While a number of Vietnamese businesses have had to dissolve or declare bankruptcy after failing to withstand the economic turbulence, many foreign-invested companies have expanded operations and increasingly taken more market share in the staple export commodities of the country. FDI businesses account for some 60 percent of the US$12 billion worth of export turnovers of textile and garment in the year to October, said Dang Thi Phuong Dung, deputy chairwoman of the Vietnam Textile & Apparel Association (Vitas). South Korea now tops the list of foreign countries with the highest investment in the Vietnamese textile and garment sectors, according to Vitas. Diep Thanh Kiet, deputy chairman of the Vietnam Leather and Footwear Association (Lefaso), said it is no surprise that FDI manufacturers hold a large proportion of the exporting market. “They have a well-developed strategic vision, strong financial muscles, and flexible production management,” he explained. While local leather and footwear companies have only posted annual growth of 10 to 12 percent in the last five years, the figures of the foreign firms are as high as 16 to 18 percent, according to statistics from Lefaso.Expanding operation In the first ten months of this year, 359 FDI projects have registered for additional capital for their investment in the country, with a combined registered capital of $3.8 billion, a 12.3 percent increase year-on-year. Most of the enlarged investments are from businesses operating in the textile and garment and precision mechanics sectors. The 100 percent Japanese-invested Saigon Precision, for instance, has increased its registered capital by $25 million in order to set up a new manufacturing plant. South Korea’s Nobland Vietnam Co Ltd has also hiked its capital by $17 million, and expanded its operation to an 11,000 hectare land plot in the Tan Thoi Hiep Industrial Park. Taiwan’s Formosa textile company announced in late October a capital addition of $30 million, while Chinese firm Texhong said it has increased capacity from 30,000 tons of textile products a year to 150,000 tons, and hiked registered capital from $80 million to $150 million.Competition and acquisition Local steel manufacturers have suffered from harsh pricing competition since the South Korean Posco Steel Corporation inaugurated its $528 million cold rolled steel plant in Ba Ria – Vung Tau. With Posco Vietnam currently accounting for nearly 50 percent of the domestic cold rolled steel market, the plant has put pressure on the country’s two largest manufacturers, VNSteel, and Thong Nhat Steel, said Nguyen Tien Nghi, deputy chairman of the Vietnam Steel Association. “Products of the FDI companies can be reasonably priced thanks to their modern and material-saving technologies, enabling them to remain more competitive than local businesses,” he added. In a different approach, the Nawaplastic Industry Co Ltd (Saraburi), a plastic pipe manufacturer in which a 100 percent stake is held by Thailand’s Thai Plastic and Chemicals PCL (TPC), has gradually acquired shares from Binh Minh Plastic (BMP) and Tien Phong Plastic (NTP), the country’s two largest plastic manufacturers. Saraburi currently holds more than 7 million BMP shares, or a 20.5 percent stake, and 9.8 million NTP shares, or a 9.86 percent stake, according to publicized statistics. The Thai company has thus become the second largest shareholder at the said businesses. With Tien Phong accounting for 70 percent of the northern plastic market, and Binh Minh 50 percent in the south, it is likely that the domestic plastic market will be dominated by the foreign company if they continue to increase their shares at the two local firms.
More
Vietnam FM Bui Thanh Son enjoys 'pho,' walks with Indonesian counterpart in Hanoi
This is not the first time that Minister Son has invited a foreign counterpart to have breakfast and take a stroll in the Vietnamese capital
Read more
Vietnamese billionaire Pham Nhat Vuong commits $1 billion more to VinFast
He will spend VND10 trillion (US$394 million) from his pocket building charging stations in the next three years
2 days agoForeign airlines offer cheaper Vietnam-Germany tickets than airfares for domestic flights by Vietnamese carriers
Exorbitant airfare prices are presenting obstacles for tourism destinations in Vietnam
1 week agoA closer look at BYD Seal ahead of entry into Vietnam
The car might be available in Vietnam in both hybrid and electric versions
2 days agoHo Chi Minh City hosts Global Sourcing Fair Vietnam with 8,000 attendees expected
It features a wide range of product lines from Vietnam and other Asian countries
3 days agoTikTok Shop’s Q1 revenue triples Lazada's in Vietnam
TikTok Shop’s turnover increased 15.5 percent over the last quarter of 2023
3 days agoHighlights
Local delicacies at Hue cuisine fest in central Vietnam excite foreigners
Beatrix said that the central province not only boasts charming landscapes, but also is well-known for various dishes
Photos
Artist paints murals on house to raise awareness of COVID-19 prevention in Hanoi
He drew the virus, vaccine, and earth on the exterior walls of a house
Latest news
South Korean firm provides university in Vietnam’s Tra Vinh with water purification technology
Aquaworks will supply the university with water purification equipment to facilitate its study on water treatment
British young woman injured after falling into cable trench in Hanoi
The hole is some two meters deep
Local delicacies at Hue cuisine fest in central Vietnam excite foreigners
Beatrix said that the central province not only boasts charming landscapes, but also is well-known for various dishes
Foreigners flock to My Khe, one of Asia’s best beaches, for relaxation amid heat
They enjoyed beach utilities offered by local service providers, including beach huts, lounge chairs and others
Hanoi fines disabled TikToker $197.5 over service refusal claims
He was fined VND5 million ($197.4) for providing inaccurate information on social media
Ho Chi Minh City to fell, relocate 185 trees for 1st metro line, bus route connectivity project
The city will fell 37 trees and relocate 148 others
All 10 Vietnamese students bag medals at int’l Mendeleev chemistry olympiad
This was the first time Vietnam has sent students to the olympiad
Da Nang airport’s security center hands over forgotten nearly $12,000 to passenger
The passenger left the bag at the airport as he was absorbed in a conversation
Mischievous monkey anesthetized, sent to rescue station in Ho Chi Minh City
The monkey damaged crops, foraged food in kitchens, made a mess in places it came, ate eggs, and caught chicks
Ho Chi Minh City police bust transnational money laundering racket, including gold shop trading nearly $513mn
Authorities have launched legal proceedings against and temporarily detained 13 related individuals, including two Nigerians