Manufacturing sector in Vietnam - statistics & facts
Manufacturing has been a key driver of the export-oriented economy of Vietnam since the economic reforms that started in 1986. Today, the country is considered an emerging manufacturing hub, thanks to various factors such as its strategic location in the middle of the Southeast Asian region, its stable political system, and the availability and affordability of its labor force. In 2021, the sector employed the second-largest number of people after the agriculture sector while being among the leading gross domestic product contributors in Vietnam.
Vietnam’s emergence as a new manufacturing hub
For many companies, solely relying on China for production outsourcing was no longer the best option due to several reasons. This included the U.S.-China trade war, the COVID-19 pandemic, and the increasing manufacturing costs in the East Asian nation. As a result, Vietnam emerged as a new candidate for manufacturing, thanks to its low labor and overhead costs, as well as its policies for attracting foreign direct investment (FDI). Additionally, the country boasts access to important trade routes via its transportation network, especially maritime transport. To further support the manufacturing sector, the Vietnamese government has been supporting the establishment of over 400 industrial parks and so-called economic zones with favorable conditions for investments in designated provinces across the country.
In 2021, despite the impact of the COVID-19 pandemic on the global economy, Vietnam still recorded over 248 billion U.S. dollars of FDI in its manufacturing sector, equaling almost 60 percent of the total investment of this kind. FDI firms contributed significantly to the total exports from Vietnam, especially regarding high-tech products such as smartphones, computers, and machinery. Local producers, on the other hand, were more active in producing agriculture and fishery or textile products.
The most valuable made-in-Vietnam products in recent years have been mobile phones, electronic appliances, machinery, garments and textiles, and footwear. Vietnamese facilities have been responsible for the production of many globally known brands. For instance, the South Korean global tech giant Samsung has its largest overseas production facility in Vietnam, which manufactures over half of the brand’s mobile phone output. Lego is among the latest companies to enter the country by establishing its second manufacturing facility in Asia there. Planned for operation in 2024, it would be the first-ever carbon-neutral factory of the company. Together with other new projects in the manufacturing sector, Lego is expected to further diversify the list of Vietnamese export commodities.
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