Presentation before departure for study trip to Vietnam, IBSM 2009

1. Vietnam’s Industries
& Industrial Park
Done By: Plan

2. Industrial
Parks..

3. Location of the
Industrial 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

4. 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.

5. Investment incentives
Tax
 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.
Land
Investors shall be entitled to
exemption from or reduction of
land use tax, land use fee, land
rent.

6. 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

7. Top Currency
Earners..

8. 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

9. Crude Oil
Major crude oil exporter in Asia
World's 30th largest oil-producing
nation.
40 years of experience in operation and
development

10. 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

11. Garment and Textiles
World's 16th biggest garment and textile
exporter
Largest manufacturing export in Vietnam
Government encourages the establishment of
more garment enterprises to create more jobs

12. 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%
Source:GeneralDepartmentofCustoms.

13. 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

14. Footwear
European Union anti-dumping
measures
Number 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.

15. 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

16. Seafood
Main Products
Shrimps 50%
Pangasius 25%
Squid, Cuttlefish & Octopus 7%
Dried Seafood
Products 5%
Others 13%

17. Seafood
23%
33%
16%
28%
Seafood Export Markets
USA
Japan
European Union
Others

18. 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)

19. Plastics
Industry..

20. Introduction
 50 years of history
 Infant stage of production
 2700 plastic corporations in
Vietnam
 Main center of distribution: Ho
Chi Minh City

21. 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

22. Industry
Characteristics
 Labor intensive industry
 Unskilled workers
 Outdated machines
Low level of
Technology

23. 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)

24. Plastic Export Industry
 Clients of Vietnam’s
plastic goods:
 Cambodia, Laos, India,
Sri Lanka, Japan, China,
the EU, Taiwan and the
US

25. Automotive
Industry..

26. Introduction
One 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

27. Imports
To protect the local automotive
industry
 Import licensing scheme
 High customs duties on CBUs
 Various taxes and fees applicable when
buying new cars

28. 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!

29. 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

30. Furniture
Industry..

31.  Leading country in manufacturing
furniture in the Asia market
 Country’s fifth largest hard
currency earner
 Domestic wood processing industry
 Inexpensive
 High in quality

32.  2,520 wood processing
establishments
 420 are foreign-invested
 Export target for 2010 is US$3.2
billion

33.  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

34. •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

35. 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!

36. 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

37. THANK YOU !
- Plan B