Illustrative image (Photo: VNA) Berlin (VNA) – German tape manufacturer Tesa plans to build a 55 million EUR(65 million USD) factory in Northern Vietnam in an effort to expand its productionas from 2023, according to Germany’s Handelsblatt newspaper.
Inan article published on August 13, the newspaper said the coronavirus has shownhow companies have to face risks as supply chains rely on each single country.
Therefore,Telsa is not alone in choosing Vietnam. In recent years, the Southeast Asiannation has become a popular option for companies that want to expand theirproduction network in Asia.
Thevirus is intensifying the trend, according to the article. ASEAN countries,including Vietnam, see themselves in a good position to benefit from the trend.
Thearticle cited an analysis by consultancy firm BCG as saying that Southeast Asiais moving towards the centre of globalisation.
Thetrade volume between Southeast Asia and Europe as well as the America isexpected to increase more than 20 billion USD by the end of 2023. Meanwhile,the movement of goods between Southeast Asia and China is set to expand morethan 40 billion USD.
Vietnam,which has a population of around 100 million, is said to have particularly goodprospects of taking advantage of the development.
TheInternational Monetary Fund forecast that the country can expect economicgrowth of almost 3 percent this year, the article said.
TheEU-Vietnam Free Trade Agreement (EVFTA) that has become effective since August1 is a reason that makes Vietnam more attractive to foreign investors.
The article said Marko Walde, ChiefRepresentative of the German Chamber of Industry and Commerce in Vietnam,expressed his belief that Vietnam will not only become more attractive as aninvestment destination, but will hold great importance in the development ofalternative supply chains.
Apart from Europe, Vietnam has joinedcountries such as Japan, Canada and Mexico in a free trade area with since 2018through the Comprehensive and Progressive Agreement for Trans-PacificPartnership (CPTPP). The country has also participated in the negotiations ofthe Regional Comprehensive Economic Partnership (RCEP), including China andAustralia. Another free trade agreement with the US is also under discussion.
Vietnam's openness to globalisation hashelped the country to lure numerous big corporations.
Apple moved around one third of itsproduction of wireless headphones to Vietnam. Meanwhile, Google and Microsofthave accelerated their plans to relocate part of their hardware production tothe country. As for Samsung, Vietnam has been an important production locationfor years as more than half of its phones are made in factories in the country,the article said. /.
VNA
