).

Trinh Mai Hung, Deputy Director of the CSID, said the programme for 2018-2020 sought to help local companies invest in new technologies and equipmentto make products that satisfy the requirements of manufacturing enterprises andtake more supporting industrial products into global supply chains.

Under the programme, the city fully subsidises loan interest for eligiblebusinesses. So far 24 projects with a total investment of nearly 1.8 trillion VND (77.4 million USD) have receivedloans of 1 trillion VND for up toseven years.

“The investment stimulus policy has created conditions for enterprises toboldly invest in renovating machinery and equipment to participate in thesupply chains of foreign corporations in Vietnam. Enterprises have risen to become tier- 1, 2 and 3 suppliers.”

The programme has significantly increased investment in priority sectors suchas mechanical engineering, chemicals, plastic, rubber, food and foodstuffs,electronics, IT, textiles, and footwear.

In the last two years, the city’s Department of Industry and Trade has directed the CSID to apprisebusinesses directly and indirectly about policies.

Businesses have numerous benefits from the programme, but also somedifficulties in terms of conditions for participating.

To participate in it, a business must have a new factory and machinery andequipment and must get a loan from a bank. The latter is the most importantcondition, but most supporting industry businesses are small or medium-sizedand lack collateral, and so find it hard to obtain loans.

Many also complain about the programme’s time-consuming procedures, which causesthem to lose market opportunities and makes them reluctant to participate.

Hung said his centre has suggested measures to the city government to boost thedevelopment of supporting industries.

They include allotting land to them, building high-tech industrial clusters andproviding more support for industrial development and to innovative start-ups,he said.

At the same time the city regularly organises a programme to connect businesseswith banks to ensure credit, develop key products, carry out trade promotionand other activities to promote exports and support businesses in the field toexpand their market share in and outside the country./.