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


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...]

Electronics sector attractive to foreign backers

Employees at Korean invested Bluecom Vina Ltd work on a electronics chain in Trang Due Industrial Zone in Hai Phong. — VNA/VNS Photo Danh Lam

Vietnam's electronic industry has attracted US$10 billion in foreign direct investment (FDI) capital from big names like Samsung, Foxconn, LG, Panasonic and Intel, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI). With the largest turnover and market share growth of electronic exports in ASEAN, Vietnam has grown to become the 12th largest electronics exporter in the world and the third largest in ASEAN. Vietnam's electronics output ranked behind Thailand, Singapore and Malaysia in 2013. Production bases have been shifting to Vietnam in recent years to take advantage of preferential tax deals under free trade agreements such as the TPP and AEC. Accordingly, the rules of origin force investors who want to take advantage to further access ASEAN or TPP member markets to invest in Vietnam more intensively and transfer technology to achieve a higher localisation rate. Attractive areas in Vietnam's electronics industry are large-scale … [Read more...]

Samsung’s requests for tax incentives rejected


VietNamNet Bridge - Samsung Electronics Vietnam, the foreign investor which many economists say has been "overindulged in’ by Vietnamese state management agencies, has once again asked for tax incentives. According to the Ministry of Finance (MOF), Samsung has asked for preferences in corporate income tax. It wants a 10 percent preferential tax rate for 30 years for ongoing projects. As for an investment project in Bac Ninh province, Samsung Vietnam has asked for the preferential tax rate of 10 percent for the life of the project, a 4-year tax exemption and 50 percent tax cut in the next nine years. In reply, MOF said the requested tax incentives will go beyond the tax incentives frame set by the government of Vietnam. An MOF official cited current laws as saying that in some cases, investors can ask for the extension of the preferential tax application, provided that they can satisfy some requirements: their products have high competitiveness worldwide; their revenue is … [Read more...]

Multi-national groups fleeing from China, heading for Vietnam


VietNamNet Bridge - Samsung, LG and Intel have injected more money into Vietnam. Some multinational conglomerates are considering relocating their global production bases to Vietnam. Others are planning to set up factories in Vietnam. In early August 2015, Samsung Vietnam unexpectedly announced the project on expanding its factory in Bac Ninh province worth $3 billion. The move will raise the South Korean investor’s total investment in the ‘tech town’ of Bac Ninh to $7.5 billion. As such, with two production complexes in Bac Ninh and Thai Nguyen provinces, Vietnam now acts as Samsung’s largest production base in the globe, where 30 percent of the group’s mobile phones are made. The total investment capital in Vietnam committed by Samsung has climbed to $14 billion, while the group now employs 110,000 workers. It reported total turnover of $26.3 billion by the end of 2014, while the figure is expected to surge to $30 billion by the end of 2015. The … [Read more...]

Vietnamese engineers design software used worldwide

Paul Smith, president of Harvey Nash at VNITO 2015

VietNamNet Bridge - Large international hi-tech conglomerates say that Vietnamese engineers have become involved more deeply in the implementation of big outsourcing projects. "Vietnam Engineers Drive the World" was the sentence used in the presentation by Paul Smith, president of Harvey Nash, a headhunter outsourcing service provider at 2015 VNITO, the Vietnam IT Conference. Vietnamese engineers play a role in many big projects which target millions of users. Four million students in the UK are managed by a software product developed by Vietnamese. More than 1 million healthcare workers now use the apps developed by Vietnamese engineers to minimize medical errors, increase the quality of patient care and enhance performance. More than 20 mobile phone users in the US make calls with software written by Vietnamese. About 400,000 Ford car drivers monitor their cars with a mobile app programmed by Vietnamese. And 200 million Google users use image tagging software provided by … [Read more...]

Public disagrees with MOIT on calling Samsung products ‘Vietnamese’


VietNamNet Bridge - The statement that products made by Samsung Vietnam are ‘Vietnamese’ has led to harsh criticism from the public.Related news MOIT says Samsung products made in Vietnam are Vietnamese goods "Foreign invested enterprises (FIEs) enjoy investment incentives in the countries where they invest, but they transfer the profits they make from investments to their home countries. Therefore, no country in the world considers FIEs as domestic enterprises," an analyst said when asked about the statement by the Ministry of Industry and Trade (MOIT) that products made by Samsung in Vietnam are ‘Vietnamese’. Economists have expressed their surprise about MOIT’s statement. "I cannot understand why MOIT says so," said Pham Chi Lan, former deputy chair of the Vietnam Chamber of Commerce and Industry (VCCI), a renowned economist, on Dat Viet. Some days ago, at a press conference held by MOIT, when asked if Samsung’s products are considered … [Read more...]

FDI jumps over 53% in nine months

​Production line at Samsung Vietnam factory in Yen Phong, Bac Ninh province. (Photo: VNA)

As many as US$17.15 billion in foreign direct investment (FDI) was poured into Vietnam in the first nine months of 2015, a year-on-year surge of 53.4%, according to the Ministry of Industry and Trade. Of the amount, about US$11.03 billion was pumped into over 1,430 newly-licensed projects, up 44.5% against the same period last year. The remaining US$6.11 billion was added to 461 operational initiatives, up 72.6%. The ministry estimated that the foreign funders have so far disbursed US$9.65 billion, up 8.4%. The significant rise in the nine-month FDI was largely owed to the entrance of several major projects in August and September. Chief among these are the US$2.4-billion Malaysian-funded Duyen Hai 2 Power Plant in Tra Vinh province, Samsung Display Vietnam with an extra US$3 billion investment in Bac Ninh province and Empire City, a US$1.2 billion real estate project invested by the United Kingdom in Ho Chi Minh City. The manufacturing and processing industry attracted the … [Read more...]

Made in Vietnam: Should Samsung be treated as a local company?


Workers at a Samsung factory in the northern province of Bac Ninh. Photo: Ngoc Son On the sidelines of a conference at the end of July, Samsung Vietnam CEO Myoung-Sup Han told the press that his company hopes to be treated as a local business soon, instead of a foreign investor. He said every year Samsung makes huge contributions to Vietnam's export revenues, and creates jobs for hundreds of thousands of Vietnamese, and that all its products are labeled as "made in Vietnam." Han's statement, despite raising a few eyebrows, did not cause any strong controversy, until recently. During a press conference to promote Vietnamese goods last Wednesday, Vo Van Quyen, who is in charge of domestic market issues at the Ministry of Industry and Trade, seemed to support Han's view. Quyen said products made by Samsung, or any other foreign companies in Vietnam, can be categorized as Vietnamese products. Many local businesses and economists simply do not like that idea. They say the electronics … [Read more...]

Samsung electronic products assembled in Vietnam are considered Vietnamese: official


Samsung electronic products, which are manufactured in Vietnam, are considered Vietnamese, a state official said at an event encouraging Vietnamese people to prioritize buying Vietnamese goods. This is what Vo Van Quyen, director of the Domestic Market Department under the Ministry of Industry and Trade answered when being asked if the Korean products should be treated as Vietnamese goods at the event in Hanoi on Wednesday, according to Infonet, a newswire under the Ministry of Information and Communications. What Samsung, and other foreign-invested firms, manufactures in Vietnamese territory can be considered "made-in-Vietnam" goods, Quyen said, citing what is regulated in a program organized six years ago to promote the use of Vietnamese products and services. This is what is written in the handbook for the program which states that all products produced and services offered inside Vietnam, except for imports, are Vietnamese products and services, he said. According to … [Read more...]

FDI projects generate little added value

Tu Hoang According to a report on Vietnam’s international integration results of the National Assembly Standing Committee’s supervision group, since Vietnam joined the World Trade Organization (WTO) in 2007, capital mobilization has kept rising and there has been a right shift in the investment structure, with a decline in State funding and a surge in private and FDI sector activities. The FDI sector made up 21.7% of last year’s total investments, above 14.9% in 2005 and 16.2% in 2006, or one year before Vietnam became a WTO member. The 2007-2009 period saw a boom in FDI. Registered FDI capital was US$21.35 billion in 2007, 1.78 times higher than in 2006, and US$71.7 billion in 2008, 3.36 times higher than in 2007. However, FDI approvals fell in 2009-2011 due to the impact of the world’s economic downturn before bouncing back since 2012 with US$21.9 billion registered last year. The industries with high pledged FDI by the end of last year were … [Read more...]

Samsung Vietnam rejects rumor of cellphone production relocation over tax break expiration

A representative of the electronics firm told

Samsung Vietnam has denied a rumor about its relocation of an operational mobile phone production facility from Bac Ninh Province in the northern region to a neighboring locality. Tuoi Tre (Youth) newspaper that there is no such thing as moving its existing production base to Thai Nguyen, another northern region, following the expiration of tax incentives offered by Bac Ninh. Though the revenue generated by the Bac Ninh plant, which is located in the Yen Phong Industrial Park 1, went down in the first quarter of this year, it would not be the reason for any relocation, the representative said. The main reason for the revenue decrease is that Samsung Bac Ninh is the investment stage with a large number of machines and equipment being assembled so that plant can produce premium phone lines like the Galaxy S6 and Galaxy S6 Edge with metal frames, he said. "Even though there are some fluctuations, the revenue the plant is expected to earn until the end of this year will remain … [Read more...]

Slow localization rate troubles RoK manufacturers


(VOV) -The Republic of Korea (RoK) companies Samsung and LG Electronics have expressed concern with the low localization rate of the supply chain for their operations in Vietnam, according to BusinessKorea. The Korean news service recently reported that though Samsung Electronics has been operating in Vietnam for seven years, the local component procurement stands at a low 36%. In addition, most of the companies making up the 36% are Korean-Vietnamese joint ventures doing business in the country as opposed to businesses that are owned and operated independently by Vietnamese. At present, 32 domestic companies are in the supply chain of Samsung Electronics, four (out of a total of 90) are primary partners and 28 are secondary subcontractors supplying parts via Korean invested companies. The concern by Samsung, and in particular its stockholders, is that the lower levels of local firms in the supply chain has resulted in substantially higher costs than anticipated due to increased … [Read more...]

Samsung to diversify operations in Vietnam

Van Ly At a meeting with Minister of Information and Communications Nguyen Bac Son on September 9, Samsung Vietnam general director Han Myoung-sup said after the success of Samsung Electronics, many other units of the group are seeking to invest in other sectors like energy and insurance. Han said the total workforce at the Samsung factories in the northern provinces of Bac Ninh and Thai Nguyen has exceeded 110,000. The company has also invested in a research and development center (R&D) in Hanoi with over 1,400 employees and the number is expected to grow to 5,000 in the future. Son said the ministry would support Samsung’s cooperation with partners in Vietnam and its investments in not only electronics but also in other sectors like aviation infrastructure, oil and gas, and life insurance. According to the minister, Samsung had exported a combined US$26 billion worth of products made at its electronics complexes in Bac Ninh and Thai Nguyen provinces as of July. The … [Read more...]

Samsung eyes role in Vietnam’s insurance, energy, fuel sectors


South Korean conglomerate Samsung has plans to expand its footprint in Vietnam following the notable success of its electronics business, head of the company’s Vietnamese unit said Wednesday. Other subsidiaries of the Seoul-based firm want to join the Vietnamese energy, life insurance, and oil and gas sectors, Samsung Vietnam general director Han Myoung Sup said in a meeting with Minister of Information and Communications Nguyen Bac Son in Hanoi. Those interested firms are working to turn such investment plans into reality, Han added. Samsung Electronics started its Vietnam operation in January 1995 and has since grown into the biggest foreign investor in the Southeast Asian country. In the meantime, Vietnam has also become the "biggest overseas production base" of Samsung, Dang Xuan Quang, deputy head of the Foreign Investment Agency under the Ministry of Industry and Trade, told a conference in Hanoi on July 31. The South Korean electronics behemoth operates one … [Read more...]

Samsung agrees to take domestic parts suppliers


VietNamNet Bridge - More Vietnamese manufacturers who found it difficult to become part of Samsung’s global supply chain, are becoming component suppliers for Samsung. Nhip Cau Dau Tu quotes an article published in Business Korea as saying that South Korean investors in Vietnam are worried about the slow product localization process in Vietnam, and attributed it to low technologies used by domestic enterprises. Some sources quoted in Business Korea said that Samsung has been in Vietnam for seven years, but only 36 percent of parts suppliers are from Vietnam. Most of the enterprises are foreign invested enterprises (FIEs), not Vietnamese-owned. Thirty-two enterprises owned by Vietnamese now provide components and accessories to Samsung. Only four of them are major suppliers, a modest figure compared with the total number of 90 major suppliers. The remaining 28 enterprises work as secondary subcontractors which provide components through FIEs. The slow product localization … [Read more...]

Vietnam’s exports reach 106 billion USD in 8 months

Assembling of mobile phones at a factory in Thai Nguyen of the Korean-invested Samsung Vietnam Company. (Photo: VNA)

(VOVworld) – Vietnam earned more than 106 billion USD from exports in over the past 8 months of 2015, up 9% from the same period last year. According to the General Statistics Office under the Ministry of Planning and Investment, major hard currency earners included phones and built-in components with estimated soaring turnover of 2.8 billion USD each, up 10% against last month. It’s followed by garment-textiles, electronic devices, computers and components, and footwear. The US remained Vietnam’s biggest importers, purchasing 22 billion USD in goods followed by the EU, ASEAN, China, the Republic of Korea, and Japan. … [Read more...]

Exports hit 106.3 billion USD in 8 months

Vietnam earned approximately 106.3 billion USD from exports in the past eight months of 2015, up 9 percent from the same period last year, according to the General Statistics Office under the Ministry of Planning and Investment. Assembling of mobile phones at a factory in Thai Nguyen of the Korean-invested Samsung Vietnam company - Photo: VNA The domestic sector accounted for 31.7 billion USD of the total export value, an annual drop of 2.5 percent. The remaining majority of 74.6 billion USD belonged to the foreign-invested sector, which represented a 14.7 percent soar from 2014. Major hard currency earners with soaring turnover included phones and built-in components (close to 20 billion USD), garment-textiles (15 billion USD, electronic devices, computers and components (9.9 billion USD), and footwear (8.1 billion USD). On the contrary, aquatic and rubber products as well as vehicles and spare parts experienced revenue declines between 7.1 percent and 16.6 percent compared to … [Read more...]

Why Vietnam is the most investor-friendly country in Southeast Asia

A footwear factory in Hanoi. Photo: Reuters Vietnam is the most investment worthy place in ASEAN – this is a common response of many foreign investors when being asked about their investment plan in the upcoming years. This is not an exaggeration about Vietnam’s current investment environment as well as its potentiality but is in fact based on valid and practical grounds, where improved economic diversification, international integration, reformed investment legislation and good economic policy must be counted. Economic recovery and stable development According to a recent statistics by the General Statistics Office, GDP growth of Vietnam over the first six months is quite high, at 6.28 percent. This is the highest growth for the past five years and could be far over the targeted growth for 2015. Not only the Vietnamese government is optimistic about the economic development of the country this year, other international organizations also provide positive forecast … [Read more...]