How Vietnam becomes a hotter-than-ever destination in the wave of global shift away from China?
Apple in June this year was reported to be moving some iPad production out of China and shifting it to Vietnam, together with other tech giants such as Google, and Microsoft, making the country a hotter-than-ever destination in the wave of global shift away from Chinese production.
Vietnam has received increasing attention from global producers as many of them are searching for alternative supply chains in the face of China’s zero Covid policy. Samsung is one of the flagship tech giants pioneering the wave of moving production to Vietnam. Recently, Samsung has just completed the construction of a US$220 million research and development center in Hanoi, its largest in Southeast Asia. Last year Samsung reported $74.2 billion sales for
its Vietnam branch, up 14 percent from 2020. They included exports of $65.5 billion, up 16%.
Disbursement of foreign direct investment (FDI) in the first nine months of 2022 hit $15.4 billion, up 16.2 % year-on-year and marking a record high, according to a report from the Foreign Investment Agency.
Besides technology, textile and garment also witnessed a strong shift away from China to Vietnam as the country continues to be an important link in the global supply chain.
Two giant brands in the global footwear industry, Nike and Adidas, have chosen Vietnam as their main production base. To date, Nike has more than 100 suppliers in Vietnam, with 96 factories concentrated in the southern region, according to Vietnam Footwear Manufacturing Industry Report 2022.
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Last year, Vietnam surpassed Bangladesh to take the world’s second position in terms of textile and garment export market share position, behind China.
Despite the difficulties of the post-Covid 19 economy, as of mid-July 2022, garment-textile was one of the four sectors posting the highest export revenue, with a record of over $20 billion, up nearly 20% year-on-year, according to The General Department of Vietnam Customs.
Vietnam has approximately 6,000 garment and textile manufacturing companies employing 2.5 million people, and its top export destinations are leading consumer markets – the US, Europe, Japan, and South Korea, according to Vietnam Textile and Apparel Association.
As a major player in global supply chain, Vietnam’s textile and garment industry is taking steps to become a more sustainable destination with a target “green textile industry”. Aurora IP, developed by Vietnam’s leading real estate developer Cat Tuong Group, is entering forward-looking initiatives.
Converging many outstanding advantages, many investors consider Aurora IP as the most preferable and potential destination in the Nam Dinh province. The development of a textile-specialized industrial park like Aurora IP is one of
the important factors contributing to the take-off of the industrial real estate market not only for Nam Dinh province, but also for the whole picture of the country.
With a total phase 1 area of about 520 hectares, Aurora IP aims to build a textile-dyeing specialized industrial park with a strategy of green – clean – sustainable development orientation, ensuring to improve the quality of life for the local community as well as a favorable working environment for experts and workers.
In addition to land leasing, Aurora IP also provides built-to-suit factory solutions which certainly boost flexibility for the investment plan of secondary investors.
Aurora IP closed deals with total investment surpassing $200 million for land lease contracts with two Asian FDI investors to develop hi-tech textile and dyeing projects, proving its attractiveness and unique value as a well-invested industrial park.
“For the past years, Vietnam has emerged as a very important supply chain node for the textile and garment industry. With the wave of shifting operations out of China, Aurora IP is considered one of the most ideal destinations for investors in the textile industry,” said Mr. Tran Quoc Viet – Chairman & CEO of Cat Tuong Group.
“At Cat Tuong Group, we have been constantly striving to become an investment destination with the best services and utilities and a model industrial park for the sustainable development of the garment and textile industry in particular and the manufacturing industry in Vietnam in general,” the Chairman added.
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