Vietnam is transforming into high-value industries

Dec 27, 2021

Vietnam is continuing to transition from labor-intensive industries to high-value industries.

Vietnam's export indicators are growing despite the epidemic situation. The total export turnover of goods reached 212.6 billion USD, up 21.2% over the same period last year. In which, phones and components grew by 13% and the industry group with the highest export turnover accounted for 16.8%. From 2016 to August 2021, this group of industries leads in key export products.

The group of electronics, computers and components also maintained the growth momentum from last year, reaching 15.8%, equivalent to 31.3 billion USD. In particular, the group's export value recorded a breakthrough when it surpassed textiles from 2019 to now. Export turnover of textiles and footwear currently accounts for a smaller proportion compared to the same period last year, at 10% and 6% respectively.

According to Savills, after phones and components, the main export industry is gradually shifting from low value-added products such as clothes and shoes to products with higher value such as electronics and components. . Accordingly, the proportion of production and export of Vietnam is showing a change in the orientation of the industry.

In terms of FDI, the manufacturing and manufacturing industry is recording a value in 2021, accounting for 53.4% ​​of total capital, up 16.45% over the same period.

Savills expert said that, if looking at the FDI picture of the industry in the past 10 years, Vietnam is developing along the value chain. In which, electronic equipment group accounted for the highest proportion at 19.29% of total capital. Followed by electronics and computers with 17.14%. Paper, plastic and rubber accounted for 14.66% and 13.54% respectively. Meanwhile, textiles, garments and food only recorded less than 4% investment capital.

John Campbell, industrial real estate manager, Savills Vietnam, said that in the past 20 years, thanks to stable growth rates, an export-oriented economy, increased FTAs, and a young workforce. , strategic geographical location..., Vietnam has become one of the most noticed manufacturing centers in Asia.

According to him, despite the challenging 2021, Vietnam continues to transform from labor-intensive industries to high-value industries. "Low-value industries are slowly taking shape in other parts of Southeast Asia," Savills said.

Because Vietnam no longer applies the same preferential policies as before, it becomes quite difficult to find cheap labor and land in Vietnam. However, investors of high-value industries abroad remain optimistic about Vietnam's long-term growth.

On the other hand, Savills also assessed, "The situation of attracting industry in the two South - North is different.

The North is attracting a lot of investment capital in the manufacturing sector, focusing on the electronics industry. In the past 9 months, the manufacturing industry here received the most newly registered FDI in the country, reaching 3.99 billion USD and accounting for 72.92%. In which, electrical equipment leads the industry with the proportion of 18%. Followed by computers and electronics at 16%.

4 out of 5 large investment projects in key economic regions come from high added value industries. For example, Amata Quang Ninh industrial park recorded more than $498 million from Jinko Solar for the electrical equipment sector. Or Quang Chau industrial park in Bac Giang is invested by two big investors, Foxconn Technology and JA Solar Investment, with more than 270 million USD and more than 269 million USD respectively.

Meanwhile, in the South, projects have a smaller capital scale, mainly focusing on traditional manufacturing and manufacturing industries. Newly registered FDI is evenly distributed to the plastic and rubber sectors, textiles, food, paper and apparel, around 2-3% each.

Among the 5 industrial, food and beverage projects that received the largest total investment capital, Protrade Binh Duong industrial park received $78 million from IDL Coffee Holdings and Becamex Binh Phuoc industrial park received over $36 million. Following is the metal and paper products industry with 60 million USD each in 2 industrial zones Minh Hung, Binh Phuoc and Loc An-Binh Son, Dong Nai...

Commenting on the development trend of the industry, Mr. Matthew Powell, Director of Savills Hanoi, said that businesses are focusing on improving technology and promoting production along the value chain. At the same time, they also gradually switched to clean production models and high-tech products to adapt to the needs of customers. Therefore, real estate developers need to pay attention to provide industrial parks that can meet this requirement.

The development of industries in the value chain will accelerate the modernization of Vietnam's industry. To increase production capacity, businesses are integrating emerging technologies at factories such as artificial intelligence or 3D model printing.

Source: Vnexpress