ASEAN KEY DESTINATIONS
FDI companies spearhead export growth
Viet Nam's exports rose 15.1 per cent in the first eight months to US$85.2 billion, with foreign-invested companies accounting for 60 per cent of the figure.
According to the customs department, domestic firms, which used to be strong in agriculture, aquatic, and fisheries produce, saw exports level off or even decline.
Seafood exports, for instance, increased by just 2.6 per cent year-on-year to $4.05 billion.
Rubber companies suffered due to a fall in export prices.
The Dong Phu Rubber JSC, for instance, saw exports go up by 8.5 per cent but revenues declined by 18.3 per cent to $10.03 million.
Tuoi tre (The Youth) newspaper reported decreases in both export prices and quantity for other products like fertilisers, cassava and products, coffee, and rice.
Sectors that saw exports grow, like mobile phones and accessories, computers, and electronics and components, are almost completely dominated by foreign companies.
Exports of mobile phones and accessories were worth $13.39 billion, a whopping 80.8 per cent rise.
Of this, foreign companies like Samsung accounted for $13.28 billion.
Computer and electronic exports were up by 42.1 per cent to $6.77 billion, with FDI companies accounting for almost the entire figure.
FDI companies have made big inroads into the textile and footwear sectors, accounting for exports of $6.83 billion and $4.18 billion respectively. Overall, textile exports were worth $11.45 billion and footwear exports, $5.47 billion.
They are looking for more business opportunities in the two sectors.
According to the Viet Nam Leather, Footwear and Handbag Association (Lefaso), many companies from France, Australia, and Japan have expressed interest in tie-ups for the production of sports and other shoes and handbags in the last two months.
A Lefaso spokesperson said since Viet Nam offers the lowest costs for investors, "it is understandable that more and more foreign companies are interested."
Existing FDI companies too are investing afresh to expand operations and production scale.
Changshin Vietnam Co Ltd, which makes shoes for Nike, has announced plans to increase investment by $12 million to expand its factory and step up production by next year.
Other FDI companies that produce for world famous brands like Adidas, Coach, Puma, Converse, and Clark have all enlarged capacity and payrolls to make use of the opportunities they hope will arise from the Trans-Pacific Partnership.
Pham Xuan Hong, deputy chairman of the Viet Nam Textile and Apparel Association, estimated FDI companies to account for 60 per cent of the sector's total exports.
In the garment segment, domestic firms may be competitive, but FDI companies are "dominant in textiles, dye, and weaving in terms of capacity and output," he added.
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