Vietnam’s Industries

& Industrial Park

Done By: Plan

B

Industrial

Parks..

Location of theIndustrial Parks

71 industrial parks including 67 industrial zones (IZs), 3 export processing zones (EPZs), and 1 high-tech park

Among these, almost all projects (93%) are engaged in manufacturing while the rest provide infrastructure services inside these parks

Noi Bai Industrial Zone

Dai An Industrial Zone

Phu Dien Industrial Zone

Vietnam’s infrastructure

Investing more than one third of its GDP

9% goes into infrastructure

Seaports and electric power - most important factor now for firms considering investment in Vietnam

Large scale infrastructure such as (ports, airports, major highways, national power grids) and local infrastructure such as (road access, apartments, water plants, power substations, etc.) are both necessary in the long run.

Investment incentivesTax Exempt from payment of import duty

on equipment, materials, means of transportation and other goods for implementation of investment projects in Vietnam.

Entitled to investment incentives in corporate income tax under the law on corporate income tax.

LandInvestors shall be entitled to

exemption from or reduction of land use tax, land use fee, land rent.

Investment incentives Carry forward losses Losses by the investors can be carried forward to the

following year. The amount of such losses shall be set off against taxable income for the purposes of corporate income tax

Construction of infrastructure systems inside fences of industrial zones, export processing zones and high-tech zones

Top Currency

Earners..

Rice

World’s 2nd leading rice exporter

Supplies 5.2 million tones of the commodity to the world market annually

Year 2008 revenue= 610 million USD

Crude OilMajor crude oil exporter in Asia

World's 30th largest oil-producing nation.

40 years of experience in operation and development

Crude Oil US$2.5 billion to

construct FIRST oil refinery

Named Dung Quat, located in the central province of Quang Ngai

Annual processing capacity of 6.5 million tones

Significant moment in the country's development and energy security

Garment and TextilesWorld's 16th biggest garment and textile exporter

Largest manufacturing export in Vietnam

Government encourages the establishment of more garment enterprises to create more jobs

List of 15 Asian countries importing Vietnam's textile

Order Country Value Import percentage

1 Japan 325,048,758 46.551%

2 Taiwan 197,529,175 28.289%

3 South Korea 75,953,429 10.877%

4 Singapore 55,796,225 7.991%

5 Hong Kong 26,629,782 3.814%

6 Malaysia 7,570,083 1.084%

7 Laos 3,151,433 0.451%

8 China 2,599,437 0.372%

9 Thailand 2,145,586 0.307%

10 Philippines 967,007 0.138%

11 Combodia 590,550 0.085%

12 Iran 106,202 0.015%

13 Iraq 92,995 0.013%

14 India 73,013 0.010%

15 Indonesia 12,390 0.002%

Total 698,266,065 100.00%

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Footwear

Sold overseas, mainly in the EU, Japan and the U.S

Footwear revenue worth more than us$3 billion in 2005 yearly rise of 11.7 per cent

Footwear

European Union anti-dumping measuresNumber of leather shoes exported

decreased from 120 million (2005) to 107 million pairs (2006) and slumped further to 91 million pairs (2007)

Diversion: Strive to penetrate more deeply into Japan instead

Export revenue suffered a 6.3% decrease

Anti dumping law is…

Disallowing foreign producers to sell their products to an importer in the domestic market at prices lower than in their own national markets, or at prices below cost.

The sale threatens to injure a domestic industry producing similar products and retards the establishment of potential industries.

It is a form of price discrimination between two national markets.

Electronic Goods

Lack of strategic planning

Over-focused on employing cheap, low-skilled Vietnamese workers

Failure to train high-tech engineers

Serious imbalance in production

Seafood

Main Products

Shrimps 50%

Pangasius 25%

Squid, Cuttlefish & Octopus 7%

Dried Seafood Products 5%

Others 13%

Seafood

23%

33%

16%

28%

Seafood Export Markets

USA

Japan

European Union

Others

Wooden products

5th largest hard currency earner

2008’s export value of $2.8 billion

5th largest wood-product exporter in the world after China, Malaysia, Indonesia and Thailand.

Drastic drop in exports in 2009 due to global downturn

(U.S-> core importer)

Plastics

Industry..

Introduction

50 years of history

Infant stage of production

2700 plastic corporations in Vietnam

Main center of distribution: Ho Chi Minh City

In the recent years, demand for Vietnam’s

plastic goods had increased significantly as compared to other

countries.

Has an annual growth rate of 30%!

Introduction

Industry Characteristics

Labor intensive industry

Unskilled workers

Outdated machines

Low level of

Technology

Plastic Import Industry

2nd largest importer of raw plastic materials in Asia in 2004

1.5 – 2 million tons

Major exporters to Vietnam: China, South Korea, Japan and Taiwan

Types of imported raw materials: Polyethylene (PE), polypropylene (PP), polyvinyl chloride E (PVCE) and polyvinyl styrene (PS)

Plastic Export Industry Clients of Vietnam’s plastic goods:

Cambodia, Laos, India, Sri Lanka, Japan, China, the EU, Taiwan and the US

Automotive

Industry..

IntroductionOne of the youngest in the ASEAN region

local assembling of cars started at the end of the last century

open for imports of new cars on a larger scale only since 2003

used cars to a certain age maximum are allowed for import only since 2006

Low cost manufacturer of automotive components

Hence, Vietnam’s car penetration is one of the lowest in the world

Imports

To protect the local automotive industry

Import licensing scheme

High customs duties on CBUs

Various taxes and fees applicable when buying new cars

Pre-WTO

The government’s decision to

reduce tariffs on imported cars imports of used cars and their tariffs are also lowered

Hence, stiff competition between the car makers in Vietnam respond to these government’s new

rulings by immediately dropping their prices!

Pre-WTO

Gauged to be a potential yet underdeveloped market, the Vietnamese automobile industry is becoming increasingly attractive to the foreign carmakers

Hyundai publicized the transfer of its automobile engine production technology to its Vietnamese partner

An automobile factory, producing Hyundai buses and trucks, was inaugurated in northern Bac Giang province

Furniture

Industry..

Leading country in manufacturing furniture in the Asia market

Country’s fifth largest hard currency earner

Domestic wood processing industry

Inexpensive

High in quality

2,520 wood processing establishments

420 are foreign-invested

Export target for 2010 is US$3.2 billion

Specializes in production of outdoor and indoor furniture, mainly made of wood and aluminum

Employing 4,800 workers Exporting over 500 containers of wood

furniture each month

Headquarter in Ho Chi Minh City

•Since 2005

•980 Employee

• Total investment of

US$10 m

•Since 2004

•927 Employee

• Total investment of

US$7 m

•Since 1995

•858 Employee

• Total investment of

US$3m

•Since Aug 2001

•520 Employee

• Total investment of

US$15 m

KHAIVY HCMC

FACTORY

DUYEN HAI 1

FACTORY

KHAIVY QUINHON

DUYEN HAI 2

FACTORY

However..

Purchasing power of the US and EU market

(make up to 55% of imports)have lowered by 30% due to the global recession!

Export dropped drastically in 2009!

...So we will need

investment incentives to overcome this!

Investment Incentives

Government to stop collecting export taxes on wood products temporarily

Export promotion of wood products

Wood processors’ debt repayment periods to be extended

Companies to be provided with easier access to loans

THANK YOU !- Plan B