Viet Nam Reports High Export Turnover from FDI in 2014, More Foreign Players Expected to Venture In Soon
A latest report released by the Viet Nam Electronic Industries Association states that the highest share in the country’s total export incomes came from foreign direct investment (FDI). This is an interesting revelation considering that FDI enterprises comprise only about a third of all electronics enterprises in Viet Nam. The country has made rapid progress in the electronics industry, which has largely been propelled by initiatives to attract more foreign investors, a report in a leading newspaper in the country quoted the Association’s chairman as saying
Turnover from the exports of telephones and auxiliary components from Vietnam stood at US$24.1 billion in 2014, marking an increase of 13.4% as compared to the previous year. Remarkably, within the FDI sector, the total expert turnover from telephones and space components stood at a staggering 99.6%. Likewise, the values of computers, exported electronics and spare parts in 2014 approximated US$11.6 billion. About 98.8% of this turnover can be traced back to the FDI sector.
Companies that have contributed to a lion’s share of the total export turnover are: Samsung Electronics (which has multiple factories in Viet Nam), Morips Vina, KSD Vina Company, and Orientech Vina. In the meanwhile, there have been reports that other leading companies such as LG and Canon are also vying to capitalize on the opportunities that exist in Viet Nam and are pumping in more investment dollars into the country.
These developments could easily turn Viet Nam into one of the leading mobile phone manufacturing countries in the world. The country is also a leading base for printer manufacturing and photocopy machines. With the projected expansion in the size of the electronics industry in Viet Nam, component manufacturers will be compelled to beef up their investments here.
But this also raises questions about the domestic manufacturers in Viet Nam will be able to cope with the influx of global players. Finally, with import taxes being high, the electronics industry in Viet Nam may not get the launch pad it is looking for.