Major multinationals (MNCs) like Nike and Foxconn expanded their operations in Vietnam last year, showcasing increased MNC interest in producing and doing business in the country.

Several reports have said that the MNCs are attracted by key advantages that Vietnam offers including cheap labor and strong growth potential.

A recent CNCB report shows that Vietnam has overtaken China as the biggest producer of Nike footwear, produced 51 percent of its shoes here, compared 21 percent in the neighboring giant.

Chinese media have reported that Nike’s rival Adidas is going the same route with 40 percent of its footwear made in Vietnam.

As of August last year, Nike had 138 suppliers in Vietnam with a total of 484,000 workers, mostly in the south.

Industry insiders say that Vietnam’s cheap and abundant labor pool (compared to China) is why Nike and Adidas have been allocating more production here.

Some other foreign direct investment companies have also been making moves to invest more in Vietnam.

Earlier last year Apple’s supplier Foxconn said it would build a table and laptop factory called Fukang Technology with a total investment of $270 million. The factory will be capable of making 8 million products a year, it said.

The Taiwanese electronics contract manufacturer has so far invested $1.5 billion in Vietnam.

Its competitor Pegatron expanded its presence Vietnam in September 2020 with a $1 billion investment in an electronics plant in the northern port town of Hai Phong.

The trend of major companies shifting production and business to Vietnam has taken hold in recent years.

For instance, South Korea’s Hanwa, a manufacturer of motorbike parts has established a plant in Hanoi; Japan’s Yokowo established a factory in the northern province of Ha Nam to make vehicle parts; while China’s Huafu, a garment producer, has started operation in southern province of Long An.

South Korea’s LG poured an additional $1.4 billion into its plant in Hai Phong last year, bringing the total investment to $4.65 billion, making the company the biggest foreign direct investor in the port town.

Sharp, Nintendo, Komatsu and Lenovo have all announced plans to move to or expand their presence in Vietnam.

But Nguyen Mai, chairman of Vietnam’s Association of Foreign Invested Enterprises (VAFIE), said he expected more European, American and Asian companies to enter Vietnam this year apart.

Source: VnExpress