Vietnam – a beautiful country in Southeast Asia, is not only known for its beauty, tourism and delicious food, but it has become the country of choice for companies seeking low costs, high quality and proximity to existing Asian based supply chains. With 92 million citizens, a thriving middle class and an abundant workforce with competitive labor costs, Vietnam has enjoyed being one of the hottest destinations for manufacturing.
In fact, according to recent data, Vietnam’s total exports for 2016 is expected to be $178 billion. The USA accounted for 48% of Vietnam’s total textile exports, followed by Japan (12%), Korea (9%), Germany, UK and China with 3% for each country
Here’s why Vietnam is a destination of choice for manufacturing:
1. Location: Vietnam is centrally located in Southeast Asia, with close proximity to existing Asian based supply chains and regional shipping routes.
2. Booming Sectors: Here’s a breakdown on the booming sectors in Vietnam
- Textile and garment production – 2015 this sector employed 2.5 million people across over 6,000 factories.
- Automotive manufacturing and shipbuilding
- Electronics - $1.6B during the first two months of 2016 (30% of total exports in 2015 came from electronics). In Southern Vietnam, HCMC’s Hi-Tech park is home to manufacturing facilities of companies such as Intel, Samsung and Jabil.
3. Labor Costs: Vietnam has low labor costs and a growing consumer market.
- Singapore: $706.50
- Indonesia: $199.80
- Vietnam: $190
- Cambodia: $140
- Myanmar: $99
- China: $650
4. Favorable political environment: While Vietnam has a Communist government, in recent years it has eased restriction on foreign investment and has implemented incentives, such as the manufacturing of high tech products, R&D, knowledge based services, process and manufacturing and infrastructure projects.
Timroon currently does 95% of its manufacturing in Vietnam. We have offices and a full team in Ho Chi Minh City. Contact us today if you're interested in learning more about manufacturing in Vietnam!