Vingroup, Vietnam’s largest privately-run conglomerate, commenced on Monday the construction of a smartphone plant in Hanoi, an investment that the company said was driven by rising domestic and international demand for its products.

The facility, located at the Hoa Lac Hi-tech Park, is capable of producing 125 million Vsmart smartphones a year once running in full force.

VinSmart, the electronics subsidiary of Vingroup, launched its Vsmart smartphone line last year, with production based in Dinh Vu - Cat Hai Economic Zone in the northern city of Hai Phong, which is also home to the conglomerate’s car-making arm Vinfast.

The new factory in Hanoi will help meet “rising demand from both the domestic and international markets” for Vsmart, according to Nguyen Viet Quang, deputy chairman and general director of Vingroup.

Quang said VinSmart has received not only warm reception from domestic consumers for its smartphones, but also outsourcing orders from partners in Europe and the U.S.

In its first phase, expected to complete in August, the VinSmart plant in Hanoi will span an area of 15.2 hectares and is capable of producing 23 million smartphones a year.

The capacity is expected to be increased to 34 million units per year in October, and 125 million in 2020.

The 125-million-unit-per-year figure is 25 times higher than the current capacity of the VinSmart facility in Hai Phong.

The most modern equipment and advanced technology applications from the U.S., Germany and Japan will be used at the Hanoi facility, according to Vingroup.

Like us on Facebook or follow us on Twitter to get the latest news about Vietnam!