“Agile – Ready for Innovation” is essential for Hai Phong’s SMEs to avoid being excluded from the game in an increasingly integrated economy.
Challenges Remain...
Hai Phong’s small and medium-sized enterprises (SMEs) have many opportunities to participate in supply chains, especially in industries such as processing, manufacturing, textiles, and logistics—thanks to advantages like a strategic geographic location, developed transportation infrastructure, and an abundant labor force.
However, Vietnamese businesses in general, and Hai Phong’s in particular, have so far only been involved in simple processes such as outsourcing and assembly, which add little value and are inefficient. The connection between foreign direct investment (FDI) enterprises and domestic companies remains limited. Without proactive efforts to shift mindsets and seize opportunities, the risk of SMEs being eliminated from the globalized economy is unavoidable.
According to statistics, Hai Phong has more than 23,000 active enterprises, with over 90% being SMEs. Despite consistently ranking among the top provinces in Vietnam in attracting FDI, these SMEs still struggle to become part of the global supply chain.
A significant issue is the limited production space available, making it difficult for businesses to scale up. In addition, outdated technology, lack of skilled labor, and limited access to financing remain major barriers for many local SMEs.
Mr. Pham Quang Viet, Director of Sao Viet Duct Manufacturing and Trading Co., Ltd., stated: “Even though Hai Phong has many large FDI enterprises, we haven’t been able to connect directly with them for product consultation or quoting. Most of our product supply comes from investment contractors who already know us through long-standing market presence. We hope the city will soon have specific land-use plans so we can stabilize and expand production. We also need access to favorable loan policies. Otherwise, relying solely on our accumulated internal capital is very slow.”
Mr. Bui Ngoc Hai, Deputy Head of Hai Phong Economic Zone Authority, noted: “The spillover effect from FDI companies to domestic businesses remains very limited. Participation in global value chains by local enterprises is still restricted. Outside of basic services like transport, electricity, and water, the supporting industries are still a weak point.”
Supporting Businesses
As Vietnam—especially Hai Phong—continues to deepen its integration into the global economy through 19 bilateral and multilateral Free Trade Agreements (FTAs), increasingly strict requirements for import-export goods call for Hai Phong’s SMEs to be well-prepared to overcome challenges and seize opportunities.
Mr. Nguyen Huu Mien, Chairman and CEO of Ha Long Seafood Export and Processing JSC, shared: “Integration into FTAs is a huge opportunity for seafood enterprises. We not only use domestic raw materials but also source internationally, allowing us to import, process, and then re-export value-added products. FTAs give us access to stable raw materials, good processing technology, and enable our products to reach global markets and compete with imports in Vietnam.”
Joining global supply chains is a great opportunity for Hai Phong SMEs to grow and enhance their competitiveness. However, success requires close cooperation between stakeholders: local government, large enterprises, and SMEs themselves.
In addition, both the central and Hai Phong city governments need clear criteria for selecting foreign investors—avoiding those whose practices may conflict with domestic business interests. Increasing linkages between domestic firms and FDI enterprises is essential. Particularly, large-scale domestic enterprises should play a leading role in technology and infrastructure to help support industries and SMEs rise.
Mr. Ou Yang Peng Fei, Deputy General Director of Regina Miracle International Vietnam Co., Ltd., said: “Hai Phong regularly organizes connection events between domestic supporting industry businesses, service providers, and universities. These initiatives help companies better understand each other's capabilities and can lead to future cooperation. Regina is now part of a supply chain involving many local suppliers for materials and services.”
Mr. Nguyen Van Loan, Vice Chairman of Hai Phong SME Association, stated: “To participate deeply in global supply chains, SMEs must fully understand the importance of clusters and supply chain integration. They must innovate technology and workforce, build business strategies, and enhance production capacity and competitiveness. They also need better foreign language skills, improved marketing, and strict compliance with international production standards.”
“The association has proposed several initiatives to the city to support SMEs in global value chain participation—especially digital transformation. We also regularly organize training programs to improve management and workforce skills, while promoting trade activities to help Hai Phong enterprises seek cooperation and supply opportunities,” Mr. Loan added.