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The trend of production investment lies in the high-value goods industry

24/03/2022

Vietnam’s economy has seen strong growth in both turnover and industry structure over the years. From an economy with labour-intensive industries, Vietnam is continuing to transform into high-value industries.

Trends in development along the value chain

Vietnam’s export indicators are seeing growth despite the epidemic. The total export turnover of goods reached 212.55 billion USD, an increase of 21.2% compared to the same period last year was 80 billion USD. Of which, phones and parts have a growth of 13%, this is also the industry group with the highest export turnover accounting for 16.8%, reaching 35.7 billion USD.

In terms of growth rate, the electronics, computers and components industry group maintained growth momentum from last year, at 15.8%, corresponding to 31.3 billion USD. Remarkably, the export value of this industry group recorded a break when crossing textiles from 2019 to now. Specifically, the export turnover of textiles and footwear accounted for a smaller proportion compared to the same period last year, at 10% and 6% respectively. It can be seen that, after phones and components, the main export sector group is gradually shifting from low-value-added goods such as clothing and footwear to higher-value products such as electronics and components. In other words, Vietnam’s production-export ratio shows a change in the orientation of the industry.

In terms of foreign direct investment, the manufacturing and manufacturing industry is recording the value in 2021 accounting for 53.4% of the total capital, up 16.45% compared to the same period. Specifically, FDI investment amounted to $11.83 billion with 402 new projects approved. According to experts from Savills, considering the sector’s FDI picture over the past decade, Vietnam is developing along a value chain. In particular, the electronic equipment industry accounts for the highest share of the year at 19.29% of the total capital. Then there’s electronics and computers with 17.14%. Paper, plastic and rubber account for 14.66% and 13.54%, respectively. Meanwhile, textiles, apparel and food products only recorded less than 4% investment per sector.

Explaining this shift, John Campbell, Manager of Industrial Property, Savills Vietnam said: “Over the past 20 years, thanks to a steady growth rate, an economy moving towards export, the rise of Free Trade Agreements (FTAs), a young workforce, preferential investment policies and strategic geographical location, Vietnam has become one of the most attention-grabbing manufacturing centers in Asia. Despite a challenging 2021, Vietnam is continuing to transition from labour-intensive industries to high-value industries. Low-value industries are gradually taking shape in other parts of Southeast Asia. This is because Vietnam no longer applies preferential policies as before, so finding cheap labour and land in Vietnam becomes quite difficult. However, investors in high-value industries abroad remain optimistic about Vietnam’s long-term growth.”

The situation of the industry in the two regions is different

The North is attracting a lot of investment capital in the manufacturing sector, focusing on the electronics industry. In the first 9 months of 2021, the manufacturing sector in the North received the newest registered FDI in the country, reaching USD3.99 billion and accounting for 72.92%. In particular, electrical equipment leads the aviation industry with investment accounting for 18%. It’s followed by computers and electronics with 16 per cent. In addition, 4 out of 5 major investment projects in the Northern key economic region in the first 9 months of the year came from the high-value-added industry group. Amata Quang Ninh Industrial Park recorded more than $498 million in capital from Jinko Solar for electrical equipment. Quang Chau Industrial Park of Bac Giang was financed by two major investors, Foxconn Technology and JA Solar Investment of more than 270 million USD and more than 269 million USD, respectively. Followed by BYD Electronics with more than 269 million USD in Phu Ha Industrial Park, Phu Tho.

Meanwhile, the production situation in the southern economic region shows a different picture. Compared to the North, investment projects in the South in the first 9 months of the year have smaller capital, still concentrated mainly in the traditional manufacturing and manufacturing sectors. New registered FDI is equally allocated to the plastics and rubber, textiles, food, paper and apparel sectors, around 2-3% each.

Among the 5 largest industrial projects investing in a domain, food and beverage received the largest total investment capital with Protrade Binh Duong Industrial Park receiving $78 million from IDL Coffee Holdings and Becamex Binh Phuoc Industrial Park receiving over $36 million. Followed by metal and paper products with USD 60 million for each industry in 2 industrial zones Minh Hung, Binh Phuoc and Loc An-Binh Son, Dong Nai. Thanh Cong Industrial Park, Tay Ninh received 48 million USD for the textile and garment industry from Top Sports Textiles.

Need to focus on Industry 4.0

Commenting on the development trend of the industry, Matthew Powell, Director of Savills Hanoi, shared: “Enterprises are now focusing on improving technology and boosting production along the value chain, moving to clean production models and high-tech products to adapt to the needs of customers. Therefore, real estate developers should be aware to provide industrial parks that can meet this requirement.”

The development of commodities in the value chain will promote the modernization of Vietnam’s industry. The Central Institute for Economic Management Research (CIEM) points out that the manufacturing sector can achieve 16% growth in 4.0 strategies by 2030 if SMEs start implementing mid-level technologies. In addition, new technology could help the sector grow by $7-14 billion in the future.

To improve production capacity, businesses are integrating emerging technologies at the factory such as artificial intelligence or 3D printing. Currently, Vingroup has started using 1,200 ABB robots in some of its welding processes. KTG Industrial Joint Stock Company – a factory developer in Vietnam has started to build 4.0 factory in Dong Nai province. Their “Industry 4.0 plant” will integrate pre-constructed industrial properties with 4.0 technology – providing smarter, more innovative and more optimal solutions for tenants’ development visions.

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    3 months ago
    MTA VIETNAM

    Tham Gia Giờ Trái Đất Cùng MTA Vietnam Để Chung Tay Kiến Tạo Tương Lai
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    Là một phong trào môi trường có quy mô lớn nhất thế giới, Giờ Trái Đất đã tạo nguồn cảm hứng và thúc đẩy các cá nhân, cộng đồng, doanh nghiệp và tổ chức trên 190 quốc gia và vùng lãnh thổ hành động vì biến đổi khí hậu và mất môi trường tự nhiên. Đây cũng là sự kiện thuộc chuỗi phát triển bền vững từ Informa Markets với mong muốn tương tự. Hãy cùng MTA Vietnam tắt đèn từ 20:30-21:30 tối nay, thứ Bảy ngày 26/03/2022 và lắng nghe thông điệp hành động từ WWF toàn cầu trong Giờ Trái Đất 2022 nhé!
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    As the world's largest environmental movement, Earth Hour has inspired and motivated individuals, communities, businesses and organizations in 190 countries and territories to take action for climate change and loss of natural environment. This is also an event in the sustainable development chain from Informa Markets with the same desire. Let's turn off the lights with MTA Vietnam from 20:30-21:30 tonight, Saturday, 26/03/2022 and listen to the message from WWF during Earth Hour 2022!

    #earthhour #MTAVietnam #MTAHanoi #Manufacturing #Engineeering #MTAVietnamserries #MTAVietnamGoesHybrid #ManufacturingIndustry #MTAVietnam2022
    ...

    Tham Gia Giờ Trái Đất Cùng MTA Vietnam Để Chung Tay Kiến Tạo Tương Lai
[English below]
Là một phong trào môi trường có quy mô lớn nhất thế giới, Giờ Trái Đất đã tạo nguồn cảm hứng và thúc đẩy các cá nhân, cộng đồng, doanh nghiệp và tổ chức trên 190 quốc gia và vùng lãnh thổ hành động vì biến đổi khí hậu và mất môi trường tự nhiên. Đây cũng là sự kiện thuộc chuỗi phát triển bền vững từ Informa Markets với mong muốn tương tự. Hãy cùng MTA Vietnam tắt đèn từ 20:30-21:30 tối nay, thứ Bảy ngày 26/03/2022 và lắng nghe thông điệp hành động từ WWF toàn cầu trong Giờ Trái Đất 2022 nhé!
---------------------//
Join Earth Hour with MTA Vietnam To Shape Our Future

As the worlds largest environmental movement, Earth Hour has inspired and motivated individuals, communities, businesses and organizations in 190 countries and territories to take action for climate change and loss of natural environment. This is also an event in the sustainable development chain from Informa Markets with the same desire. Lets turn off the lights with MTA Vietnam from 20:30-21:30 tonight, Saturday, 26/03/2022 and listen to the message from WWF during Earth Hour 2022!

#earthhour #MTAVietnam #MTAHanoi  #Manufacturing #Engineeering #MTAVietnamserries #MTAVietnamGoesHybrid #ManufacturingIndustry #MTAVietnam2022
    3 months ago
    MTA VIETNAM

    MTA Vietnam 2022 Is Ready To Welcome The Return Of Our Exhibitors
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    With the latest news of ZERO QUARANTINE for international travelers entering Vietnam, MTA Vietnam 2022 is ready to welcome all of the international exhibiting companies to this year's exhibition at SECC, District 7, Ho Chi Minh City, Vietnam from 06-09/07/2022. MTA Vietnam is the leading prestigious exhibition of the engineering and manufacturing industry in Vietnam with a lot of experiences from organization to marketing promotion, promising in this return, MTA Vietnam will bring up many surprises to the community in and out of the country. Contact us to BOOK YOUR STAND NOW!
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    Với những tin tức mới nhất về việc KHỒNG CẦN CÁCH LY đối với người nhập cảnh, MTA Vietnam 2022 đã sẵn sàng để chào đón các đơn vị trưng bày quốc tế đến với triển lãm năm nay tại SECC, Quận 7, tp. Hồ Chí Minh, Việt Nam từ 06-09/07/2022. MTA Vietnam là triển lãm uy tín hàng đầu trong ngành cơ khí chế tạo tại Việt Nam với nhiều kinh nghiệm từ khâu tổ chức đến quảng bá, tin chắc rằng sự trở lại lần này của MTA Vietnam sẽ làm cho cộng đồng cơ khí chế tạo trong và ngoài nước không khỏi bất ngờ. Liên hệ với chúng tôi để ĐĂNG KÝ GIAN HÀNG NGAY HÔM NAY!

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    📍 Trung tâm Hội chợ Triển lãm Sài Gòn - SECC, 799 Nguyễn Văn Linh, Quận 7, Tp. Hồ Chí Minh, Việt Nam
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    #MTAVietnam #MTAHanoi #Manufacturing #Engineeering #MTAVietnamserries #MTAVietnamGoesHybrid #ManufacturingIndustry #MTAVietnam2022
    ...

    MTA Vietnam 2022 Is Ready To Welcome The Return Of Our Exhibitors
[Vietnamese below]
With the latest news of ZERO QUARANTINE for international travelers entering Vietnam, MTA Vietnam 2022 is ready to welcome all of the international exhibiting companies to this years exhibition at SECC, District 7, Ho Chi Minh City, Vietnam from 06-09/07/2022. MTA Vietnam is the leading prestigious exhibition of the engineering and manufacturing industry in Vietnam with a lot of experiences from organization to marketing promotion, promising in this return, MTA Vietnam will bring up many surprises to the community in and out of the country. Contact us to BOOK YOUR STAND NOW!
----------//
MTA Vietnam 2022 Đã Sẵn Sàng Chào Đón Sự Trở Lại Của Các Nhà Trưng Bày

Với những tin tức mới nhất về việc KHỒNG CẦN CÁCH LY đối với người nhập cảnh, MTA Vietnam 2022 đã sẵn sàng để chào đón các đơn vị trưng bày quốc tế đến với triển lãm năm nay tại SECC, Quận 7, tp. Hồ Chí Minh, Việt Nam từ 06-09/07/2022. MTA Vietnam là triển lãm uy tín hàng đầu trong ngành cơ khí chế tạo tại Việt Nam với nhiều kinh nghiệm từ khâu tổ chức đến quảng bá, tin chắc rằng sự trở lại lần này của MTA Vietnam sẽ làm cho cộng đồng cơ khí chế tạo trong và ngoài nước không khỏi bất ngờ. Liên hệ với chúng tôi để ĐĂNG KÝ GIAN HÀNG NGAY HÔM NAY!

MTA Vietnam 2022
⏰ 06-09.07.2022
📍 Trung tâm Hội chợ Triển lãm Sài Gòn - SECC, 799 Nguyễn Văn Linh, Quận 7, Tp. Hồ Chí Minh, Việt Nam
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📩 mtavietnam@informa.com

#MTAVietnam #MTAHanoi  #Manufacturing #Engineeering #MTAVietnamserries #MTAVietnamGoesHybrid #ManufacturingIndustry #MTAVietnam2022
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