Vietnam ranks first in the production of footwear
Major multinationals (MNCs) like Nike, Adidas, Foxconn, Intel, Samsung, and others have been growing their operations in Vietnam, demonstrating that the business and investment climate in the country is still stable and has room for expansion.
The key advantages for Vietnam to attract those giants include cheap labor and strong growth potential.
Recently, CNBC quoted Nike’s financial report as saying that in 2021, Vietnam’s shoe production for Nike will account for 51% of its global output, while this proportion is in China dropped to 21%. In 2006, China made Nike shoes, accounting for 35% of the company’s global output. Thus, Vietnam has officially surpassed China, becoming the largest producer of Nike footwear.
Chinese media reported that Nike is not the only company with a large number of products manufactured in Vietnam. Even its rival, Adidas, is moving in a similar direction, with 40% of its footwear produced in Vietnam. In fact, despite being impacted by the Covid-19, Nike manufacturing in Vietnam were able to resume regular operations by the end of 2021.
Nike leaders in Vietnam also said that with the strategy of safe living with the epidemic and high vaccine coverage in Vietnam, the company still believes and is optimistic with the supply chain is no longer interrupted. Nike leaders in Vietnam also said that with the strategy of safe living with the epidemic and high vaccine coverage in Vietnam, the company still believes and is optimistic with the supply chain is no longer interrupted.
Many corporations boost production in Vietnam
Not only Nike or Adidas have expanded their operations in Vietnam, but also in the past 2 years, many FDI enterprises have moved production or expanded investment to Vietnam. Right from the beginning of 2021, Foxconn Technology Group (Taiwan), the world’s largest contract electronics manufacturer, entered Bac Giang province with the Fukang Technology factory project. This project specializes in manufacturing tablets and laptops with a capacity of about 8 million products per year, with a total registered investment capital of 270 million USD. Previously, all iPad products were assembled in China, and so Foxconn’s move to Vietnam at Apple’s request marked the first time iPads were manufactured outside of China. By the end of 2020, this group had invested 1.5 billion USD in Vietnam and employed 53,000 employees.
In 2021, Foxconn expands to recruit 10,000 more workers in Vietnam and invests an additional 700 million USD. Rivals of this enterprise such as Pegatron and Wistron also decided to expand production in Vietnam. Specifically, in September 2020, Pegatron invested 1 billion USD in an electronic equipment manufacturing facility in Hai Phong.
A growing number of global corporations are trying to establish industrial facilities in Vietnam. Some even consider Vietnam to be a “shining star” of supply chains in the Asia-Pacific region.
In recent years, a trend has emerged in which big corporations have moved their manufacturing and commercial operations to Vietnam. Hanwa (Korea) has moved to Hanoi; Yokowo (Japan) relocated to Ha Nam; Huafu (China) for textiles has relocated to Long An.
Many other corporations such as Sharp, Nintendo and Komatsu from Japan, Lenovo from Hong Kong have announced plans to move to or expand production in Vietnam. In 2021, the largest foreign investment project in Vietnam with the most notable expansion is LG (Korea) pouring an additional 1.4 billion USD, bringing the total investment capital in Hai Phong to 4.65 billion USD. become the largest FDI project in this locality.
According to the Financial Times, this trend will continue to gain traction, with more global corporations wanting to establish manufacturing operations in Vietnam.
Source: https://e.vnexpress.net/news/business/economy/global-manufacturing-giants-expand-vietnam-presence-4413765.html
