The investment environment in Vietnam has appeared more attractive than China, even though there is a lack of qualified local suppliers, the head of copier and printer maker Fuji Xerox said Tuesday.
Fuji Xerox President Tadahito Yamamoto was in Vietnam to visit the company’s facility in the northern province of Hai Phong, which was commissioned in November 2013.
He commented on Fuji Xerox’s operations in Vietnam in comparison to China, where the company has two plants in Shanghai and Shenzhen, during a media meeting held after the visit.
Headquartered in Tokyo, Fuji Xerox is a joint venture between Japan's Fujifilm Holdings and Xerox Corp of the United States.
Yamamoto admitted that the Fuji Xerox Hai Phong plant has trouble finding the input materials for its production, but underscored it is one of the company’s key facilities in Asia and the world, according to The Saigon Times Online.
The Fuji Xerox plants in China are already operating in full swing, whereas the production expenses, especially labor costs, keep rising and the end of the government’s incentive period is approaching, according to the Japanese president.
Vietnam has more advantages in these regards than China, he added.
Vietnam is a member of ASEAN, which Yamamoto said is a giant and fast-growing market, plus the infrastructure in Hai Phong also meets the company’s demands.
Expanding the Hai Phong plant is thus the top choice of Fuji Xerox, Yamamoto concluded.
Yamamoto said Fuji Xerox still respects and needs the China market and its plants there. But the Chinese facilities will focus on serving the domestic market, while the made-in-Vietnam products will target the ASEAN and global markets, he added.
The Fuji Xerox Hai Phong plant is located in the Vietnam-Singapore Industrial Park in Hai Phong with an investment of approximately nine billion yen (US$74.18 million), according to Fuji Xerox Vietnam’s website.
The facility is capable of producing two million units of copiers, multifunction devices and printers a year and is set to serve as a key manufacturing hub globally for Fuji Xerox.
Yamamoto, however, admitted that the company is challenged by its bid to increase the localization rate, or the amount of materials that can be locally sourced, at the Hai Phong facility, and pointed to the short supply of qualified local suppliers.
No Vietnamese businesses have so far qualified for Fuji Xerox’s strict standards to become its No.1 supplier, the president said.
The company has targeted to achieve a 90 percent localization rate, but the current figure is only 50 percent in terms of product values, he added.
Yamamoto also revealed that Fuji Xerox thus plans to open another plant in Hai Phong to reduce the reliance on imported materials, which he said burdens production expenses.
In 2013 Fuji Xerox topped the Vietnamese copier and printer market with a share of 25 percent, according to Hiroshi Shimoe, president of its Vietnam unit.
Vietnam is always considered a strategic market for Fuji Xerox in the Asia-Pacific region, Shimoe was quoted by newswire VnEconomy as saying in November 2014.