German newspapers highlighted Vietnam as an attractive investment destination
German cassette maker Tesa plans to build a EUR 55 million (65 million USD) factory in North Vietnam in a bid to expand production from 2023, according to German newspaper Handelsblatt.
Berlin - German cassette maker Tesa plans to build a EUR 55 million (65 million USD) factory in North Vietnam in a bid to expand production from 2023, according to German newspaper Handelsblatt.
In an article published on August 13, the newspaper said the coronavirus had shown how companies must face risks as supply chains depend on each country.
Therefore, Telsa is not alone in choosing Vietnam. In recent years, the Southeast Asian country has become a popular choice for companies looking to expand their production network in Asia.
Viruses are intensifying the trend, according to the article. ASEAN countries, including Vietnam, see themselves in a good position to capitalize on this trend.
The article cites an analysis by consulting firm BCG which says that Southeast Asia is moving towards the epicenter of globalization.
The trade volume between Southeast Asia and Europe and America is expected to increase by more than 20 billion USD by the end of 2023. Meanwhile, the movement of goods between Southeast Asia and China is expected to increase by more than 40 billion USD.
Vietnam, which has a population of around 100 million, is said to have excellent prospects for capitalizing on development.
The International Monetary Fund estimates that the country can expect economic growth of nearly 3 percent this year, the article said.
The EU-Vietnam Free Trade Agreement (EVFTA), which took effect from August 1, is the reason that makes Vietnam increasingly attractive to foreign investors.
The article said Marko Walde, Chief Representative of the German Chamber of Commerce and Industry in Vietnam, expressed confidence that Vietnam would not only become more attractive as an investment destination but would also be very important in the development of alternative supply chains.
Apart from Europe, Vietnam has joined countries such as Japan, Canada, and Mexico in the free trade area since 2018 through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The country has also participated in the Regional Comprehensive Economic Partnership (RCEP) negotiations, including China and Australia. Another free trade agreement with the US is also being discussed.
Vietnam's openness to globalization has helped the country attract large companies.
Apple is moving about a third of its wireless headphone production to Vietnam. Meanwhile, Google and Microsoft have accelerated their plans to relocate part of their hardware production to the country. As for Samsung, Vietnam has been an important production location for years as more than half of its phones are made in factories in the country, the article said.