Vietnam soars in global supply chains on favourable conditions: Counterpoint

Inside a factory at the Binh Xuyen II industrial park in the northern province of Vinh Phuc (Photo: VNA)

Hanoi (VNA) – In an era of protectionism where thejitters of COVID-19 are still being felt by many economies, Vietnam is soaringto become one of the prime locations for export manufacturers, said a recentarticle published on the Hong Kong-based global industry analysis firm Counterpoint.

According to the article, titled “Vietnam soars in globalsupply chains on favourable conditions”, with more companies moving theiroperations to Vietnam, the leasing demand in the country’s industrial zones issoaring.

Vietnam’s growing competitiveness, market reforms, and steady progress in easeof doing business (evident in its higher scores in the World Economic Forum’scompetitiveness index) are making it rise above the rest.

The article said the Vietnamese electronics manufacturingservices (EMS) market will grow at a compound annual growth rate (CAGR) of 5percent between 2020 and 2026.

It also cited data from the Vietnam’s General StatisticsOffice (GSO). Accordingly, the country’s consumer electronics sector recordedits highest ever production at 369.6 million units in October 2020, followed bythe electronic components sector at 325.7 million units.

Given the exponential growth in its manufacturing sectoralong with growing domestic demand and exports, primarily in electronics andautomobiles, the EMS business is projected to scale new heights in the country.Many global original equipment manufacturers (OEMs) and EMS providers likeSamsung, LG and Foxconn are investing in the production of printed circuitboards, camera modules, printers, servers, phones, networking equipment,televisions and other electronics equipment in the country.

The author mentioned Samsung, one of the largest FDI playersin the country, noting that Vietnam has one of the company’s largest smartphoneproduction bases outside the Republic of Korea. By 2022, Samsung is alsoprojected to complete its 220-million-USD research and development centre inVietnam.

The article highlighted that constant improvement ininvestment and business policies, participation in bilateral and multilateralfree trade agreements, increased FDI and a favourable geographical location haveall been active factors in making Vietnam an attractive destination formanufacturers./.

VNA