TNCs eye Vietnam’s prospects

Nguyen Mai

More than 15,000 businesses from over 100 countries and territories have made forays into Vietnam over the past 30 years. Most of these companies are of small and medium size, averaging $5-6 million in investment capital each. Thousands of trans-national companies have also dropped anchor in Vietnam, with sizable projects in all sectors. Nguyen Mai, a prominent economist and leading foreign direct investment expert, sheds some light on these foreign invested firms’ performance and their impacts on Vietnam’s economy. A snapshot of foreign direct investment in Vietnam In the first three years (1988-1990) after the Law on Foreign Investment in Vietnam was adopted by the National Assembly in December 1987, Vietnam welcomed its first foreign direct investment (FDI) projects, most of which were miniscule in size. By 1998, a number of trans-national companies (TNCs) had made their presence in the country. The first pioneers included British group BP, France’s Total, … [Read more...]

Almost all Samsung IT employees in Vietnam

Minister of Information and Communications Truong Minh Tuan and Samsung CEO Shin Jong Kyun.

Some 130,000 of Samsung’s 150,000 information technology (IT) and mobile telecommunications (IM) employees, or 86.6 per cent, are working in Vietnam, Mr. Shin Jong Kyun, CEO of Samsung, told Minister of Information and Communications Truong Minh Tuan during their meeting in Hanoi on May 6. He added that, of the 130,000, nearly 120,000 are Vietnamese at the electronic giant’s three IT complexes in Vietnam: Samsung Electronics Vietnam in northern Bac Ninh province, Samsung Electronics Vietnam Thai Nguyen (SEVT) in northern Thai Nguyen province, and the Samsung CE Complex in Ho Chi Minh City. The three complexes have combined investment capital of $10 billion. It also employs nearly 1,500 technicians at the Samsung Vietnam Mobile R&D center in Hanoi, which is expected to employ 5,000 staff in the near future. Samsung Vietnam’s turnover in 2015 reached $32 billion. According to Mr. Shin, the Bac Ninh and Thai Nguyen complexes are to turn out 200 million … [Read more...]

Korea nudges out rivals in electronics

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Korean tech giants like Samsung and LG Display are rapidly replacing Japanese firms in electronics production of TVs and other consumer electronic goods in Vietnam. One of South Korea’s leading manufacturers of electronic displays, LG Display, started construction on its $1.5 billion hi-tech screen (OLED) production factory in the northern port city of Haiphong’s Trang Due industrial park late last week. The project will churn out OLED screens for smartphones, iPads, watches, TVs, and automobiles, with the factory’s $1.5 billion in investment capital to be disbursed between 2015 and 2028. Other huge Korean firms also see Vietnam as a hot investment destination, highlighting it as part of the electronics sector’s global supply chain by pouring billions of dollars into the country. For instance, Samsung entered Vietnam in 1996 and currently has three major manufacturing complexes in the country: the Samsung Vina Electronics facility in Ho Chi Minh City, the … [Read more...]

Vietnam misses many opportunities from WTO membership

A worker at Samsung Vietnam (Photo: SGGP)

Vietnam’s World Trade Organization (WTO) membership has brought basic changes in the country’s legal framework, economic and commercial policies and institutions and management mode. However the country has missed many opportunities and failed to meet expectations from the integration. Gross domestic product (GDP) growth rate reached 7 percent a year during the phase of 2006-2010 and 5.88 percent in the next five years, high in the world but still low compared to expectations in Vietnam during the integration phase. Agriculture has been negatively affected. Average growth rate in this field was 3.4 percent per year in the phase of 2007-2011 and 3.1 percent during the next five year phase. The rate continued dropping to 2.21 percent in 2015, lower compared to 4 percent during 2001-2006 when Vietnam was not a member of WTO. Export - import structure has showed problems. Key export fields include those using natural resources, agriculture and labor intensive processing … [Read more...]

Swing for the Kids 2016 crowns 10 years of success

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The Swing for the Kids' gala dinner has just opened at BRG Group’s Legend Hill Golf Resort, to announce the winners and host a charity auction. Accordingly, the best gross at Swing for the Kids 2016 was Le Minh Hoan with a score of 74. The winners of groups A, B, and C were Le Trung Hieu, Trinh Huu Thang, and Ho Kien Trung, with the total scores of 69, 71, and 72, respectively. Former Minister of Planning and Investment Bui Quang Minh was granted the third prize in Group B with the total score of 72. The winners of each group received a voucher to stay at Ho Tram Strip Resort, a golf voucher at Indochina Hoi An golf course, and a one-year subscription to VIR. The first runners-up received a voucher for staying at FLC Resort and a one-year subscription to VIR. Lastly, the second runner-ups received a golf voucher at Ho Tram Strip golf course and a one-year subscription to VIR. "Our biggest prize today is worth about VND1.5 billion ($67,300), which will be granted to over … [Read more...]

Swing for the Kids 2016’s winners announced

Bui Quang Vinh - Former Minister of Planning and Investment   I really like playing golf but I did not have time when I was the minister. But now when I have more free time, I will spend more on this sport. Golf is very good for health, and it's much better to couple golf with learning promotion. That's what Swing for the Kids is doing well.

Swing for the Kids’ gala dinner has just opened at BRG Group’s Legend Hill Golf Resort to announce the winners and host a charity auction. Accordingly, the best gross of Swing for the Kids 2016 is Le Minh Hoan, who scored 74. The winners of groups A, B, and C were Le Trung hieu, Trinh Huu Thang, and Ho Kien Trung with the total score of 69, 71, and 72 respectively. Former Minister of Planning and Investment Bui Quang Minh was granted the third prize of Group B with the total score of 72. The winner of each division received a voucher for staying at Ho Tram Strip resort, a golf voucher at Indochina Hoian golf course, and a one-year subscription to VIR. The first runners received a voucher for staying at FLC resort and a one-year subscription to VIR. Lastly, the second runners received a golf voucher at Ho Tram Strip golf course and a one-year subscription to VIR. "Our biggest prize today is worth about VND1.5 billion ($67,300), which will be granted to over 3,000 … [Read more...]

Authorities support Samsung’s $300 million R&D centre proposal

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The Ministry of Planning and Investment and other relevant ministries, as well as the authorities of Hanoi have basically agreed to Samsung Electronics Vietnam (SEV)’s asking for incentives for developing its $300 million research and development (R&D) centre in the capital, according to newswire Viettimes.vn illustration photo source internet According to the Hanoi People’s Committee, the R&D centre will contribute to the city’s socio-economic development and promote the electronic, telecommunications, and supporting industries. Furthermore, it is expected to help the city attract more FDI capital and create approximately 4,000 jobs. Samsung Electronics Vietnam Thai Nguyen (SEVT) as well as SEV are two foreign invested projects receiving the best available preferential incentives in Vietnam. However, foreign investors in general and Samsung in particular must meet the criteria imposed on high-tech enterprises by Vietnam’s Law on Investment, in areas … [Read more...]

Vietnam’s exports too reliant on Samsung

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VietNamNet Bridge - Vietnam’s economy has been heavily relying on Samsung, whose export turnover accounts for a large proportion of Vietnam’s total export revenue. Thoi Bao Kinh Te Saigon has quoted a report reviewing the implementation of the National Assembly’s Resolution on socio-economic development in 2015 and 2011-2015, showing that the trade deficit in 2011-2015 was equal to 1.93 percent of total export turnover. The report also pointed out that it was the foreign invested enterprises (FIEs) which deserved credit for the reduced trade deficit. Of FIEs, Samsung is a well-known name with the export value always higher than the import turnover. The South Korean investor’s factories in Vietnam saw a trade surplus soaring from $6.5 billion in 2013 to $11.1 billion in 2015. The big exports have greatly helped improve the macroeconomic balance. Vietnam’s economy has been heavily relying on Samsung, whose export turnover accounts for a large … [Read more...]

Reform or lag behind: Vietnam 2035 report

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VietNamNet Bridge - The strong message the economists – the authors of the Vietnam 2035 Report – want to convey is that Vietnam needs to carry out reform, or it will lag behind, according to Pham Chi Lan, a renowned economist, a member of the report preparation team. Lan said the economists tested economic models and found that if Vietnam carries out institutional reform and increases productivity, it would obtain income per capita of $7,000 per annum, or $18,000 if considering purchase power parity. But if Vietnam does not carry out reform, its income per capita by 2035 would be $4,500 per annum at maximum, or $12,000 if considering the purchase power parity. Lan emphasized that If the country tried to gain a global higher average income level at over $7,000 per annum, or $15,000-18,000 if considering purchase power parity by 2035, Vietnam has no other choice than improving its productivity. "If the productivity cannot be higher, we will surely not have this level … [Read more...]

VN SMEs eager to join global supply chains

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VietNamNet Bridge – More and more local small and medium-sized enterprises are aiming to join the global supply chains of multinational corporations. On a winter’s day a month ago, Mr. Hoang Gia Hung, Chairman of the Viet Hung Packaging Company, welcomed an important guest at his factory. The man was Mr. Han Myoung Sup, Executive Vice President and President of Global Strategy & Operations Vietnam, who is in charge of all of Samsung’s business operations in Vietnam. There was no tea or coffee and no formal welcome in a reception room. As soon as he arrived Mr. Han went directly to the factory and warehouse where Viet Hung’s employees were hard at work. He took a look around the factory and examined production lines while listening to Mr. Hung explaining the production steps and management methods applied by the company. It was a very important day for Mr. Hung, who was trying to persuade Mr. Han that his company was qualified to be a first vendor of … [Read more...]

HCM City: Samsung’s hi-tech project gets additional $600 mln

Chairman of the municipal People’s Committee Nguyen Thanh Phong (R) grants a licence for the investment adjustment.

The Samsung group will add 600 million USD to the 1.4-billion-USD Samsung HCMC CE Complex (SEHC) at Ho Chi Minh City-based Saigon Hi-tech Park (SHTP). Chairman of the municipal People’s Committee Nguyen Thanh Phong granted a licence for the investment adjustment for the Republic of Korea ’s conglomerate on December 29. The extra investment will be allocated to the building of an electronic test laboratory and a warranty facility within the 70-hectare complex. According to Chairman Phong, the project is forecast to contribute about 20 percent of the city’s export value and facilitate the development of support industries, domestic supply chain and local human resources. Once operational, it will also help increase local content in the city’s hi-tech products, he said. Samsung has vowed to raise local content of its made in Vietnam products to 35 percent before 2020. The first phase of the SEHC project has been completed, including the construction of … [Read more...]

Samsung expands CE Complex by $600 million

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On December 29, the Management Board of Saigon High-Tech Park (SHTP) approved Samsung’s plan to expand its existing $1.4 billion Samsung Electronics Ho Chi Minh City Complex (SEHC) by more than $600 million, increasing the complex’s total investment capital to over $2 billion. Licensed in September 2014, the construction of the complex was started in May 2015 and is expected to come into operation in February 2016. The factory is currently in the final stages of construction and installation of machinery and equipment. SEHC, covering an area of 70 hectares inside SHTP, will focus on research and development as well as the production of high-end TV products, such as SUHD TVs, Smart TVs and LED TVs, besides other consumer electronics products, during its first phase of operation. In the second phase, the complex will produce washing machines, fridges, vacuums, and other electronic home appliances, mostly for export purposes. Furthermore, SEHC will set up a research and … [Read more...]

Locals link to Samsung’s chain

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Local businesses are enjoying bigger opportunities to join the global production and supply chain via collaboration with South Korea’s electronic giant Samsung Group. Samsung has raised the production processes at local firms to meet global standards Photo: Le Toan Nguyen Van Hung, director of Ho Chi Minh City-based An Phu Viet Trading & Production Plastics Limited, was confident about the prospect of becoming a supplier for Samsung. "We aim to become a first-tier supplier to Samsung in the near future through the delivery of assorted battery chargers for Samsung smartphones," Hung said. Three months ago, An Phu Viet and other local firms joined a seminar on the development of Vietnam’s supporting industries which Samsung organised to seek local suppliers. An Phu Viet and three other local firms - Thang Long Packaging Production Export-Import, Viet Hung Packaging, and Chien Thang Industrial were selected by Samsung as beneficiaries of this group’s … [Read more...]

S Pen for Galaxy Note: work bearing the stamp of Vietnamese engineers

S Pen, the stylus for Samsung’s Galaxy Note series, was created with the significant contribution of Vietnamese engineers.

VietNamNet Bridge - S Pen, the stylus for Samsung’s Galaxy Note series, was created with the significant contribution of Vietnamese engineers. Do Duc Dung, head of SVMC’s (Samsung Vietnam Mobile Research & Development Center) project management division, confirmed that Vietnamese engineers joined forces to design the software of S Pen. S Pen is a hardware device and needs a software framework which helps regulate the stylus. The framework is not only reserved for Samsung’s apps, but also for third parties’ apps. And SVMC was assigned by Samsung to create the framework. There were two difficult tasks SVMC had to fulfill. First, it had to ensure the high quality of the work. "Every house needs a firm foundation on which to stand," Dung said. Vietnam would be able to approach high technologies when it integrates more deeply with the world. Second, it had to follow a strict product launching schedule. Every time the Note is marketed, the framework must … [Read more...]

Vietnamese workforce has much to do to prep for AEC

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While hopes are high that the coming ASEAN Economic Community (AEC) will bring opportunities to Vietnamese labour, the country's workforce still has a lot of work to do to take advantage of them. The AEC, which is expected to create 14 million new jobs in the region, would allow the free flow of skilled labours in eight occupations - including architects, engineers, surveyors, medical doctors, dentists, nurses, accountants and tourism professionals. A recent survey suggests Vietnamese workers may overestimate their own skills. Recruitment firm Vietnam Works surveyed 2,500 professionals from companies of all sizes across the country and found that up to 92% see the establishment of the AEC as a good opportunity to develop their careers. About 70% think Vietnamese professionals have enough skills to compete with foreign counterparts. Phu Huynh, a labour economist from the Bangkok-based office of the International Labour Organisation (ILO), said Vietnam's perception of its … [Read more...]

Samsung R&D center hitting stride

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The Samsung Vietnam Mobile Research and Development Centre (SVMC) in Hanoi has contributed around 10 percent of software market share used in Samsung's smart phones and tablets globally. The SVMC has implemented about 360 projects of which 40 are globally used solutions while the remaining commercialized software projects belonged to the center. Do Duc Dung, Head of the SVMC's project management office told media on December 2 that SVMC is the largest Research and Development (R&D) center in the Southeast Asian region. Samsung has 25 R&D centers specializing in research for its phones worldwide. Established in February 2012, the center has provided software for Samsung's smart phones and LTE network suppliers in the Southeast Asian region, Australia and New Zealand. Over the past eight years, Vietnam has become the group's largest production location as its total committed investment is up to 14.2 billion USD poured into Bac Ninh, Thai Nguyen provinces and HCM City. In … [Read more...]

Samsung R&D centre hitting stride

HA NOI (VNS) — The Samsung Vietnam Mobile Research and Development Centre (SVMC) in Ha Noi has contributed around 10 per cent of software market share used in Samsung's smart phones and tablets globally. The SVMC has implemented about 360 projects of which 40 are globally used solutions while the remaining commercialised software projects belonged to the centre. Do Duc Dung, head of the SVMC's project management office told media yesterday that SVMC is the largest Research and Development (R&D) centre in the Southeast Asian region. Samsung has 25 R&D centres specialising in research for its phones worldwide. Established in February 2012, the centre has provided software for Samsung's smart phones and LTE network suppliers in the Southeast Asian region, Australia and New Zealand. Over the past eight years, Viet Nam has become the group's largest production location as its total committed investment is up to US$14.2 billion poured into Bac Ninh, Thai Nguyen provinces … [Read more...]

Attractive Destination for Foreign Electronics Investors

The electronics industry has topped the country’s exports by value since 2013, with annual value in excess of US$30 billion. In the coming time, the Vietnamese electronics industry is also a destination for big foreign investors.

Magnet to FDI flows According to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, the irresistible appeal of the Vietnamese electronics industry comes from world-acclaimed names like Samsung, Foxconn, LG, Panasonic and Intel among others with mammoth production projects in the country. Remarkably, many localities have sought out ways to lure foreign investors. Specifically, immediately after the Samsung production facility in Thai Nguyen province came into operation, supporting investors also arrived in the province. A huge sum of money has been invested by electronic component manufacturers in Thai Nguyen province and Hai Phong City. And, of course, most of component production factories are invested by foreign investors. Besides, one of golden addresses of FDI flows in the northern region is Vinh Phuc province. According to experts, Vinh Phuc is successful in both quality and quantity of foreign-invested electronics investment. In October alone, … [Read more...]

Government eyes diversified exports

Illustrative image - Source: VNA

Vietnam will reform the structure of export goods and increase quality of export products to strive for sustainable exports and increase its value by this year-end and beyond. The Ministry of Industry and Trade (MoIT) said that Vietnam could achieve its export value target of 165 billion USD for this year, an increase of 10 percent against last year, but the ministry has recognised that the nation has unreasonable structure of export products. For example, the export value of mobile phones of Samsung Vietnam alone occupied up to 20 percent of the total national export value, Tin tuc (News) newspaper quoted Deputy Head of MoIT's Export Import Department Tran Thanh Hai as saying. In fact, Vietnam's structure of export products lacked balance because they are mainly manufactured by foreign direct investment (FDI) enterprises which account for two-thirds of the total export volume. Therefore, Hai said, besides improving the export of local enterprises, Vietnam should diversify its … [Read more...]

Vietnam’s electronics industry attracts $10bn FDI inflow: ministry

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Vietnam’s electronics industry has so far this year attracted US$10 billion worth of direct foreign investment from giant global electronics firms, including Samsung, Foxconn, LG, Panasonic, and Intel, according to the Foreign Investment Agency under the Ministry of Planning and Investment. The attractiveness of Vietnam's electronics industry can be seen at two large-scale mobile phone plants of Samsung in the northern region. While the $2.5 billion factory in the northern province of Bac Ninh, around 30 kilometers from the capital city of Hanoi, is making feature phones, the $2 billion one in the neighboring province of Thai Nguyen is churning out smartphones, laptops, smart TVs and medical equipment. The southern economic hub of Ho Chi Minh City is also home to a $1 billion Samsung plant which focuses on research and development and the production of high-end TV brands such as SUHD TV, Smart TV and LED TV. The spillover created by those foreign-owned electronics … [Read more...]