GSS Vietnam History
Vietnam’s manufacturing industry is on the rise, with around one-third of Vietnam’s GDP deriving from manufacturing. In response to Vietnam’s growing manufacturing capability, GSS has opened a Vietnam branch located in Ho Chi Minh City. Vietnam has vast growth potential that can satisfy the sourcing and manufacturing requirements of many businesses across an array of industries. The GSS approach to sourcing involves vetting suppliers and building close working relationships with the aim of producing the best manufacturing results. GSS Directors from the Australia branch, in conjunction with our Vietnam team, conduct regular site visits with our suppliers in Vietnam to facilitate growth in these relationships. GSS has been impressed with the product quality, manufacturing facilities, and work ethic of our Vietnam supply partners.
What Products are Manufactured in Vietnam?
While a lot of textiles are produced in Vietnam, industrial manufacturing capabilities are growing rapidly and is a core focus of the GSS offering including:
- Metal fabrication
- Metal stamping/forming
- CNC machining, and
- Plastic injection moulding.
Why Manufacture in Vietnam?
Supply Chain Diversity
Vietnam is well-positioned as a manufacturing partner for businesses looking to diversify their supply chains. Suppliers in Vietnam are quickly gaining reputations as high-quality, low-cost manufacturers. Turbulent political and economic environments have also highlighted the importance of mitigating risk.
Growth in Manufacturing
Vietnam is fast becoming a global manufacturing hub. The following indicators demonstrate the recent growth in Vietnam’s manufacturing industry:
- In 2020, the manufacturing a process sector totalled 58.2% of Vietnam’s Foreign Direct Investment.
- Vietnam’s manufacturing Purchasing Manager’s Index rose to 52.2 by November 2021, resulting in an expansion opportunity given the score is above 50, proposed by government incentives.
- Vietnam’s total export value experienced a 13.2% increase from 2020 to 2021, reaching $29 billion. By the end of 2022, this figure is expected to reach $39 to $49 billion.
The outlook for Vietnam’s manufacturing growth into the future is positive, bolstered by national growth and macroeconomic factors.
Vietnam is gearing up to support the growth in their manufacturing industry. The government has implemented various measures to improve Vietnam’s competitiveness, including:
- Corporate tax incentives for companies doing business in high-tech zones, certain industrial zones and difficult socio-economic areas.
- The government has recently issued Decree 57, aimed at boosting the economy and providing benefits to industries that require raw materials, spare parts, and components in their manufacturing processes.
- Free Trade Agreements (FTA) are in place, including the EU-Vietnam FTA, UK-Vietnam FTA, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
- The government is upgrading infrastructure, transport, and power projects in industrial zones. Major infrastructure projects are in the pipeline, including new port facilities, highways, and skyscrapers. These upgrades will provide Vietnam with the foundation to grow its manufacturing industry.
How to Find Manufacturers in Vietnam
In general, there are still significant barriers to entry to finding high-quality manufacturers in Vietnam. Methods of supplier searching predominantly involve word of mouth, phone calls, and in-country searching. There are considerable language barriers and many suppliers do not have websites and methods of easy communication.
GSS has built relationships with suppliers through our team on the ground in Vietnam. Derived from years of experience, communication, and manufacturing knowledge, our team is building a strong network of capable supply partners. Our customers benefit from utilising our networks to engage with high-quality, low-cost suppliers. GSS also manages the entire sampling and manufacturing process, to make offshore manufacturing as easy as possible for our customers. If you are interested in learning more, read here for more about the benefits of working with a sourcing company. Contact us now to discuss how we can help you manufacture your product in Vietnam.