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Vietnam offers ideal outsourcing destination for multinationals Ngày đăng 2011-10-19

Multinational companies are tending to move their outsourced facilities from China to other countries, offering lucrative opportunities for Vietnam.

At a recent conference on purchase, manufacturing and retail and distribution in the Vietnamese market held by the Vietnam Supply Chain, economists said that Vietnam has a major opportunity to become a key outsourcing centre for multinational companies.

Jonas Franceschina, Southeast Asian Director of Sourcing Agent IntercoopHG, said PUMA AG Rudolf Dassler Sport’s recent relocation of its design centre from China to Vietnam was an example of the trend.

Wages in China have been on the rise, and are expected to double by 2015, which is the main reason for multinationals moving outsourcing facilities to Vietnam.

Meanwhile, Vietnam with its cheap and abundant labour force offers attractive prospects, particularly for labour-intensive industries.

Major players in the footwear sector such as Adidas, Coach and Prada have already come to Vietnam, and engineering and electronic producers have also invested in the market.

According to Greg Ohan, National Head of Industrial & Logistics Services, CB Richard Ellis, Hyundai plans to raise its production capacity in Vietnam to 600,000 autos by 2020; while Yamaha, Piaggio and Honda have also eyed investment expansion in the country.

Arjan Dominicus, General of DAMCO, one of the world’s leading providers of freight forwarding and supply chain management services, said infrastructure development should be a key priority to turn Vietnam into a sustainable outsourcing destination for multinational companies.

Developing supply chains

Greg Ohan said multinational companies have invested in Vietnam, not only due its comparative cost advantages but also due to its long-term prospects such as political stability and major potential to attract foreign investors, particularly in industrial parks.

Frank Vossen, Director of SEDITEX Vietnam Ltd, said Vietnam has started developing its supply chain since 1989. However, it still lags behind regional rivals such as Thailand and Malaysia in terms of materials, human resources and management capacity.

However, he noted that, Vietnam had great potential for the chain development, believing that “Vietnam’s supply chain will keep pace with the mentioned-above countries’ in the next three to four years."

According to Jonas Franceschina, improved supply chain effectiveness would not only help Vietnamese firms reduce product prices but also increase the competitiveness of the country’s outsourcing industry.

Arjan Dominicus said Ho Chi Minh City had many advantages for supply chain development such as direct ship routes between the city and US and European destinations.

 

Source: Dtinews


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