Friday, 03 April 2020 04:51

The US-China trade war and the Coronavirus previously put many giant companies in the new decision making, whether they should put their sourcing source to only one country (China) or should they start finding and adding new partners. 

Let’s take a look at the case of two giant technologies Apple and Samsung in this new case of Coronavirus. According to Reuters, a haft of a Samsung smartphone is manufactured in Vietnam, a country next to China, which is well managing the virus and maintaining the manufacturing process.  At the same time, the supply chain of Apple in China seems like stop as the booming of the virus, just some manufacturing activities are remaining at a limited level. Apple also reported that their target revenue in this third quarter will not achieve as they said in the guidance before due to the effects of the virus, and their main sourcing companies are in China.

Since the start of manufacturing in Vietnam in 2009, Samsung is well maintaining and developing its quantity via low labor cost and the support of the Vietnamese Government. Following Samsung, many Korean suppliers start investing in Vietnam and find a lot of new opportunities and the potential of developing their business.

Now let’s take a look at some key factors if you consider moving a part of your manufacturing from China to Vietnam.

Labor cost

The first reason is used to compare between Vietnam and China is labor cost. Vietnam’s monthly minimum range salary in 2019 is $125 in the countryside and about $180 in big cities as Hanoi, Ho Chi Minh City.  Comparing with this in China, where the salary is double of Vietnam minimum wages from about $140 to $346. And the minimum wage growth seems very stable every year at 5.3% in 2019, 6.5% in 2018, and 7.3% in 2017.

Great location

Being known as a manufacturing King in STA, Vietnam borders Cambodia, Laos, and China, and has the long coast of more than 3000 kilometers. With the ideal location for both import and export products, Vietnam attracts a lot of investors as well as connects multi foreigner buyers all over the world.

Along with the convenience of geographical location, Vietnam’s industrial zones located across the country, from the North to the South with their own characteristics and unique to meet business requirements.

Working-age

It’s hard to deny the worker quantity in China is much more than Vietnam as Vietnam is just equal to one province in China. However, when comparing the working age, the Vietnamese workforce is about 54 million in 2018 and continues to increase by about 1.5 million annually. Since many factories start to invest and move their manufacturing to Vietnam, the labor force also get a lot of incentives to improve the skills day by day.

Government supports

Nineteen years ago, half of Vietnam had no electricity while nowadays, electricity becomes normal requirements in the whole of Vietnam. It shows how the effectiveness of the Government's efforts to change and develop this country.

In the loop of developing the Vietnam business, the manufacturing sector gets a lot of support from the Vietnam governments. The Free trade agreements with the EU previously show the hardworking of Vietnam Governments to get great deals for Vietnam business and Vietnam enterprises.

Therefore, consider to find a new manufacturing manufacturer in Vietnam besides China may be a good idea in case there are any issues happens with one country, the manufacturing activities still are remaining and may not affect the whole business as what we look at the current situation of how Coronavirus just now affect business activities.

Why work with Vietnam Manufacturing Federation? 

VMF is reshaping the traditional supply chains of the Vietnam manufacturing industry by bringing the vast network of Vietnam factories to the customer under a single platform. We carry a mission to break all barriers between international businesses and local factories, by providing a one-stop service for tailored sourcing, project management, logistics management, and supply chain management.

Incorporated in Hanoi, the capital city of Vietnam, with the global sales office in Singapore, the business and financial hub of the region, we are well connected globally, and our customers are assured of a conducive business environment. Our entrepreneurial spirit of agility, simplicity, and sincerity continues to drive the way we support our customers and contribute to the growth of the next manufacturing hub of the world.

  • Access to an extensive network of modern, multi-million USD facilities

  • Skilled labor force with thousands of engineers and workers

  • Ability to expand and rearrange factory lines to meet requirements

  • Guaranteed price competitiveness without compromising quality

  • Stable workflow with minimal factory downtime

  • Absolute confidentiality and security of customer’s intellectual properties

  • Proven track record with global customers

 

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