Vietnam - a next manufacturing hub - EAST INVESTMENT & MANAGEMENT CONSULTING CO.,LTD

Vietnam - a next manufacturing hub - EAST INVESTMENT & MANAGEMENT CONSULTING CO.,LTD

Vietnam - a next manufacturing hub - EAST INVESTMENT & MANAGEMENT CONSULTING CO.,LTD

Vietnam - a next manufacturing hub - EAST INVESTMENT & MANAGEMENT CONSULTING CO.,LTD

Vietnam - a next manufacturing hub - EAST INVESTMENT & MANAGEMENT CONSULTING CO.,LTD
Vietnam - a next manufacturing hub - EAST INVESTMENT & MANAGEMENT CONSULTING CO.,LTD

Why Vietnam

Vietnam - a next manufacturing hub

These following factors explained why you should choose Vietnam as a next destination of manufacturing investment:

 

1-Competitive cheap Labor cost

Vietnam named as one of 5 cheapest countries in the world *by RICHEST magazine in 2013.

In detail, Vietnam wage equal approximately a half of china wage cost, over 1/3 Thailand wage cost, lower than Philippine, a little bit higher than Indonesia…

Please see these data below to insight the wage cost of labor in Vietnam:

To be more exact on the figure of compensation the worker could get, then adding the welfare as the employer’s payment to employee through insurance package and bonus. The following table revealed:

Source: 2014 report by Dezan Shira & Associate

 

2-Rich Human Resource with abundance of working-age labor force 

  • The population of Vietnam is estimated at 92,547,959 as of July 1 2014.
  • Vietnam's population represents 1.28% of the total world population.
  • Vietnam ranks number 14 in the list of countries by population.
  • The population density in Vietnam is 279 people per Km2.
  • 33% of the population is urban (30,482,811 people in 2014).
  • The median age in Vietnam is 30.3 years.

Age structure: 

 

  • 0-14 years: 24.3% (male 11,946,656/female 10,800,602) 
  • 15-24 years: 17.8% (male 8,598,360/female 8,023,377) 
  • 25-54 years: 44.8% (male 20,983,638/female 20,861,243) 
  • 55-64 years: 7.4% (male 3,149,494/female 3,763,309) 
  • 65 years and over: 5.6% (male 2,034,721/female 3,260,435) (2014 est.) 


Population pyramid: 

Medium age: 
total: 29.2 years 
male: 28.1 years 
female: 30.2 years (2014 est.)

The working-age population is measured at 42.3% of total population in 2014 according to World Bank

3-Educated, Skilled, Hard work spirit Labor source

A skilled workforce is central to Vietnam’s economic modernization.

- Over the past two decades, basic literacy and numeracy skills have helped Vietnamese workers move from low productivity agriculture into higher productivity non-farm jobs. This has promoted rapid economic growth and poverty reduction.

- Today, Vietnamese workers perform better in reading than workers in other countries, including wealthier ones. Looking ahead, continued strong economic growth will require increased labor productivity and a workforce with the skills to match the job market.

• Despite impressive literacy and numeracy achievements among Vietnamese workers, many Vietnamese firms report a shortage of workers with the right skills.

• The skills gap is particularly acute among applicants for jobs in technical, professional and managerial positions, while a shortage in applicants is common among more elementary occupations.

• Employers identify job-specific technical skills as the most important skill. But they are equally looking for cognitive skills, such as problem-solving and critical thinking, and behavioral skills, such as team work and communication.

• Cognitive and behavioral skills are formed in early years in life and continue through later stages. Technical skills are acquired later through technical and vocational education and training, higher education and on the job training.

The main fundamental that improving quickly the quality and skill of Vietnam Labor force over past years due to the education system is appreciated and invested much more. In addition, the traditional culture appreciated the study and learning in school, college, university system.

Look forward, when Vietnam integrate more into the world, there are many Vietnamese people go abroad to study. That is also a high quality labor force to serve the need of enterprises, through by developing Vietnam to become a modern country.

 

4-The investment cost is rather competitive compare other countries

The cost for doing business in Vietnam is very competitive compare to other countries in the region. The following table reveal by the survey of Jetro 2012:

 

5-The location is center of Asia, be convenient for logistic and import-export activities

Vietnam located in Indochina Peninsula, and is center of Asia. The location advantages of Vietnam create very good conditions and ease the logistic and import – export activities through many channels such as land, air, sea.

 

6-Stability in political system  

Political stability is one of the main factors that have helped Vietnam pursue its economic development policy. Since 1990, most other regional countries, except Singapore, have experienced political crises and in addition in 1997 Asia economic crisis happened but Vietnam economic seemingly out of it effects, and still growing expressly , differently with the almost Asia Countries. In throughout period, there wasn’t any crisis or instability in political system. Meanwhile Vietnam has achieved political stability – a factor that enable Vietnam go ahead with its renewal process.

 

7-Highly integration into the region and the world through FTA :

Vietnam joined WTO since 2007 remarked a first time of joining world trade organization. This create a good conditions for developing of Vietnam economy through attracting more foreign investment and exporting goods. In 2015 remarked a memorizing time for Vietnam in integration into the region and the world through joining many important free trade agreement. Vietnam actually set a record in intergration through free trade agreement.

There are many FTAs Vietnam joined such as Vietnam– Korea, Vietnam – EAEU, Vietnam-EU, and TPP (Trans Pacific Partnership) a highest standard free trade agreement ever with a huge market capacity of 40 % of Global GDP.

 

8-Improving Infrastructure system including the traffic system and port system.

These improvement help supporting the industrial manufacturing sectors developed more and more thanks to the appreciation and commitment in investment by Government and the diversify of investment cooperation.

As we have witnessed in recent time, there has been a significant improvement in infrastructure system in Vietnam by investing and completing many important road and port such as Ho Chi Minh-Long Thanh – Dau Giay highway, Ho Chi Minh – Ben Luc – Tham Luong freeway.

 

 

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