Vietnam is expected to move into the top 10 most competitive nations for manufacturing in next five years.
According to a Global Manufacturing Competitiveness Index report
released by Deloitte Touche Tohmatsu and the US Council on
Competitiveness, Vietnam will jump from its current global ranking of
18th to 10th.
The report is based on the responses of more than 550 senior
manufacturing executives worldwide to a wide-ranging survey discussing
the current business environment and manufacturing sector global
competitiveness.
This is the second time this report has been released and the first
time Vietnam is ranked among the most competitive nations for
manufacturing.
Executives said access to talented workers was the top indicator of
competitiveness, followed by a country's trade, financial and tax
policies, and then the cost of labour and materials, supplier network,
legal and regulatory system, physical infrastructure, energy cost and
policies and local market attractive.
Currently, China is the most competitive and is expected to hold that
distinction five years from now, followed by India, Brazil and Germany.
In South East Asia, Vietnam is the second most competitive manufacturing
nation, following Singapore but ahead of Thailand, Malaysia and
Indonesia.
"Frontier markets in Asia such as Vietnam and Indonesia are on the
rise," said Tim Hanley, Deloitte Touche Tohmatsu's global leader of
manufacturing.
"The global CEO survey results echo the view that while China and India
are still prominent in discussions, manufacturers are turning their
focus to these frontier markets for growth to capture both the growing
local consumer demand and to serve as strategic manufacturing hubs in
the global value chain," he added.
Foreign direct investment inflows into Vietnam are currently on a
downward trend amid the challenging domestic economy and global economic
troubles. However, the responses of executives in this report
underscore the attractiveness of Vietnam for manufacturing investors in
the long-term.
Several multinational companies have recently announced huge
investments in Vietnam. Samsung Electronics this month got an investment
certificate for investing additional $830 million in Vietnam. Back to
April, Nokia broke ground of its USD320 million mobile-phone factory in
Bac Ninh province, not far from Samsung's manufacturing site.
Coca-Cola last month announced plans to invest an additional USD300
million in Vietnam, raising total investment capital of this company in
the country to USD500 million.
"Vietnam is an important growth market in Asia-Pacific as we work to
achieve our 2020 vision goal of doubling system revenues this decade,"
Muhtar Kent, chief executive officer of Coca-Cola Company, said during a
visit to Hanoi.
"Vietnam's economy has maintained healthy growth in recent years and
this new financial commitment is more than an investment in Coca-Cola's
expansion in Vietnam, it is also an important acknowledgement of our
belief in the long-term potential of this key market," he added.
Japan's Fuji Xerox, a manufacturer of copiers, multifunction devices
and printers, in August also decided to build a USD110 million
manufacturing facility in Haiphong.
Fuji Xerox said it chose Vietnam because of the country's steady progress toward industrialisation.
"The country is advantageous as it has industries such as information
equipment manufacturers in a concentrated manner, as well as an
extensive land transportation network connecting the country with China,
Thailand and other ASEAN nations, which will facilitate Fuji Xerox in
establishing supply chains," the company said in an announcement.
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