Vietnam is a country that has been a popular alternative to manufacturing in China for many years and signs suggest that the market will continue to grow. The Vietnamese manufacturing sector has competitive production capabilities to meet a variety of manufacturing needs and its reliability makes it an attractive option for supply chain leaders looking to fortify their supply chains.
Core Industries: Machinery, garments & textiles, footwear, and furniture
Three benefits of manufacturing in Vietnam
1. Production Capabilities
Vietnam is special in that it has a diverse landscape of factories that are able to produce different types of products but also offers advantages such as smaller minimum order quantities and quicker shipping times than China. Economic growth in Vietnam is being propelled by businesses moving from China to manufacture there. As such, plans for major investment and improvements in the manufacturing sector are a major focal point of the Vietnamese government.
2. Labor Costs
A key contributor to the overall cost when outsourcing manufacturing to an overseas country is labor costs. The cost of labor in Vietnam is currently and has been historically about half of the corresponding cost in China.
3. Special Economic Zones
The Vietnamese government has designated key areas to attract foreign investment and businesses looking to manufacture there. This growing number of economic and industrial zones is spread across four key regions throughout the country, each offering their own unique benefits. Benefits for doing business in these zones include tax exemptions/reduction and other corporate income tax incentives.
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