In an era of protectionism where the jitters of COVID-19 are still being felt by many economies, Vietnam is soaring to become one of the prime locations for export manufacturers, said a recent article published on the Hong Kong-based global industry analysis firm Counterpoint.
Inside a factory at the Binh Xuyen II industrial park in the northern province of Vinh Phuc (Photo: VNA) – In an era of protectionism where the
jitters of COVID-19 are still being felt by many economies, Vietnam is soaring
to become one of the prime locations for export manufacturers, said a recent
article published on the Hong Kong-based global industry analysis firm Counterpoint.
According to the article, titled “Vietnam soars in global
supply chains on favourable conditions”, with more companies moving their
operations to Vietnam, the leasing demand in the country’s industrial zones is
soaring.
Vietnam’s growing competitiveness, market reforms, and steady progress in ease
of doing business (evident in its higher scores in the World Economic Forum’s
competitiveness index) are making it rise above the rest.
The article said the Vietnamese electronics manufacturing
services (EMS) market will grow at a compound annual growth rate (CAGR) of 5
percent between 2020 and 2026.
It also cited data from the Vietnam’s General Statistics
Office (GSO). Accordingly, the country’s consumer electronics sector recorded
its highest ever production at 369.6 million units in October 2020, followed by
the electronic components sector at 325.7 million units.
Given the exponential growth in its manufacturing sector
along with growing domestic demand and exports, primarily in electronics and
automobiles, the EMS business is projected to scale new heights in the country.
Many global original equipment manufacturers (OEMs) and EMS providers like
Samsung, LG and Foxconn are investing in the production of printed circuit
boards, camera modules, printers, servers, phones, networking equipment,
televisions and other electronics equipment in the country.
The author mentioned Samsung, one of the largest FDI players
in the country, noting that Vietnam has one of the company’s largest smartphone
production bases outside the Republic of Korea. By 2022, Samsung is also
projected to complete its 220-million-USD research and development centre in
Vietnam.
The article highlighted that constant improvement in
investment and business policies, participation in bilateral and multilateral
free trade agreements, increased FDI and a favourable geographical location have
all been active factors in making Vietnam an attractive destination for
manufacturers./.