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Vietnam Experiences Influx Of Japanese Investments

Vietnam Experiences Influx Of Japanese Investments

Experts have projected that the strengthened bilateral ties between Japan and Vietnam as well as Vietnam’s high economic growth and enhanced business environment will attract an influx of Japanese investments.

During Vietnamese Prime Minister Nguyen Xuan Phuc’s recent visit to Japan, wherein he met with Japanese companies such as All Nippon Airways Co., Ltd, AEON Co Ltd., Mitsubishi UFJ Financial Group, Mitsui and Mitsubishi, sentiments were strong on the part of the Japanese investors regarding their interest in investing in Vietnam. With Japanese companies stating that they have plans to invest billions of US dollars in Vietnam, across a diversity of sectors.

Seiji Imai, Head of Mizuho Bank for Asia and Oceania has also commented that Vietnam is the first destination for overseas investments in Japan and the country could be experiencing a new wave of investments from small and medium Japanese enterprises with advanced technologies that are looking to enter the domestic market. Furthermore, he believes that the country will experience two waves of investments from Japanese firms with the first wave being attributed to large manufacturing companies and the second to follow shortly thereafter.

Umeda Kunio, the Japanese Ambassador to Vietnam has told the local media that many Japanese companies are very interested in conducting business in Vietnam in areas such as urban development. This can be witnessed with projects in the northern part of Hanoi as in the case of the the Binh Duong project, subway route No.1 in Ho Chi Minh City, and subway routes 1 and 2 in Hanoi.

Currently, Vietnam ranks as the third country in a recent survey on the overseas deployment of Japanese manufacturing companies by the Japan Bank for International Co-operation, and second in the same survey if only small and medium companies are taken into consideration as observed by Mr Kunio.

In a survey conducted last year by the Japan External Trade Organization (JETRO), up to 70 percent of Japanese companies that are currently operating in Vietnam have expressed an interest to expand operations within the country, which is a relatively high percentage compared to other countries in ASEAN. Additionally in a Japanese survey questioning participants about countries and territories for potential expansion agendas, the number of companies choosing Vietnam has been observed to increase over three consecutive years.

According to Mr Kunio, the attractiveness of Vietnam as an investment destination can be attributed to its market potential, relatively low cost yet diligent workforce and political stability. Based on numerous economic forecasts, Vietnam’s economic growth is projected to remain high in 2018, and Japanese investment into Vietnam this year is also expected to be corresponding high. A trend that is also backed by reports from the Foreign Investment Agency.

As of 20 September this year, Japan had 3,900 valid investment projects that are worth a total registered capital of US$55.78 billion in Vietnam. Similarly, up till September of this year, Japan has been recorded as Vietnam’s largest foreign investor, with total investment capital of US$7 billion.

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Vietjet To Finance Fleet Expansion With Foreign Investment

Vietjet To Finance Fleet Expansion With Foreign Investment

Vietnamese budget carrier, Vietjet, has signed two agreements worth a total of US$1.2 billion with Mitsubishi UFJ Lease & Finance Company Limited (MUL) and BNP Paribas in order to fund its fleet expansion plans which includes the acquisition of up to five brand new aircrafts, costing a total of US$614 million.

The signing ceremony was witnessed by the Vietnam Prime Minister Nguyen Xuan Phuc and also included the signing of a memorandum of understanding worth US$625 million between Vietjet and Natixis, a French banking group, as well as several Japanese equity underwriters.

These deals have been made under a financial plan whereby Vietjet would claim future ownership of the aircrafts and the acquisition of the new aircrafts, which includes the A321neo aircraft, are also acknowledged as part of a contract signed earlier between Vietjet and Airbus.

Currently, Vietjet operates 60, A320, A321 aircrafts and operates more than 385 flights daily, carrying more than 65 million passengers across 101 routes to destinations such as Vietnam, Japan, Hong Kong, Singapore, South Korea, Taiwan, China, Thailand, Myanmar, Malaysia and Cambodia.

Moving forward, Vietjet has announced plans to develop three new routes linking Vietnam with Japan in the coming three months which would facilitate the growth of tourism and trade between the two countries and across the region. The new routes include Osaka-Hanoi, Osaka-Ho Chi Minh City and Tokyo-Hanoi.

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European Union-Singapore Free Trade Agreement Spurs Vietnamese Economic Growth

European Union-Singapore Free Trade Agreement Spurs Vietnamese Economic Growth

BRUSSELS, BELGIUM: HSBC Vietnam has reported that the recently established European Union-Singapore Free Trade Agreement (EUSFTA) is the first free trade agreement (FTA) that was conducted between the EU and an ASEAN country and it signifies a significant moment for the economies of Singapore and the EU as well as Vietnam, which is currently in negotiations with Europe on a similar FTA.

The EUSFTA, which would remove all tariffs and decrease non-tariff barriers between Singapore and Europe, will allow for manufactured goods to have ASEAN cumulation. This means that selected inputs, especially those from Vietnam, that are sourced by Singaporean businesses from ASEAN member states will also come under Singapore’s zero tariff regime with Europe.

Winfield Wong, Head of Wholesale Banking at HSBC Vietnam has commented that with the EUSFTA in place, Singapore and the ASEAN region including Vietnam will be impacted in areas like electronics and pharmaceuticals. Additionally, a large proportion of Singapore products have components that are produced in other ASEAN countries, with ASEAN ranking in as the largest exporter to Singapore – just in 2017 alone, Singapore had imported US$71.06 billion worth of goods from ASEAN. In particular, common Vietnamese exports to Singapore includes computers, electronic products, machinery and equipment and parts.

Currently, Singapore is the third largest trade partner to Vietnam in ASEAN and the country’s tenth biggest trade partner globally. Singapore is also Vietnam’s third largest foreign investor and the country’s highest spending ASEAN investor, with a total investment value of US$43 billion invested in over 2,000 Vietnamese projects in areas such as manufacturing, energy, logistics and services.

Moving forward, the EUSFTA will serve as a template for future EU-ASEAN FTAs especially as the EU continues negotiations towards an FTA with Vietnam, Indonesia, Thailand and Malaysia. As of July 2018, the EU and Vietnam have already agreed on the final text for the EU-Vietnam Free Trade Agreement and the EU-Vietnam Investment Protection Agreement. This adds on to Vietnam’s current status as the EU’s second biggest trading partner in  ASEAN after Singapore. Similarly, as ASEAN grows in its role as the supply chain hub for European companies, the region is expected to benefit from the FTAs that have been established.

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Siemens Partners With VinFast To Develop First Made-In-Vietnam Automotives

Siemens Partners With VinFast To Develop First Made-In-Vietnam Automotives

Siemens has announced that VinFast has selected a suite of tools from its PLM Software to help realise their plans for next-generation automotive and transportation design. Siemens will be providing a digitalisation solution across the entire automotive OEM value chain, which can help enable VinFast to meet the company’s goals of creating the first Vietnam-made automobile and eScooter brand, and promote the development of the industrial and manufacturing sector in Vietnam.

Through Siemens’ software, VinFast is intending to take advantage of a connected digital twin across both design and manufacturing. The company also plans to use an integrated digital platform including the Teamcenter portfolio for digital lifecycle management, including the Teamcenter solution for product costing to support cost and value engineering, and the Tecnomatix portfolio, the industry-leading digital manufacturing software, combined with SIMATIC IT UA for Discrete Manufacturing covering the MES (Manufacturing Execution System) layer. Teamcenter connects the digital twin with a consistent digital thread, which can help VinFast increase speed and flexibility in product development, optimise manufacturing processes and use the insights gained from product and plant operations to improve future performance.

“Using the combined power of both product lifecycle management and manufacturing operations management technology is a key part of our digitalisation journey,” said Jason Buxton, chief information officer at VinFast. “To drive innovation within the automotive industry, it is essential to have the right technology in place. We feel that Siemens’ best-in-class solutions can empower automakers and the vehicle electrification supply chain to reduce development time and deliver high-quality solutions, with the ability to adapt to changes easily at every stage of the process.”

VinFast recently announced to the market that the company is also launching the first Vietnamese electric car. Using a connected PLM and MES digital enterprise solution will prove to be critical to achieving this goal. By creating a digital enterprise, VinFast can take advantage of new and disruptive technology across each phase of their operation to reduce cycle time, increase yield and foster new business opportunities.

“Siemens PLM Software is proud to form this excellent partnership with VinFast in the first national car project in Vietnam to help VinFast accelerate its innovation cycle,” said Alex Teo, managing director and vice president of Siemens Industry Software for South East Asia. “The vast portfolio of Siemens solutions that VinFast plans to deploy is a demonstration of the trust our customers place in our proven capabilities in taking products from the digital world to the real world.”

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Trade War Pushes Apple’s Manufacturing From China To Vietnam

Trade War Pushes Apple’s Manufacturing From China To Vietnam

The ongoing trade war between the U.S. and China has disrupted global supply chains and pushed smartphone production to Southeast Asia. According to the Nikkei Asian Review, GoerTek has already announced its intention to shift production of Apple’s wireless earphones from China to Vietnam to evade tariffs and political tensions, with the company kickstarting the process by seeking input from its suppliers on the feasibility of shipping the necessary materials and parts for Apple’s AirPods directly to Vietnam. Although further discussions with Apple is still required to finalise this decision, GoerTek currently already has a production facility in northern Vietnam which produces wired headsets for iPhones.

Apple products such as AirPods, the Apple Watch and the smart speaker, HomePod, have been exempted in initial tariffs involving US$200 billion worth of Chinese goods, however, Trump has already threatened to impose tariffs on an additional US$267 billion worth of products from China in the near future. This would mean that the value of Chinese products that would be impacted by tariffs will reach US$517, and this would exceed the value of Chinese imports to the U.S. in 2017 that were worth US$505 billion.

Meanwhile, Cheng Uei, a supplier for Apple’s and Andriod’s chargers and connectors has commented that it is also considering shifting production back to Taiwan as well as Southeast Asian countries such as Thailand, Vietnam and the Philippines due to the trade war. Although this process also invites its own set of challenges, as Chairman T.C. Gou has elaborated that leaving China will mean the disruption of established supply chain networks and Chinese tax incentives and investment policies.

As of now, China constitutes Apple’s most important manufacturing base and functions as an important consumer market for the brand with sales from the country representing 20 percent of the company’s annual revenue.

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Universal Robots Encourages Vietnam’s Robotics Development During 25,000 Cobot Milestone

Universal Robots Encourages Vietnam’s Robotics Development During 25,000 Cobot Milestone

SINGAPORE: Universal Robots (UR), the pioneer and market leader in collaborative robots (cobots), has cemented its market leadership after hitting 25,000 cobot sales.

To celebrate this significant milestone, the company awarded ten of its 25,000 global customers a Gold Edition cobot. The lucky winner in Southeast Asia is Vietnam’s Vinacomin Motor Industry Joint Stock Company (VMIC), which was presented with the UR10 cobot on 9 October 2018. The special edition cobot has the joints painted in a rich, gold-coloured finish, a refreshing take on UR’s iconic blue and grey cobots.

Based in Vietnam’s Quang Ninh province, VMIC is engaged in the manufacture, assembly, maintenance and repair of transportation vehicles. The Company’s leading products are heavy duty trucks used in the delivery of mining products, together with light trucks and other utility vehicles. Other business activities include the production of automotive parts, industrial machinery and equipment trading, the construction of industrial and civil infrastructure, as well as the provision of technical consulting services.

“We are thrilled to receive the Gold Edition UR10 cobot which will be deployed to assist in the production of parts for transport vehicles, working alongside our employees,” said Pham Xuan Phi, VMIC Chairman and CEO.

“The need to improve productivity and reduce operational cost led us to opt for cobots as the ideal solution. Since deploying our first cobot in July this year, we have already seen productivity surge 30 per cent and improvements in product quality and takt time stability,” he added.

“We couldn’t have reached this historic 25,000-cobot landmark without excellent customers like VMIC,” said Sakari Kuikka, APAC Regional Director of UR. “With this, we celebrate not just the success of UR in empowering customers, but also the successes of our customers in innovating and changing their workplace with cobots. The Gold Edition cobot reflects our continued commitment towards making the unlimited potential of robotics accessible for all.”

Present in Vietnam since 2016, UR distributes cobots through local distributor and system integrator partners – Servo Dynamics Engineering and Tan Phat Automation JSC. Cobots are deployed in multiple industries including automotive, electronics, textile, footwear and food processing sectors.

Robotics Key to Vietnam’s Industry 4.0 Journey

Vietnam has identified robotics as one of the pillars of Industry 4.0 as automation becomes integral for businesses to remain competitive. However, 82 percent of Vietnamese businesses have yet to take steps to prepare for Industry 4.0 while just 10 percent are ready. Furthermore, a report by the Ministry of Industry and Trade showed that interest among enterprises to invest and apply new technologies was still modest.

Acknowledging this, the government has been aggressively focusing on developing initiatives and legislation to speed progress in the era. Among the efforts are the 2011 – 2020 Strategy for Science and Technology Development to enhance economic competitiveness and speed up industrialisation, prioritising the importance of industrial robots and hi-tech automation.

The government has also identified other measures including collaborations between technology enterprises and science & technology organisations to consult and support local firms as appropriate steps to ensure the successful acceptance of robotic opportunities.

The Vietnamese economy is one of the fastest growing in the world. The country recorded a 6.8 per cent increase in GDP last year on the back of a humming manufacturing sector. The economy in 2017 was worth VND5 quadrillion (USD223 billion).

Cobot Adoption Rising

Cobots are now the fastest-growing segment of industrial automation, expected to jump tenfold to 34 percent of all industrial robot sales by 2025, according to the International Federation of Robotics.

The automotive and electronics industries are big users of cobots globally. The market value for cobots in the global automotive industry was USD23.5 million (547 billion dong) in 2015 and is projected to reach USD 470 million (10 trillion dong) by 2021, at a CAGR of 64.67 percent between 2015 and 2021. Electronics is the second largest cobot integrator, accounting for 18 per cent of global demand in 2015. By 2021, electronics is forecast to invest approximately USD 480 million (11 trillion dong) in cobots.

Since the sale of the first cobot in December 2008, UR cobots have been utilised in various industries ranging from food production to scientific research, taking on tasks that include industrial assembly, pick and place and even quality inspections. Today, UR is the unrivaled cobot market leader with a 60 percent global share, selling more cobots than all other robot makers combined.

Unlike conventional robotic solutions, UR’s cobots are designed to work hand-in-hand with operators with maximum efficiency, opening up more opportunities for human-robot collaboration in the workplace. These highly versatile cobots can take on a wide spectrum of tasks and have the fastest payback time in the industry, making them a viable option for small-scale businesses where conventional options may be too expensive.

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Manufacturing And Processing To Be Driving Force For Vietnam’s 2018 Trade Surplus

Manufacturing And Processing To Be Driving Force For Vietnam’s 2018 Trade Surplus

In accordance to Vietnam’s Cong Thuong newspaper, the country’s export revenues in 2018 is projected to reach a value of US$237 – 239 billion with an expected 10 – 12 percent year on year increment, while FDI investments reached US$127.84 billion, increasing by 14.6 percent. This is mainly attributed to the growth in the manufacturing and processing industry which constitutes a majority of the country’s exports, with smartphones comprising the largest export pool.

In March, Vietnam’s export turnover reached a high of over US$21 billion while in August, export turnover peaked at US$23.48 billion. Of which, US$5 billion were from smart phone exports over those two months.

The local government is also looking to reduce import tariffs to 0 percent due to free trade agreement commitments and this has increased the competitiveness of Vietnamese products, especially when coupled with the improvements in the local business environment. Also, while the US-China trade war has yet to be resolved, the Ministry of Industry And Trade will be monitoring it to reduce its impacts on Vietnam’s trade activities.

On the whole, Vietnam witnessed a trade surplus of US$5.39 billion in the January – September period, of which the FDI sector contributed for a trade surplus of US$23.65 billion, and domestic enterprises constituted a trade deficit of US$18.26 billion.

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Hanoi To Develop Smart City

Hanoi To Develop Smart City

VIETNAM: Amid Hanoi’s rise as an economic, political and cultural centre of Vietnam, the city looks set to join the smart urban development trend. A move that will be supported by the local government, experts as well as the city’s economic potential, human capital and technical infrastructure.

In fact, developments for the smart city has already begun due to the development of an iParking mobile search facility, a Timbuyt app for searching and taking buses as well as a smart map for the location of flooding points.

However, in order to fully achieve the development of a smart city, Chief Architect of Viettel’s Smart City Group, Le Quoc Huu has recommended that the city develop a comprehensive infrastructure layout and urban management plan so that an integrated system of data collection, analysis and management can be attained. Similarly, experts have also highlighted that the city will need to ascertain its technological needs and how a new information network can be integrated into the city’s existing infrastructure before the city’s technical foundation can be established. Along with that, experts have also commented that the city would require open mechanisms to ensure that information and data can be exchanged between itself and other localities.

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Electronics Manufacturing Largely Attributes To Vietnam’s Growth In 2018 And 2019

Electronics Manufacturing Largely Attributes To Vietnam’s Growth In 2018 And 2019

VIETNAM: According to economists from Standard Chartered, Vietnam’s GDP is expected to continue growing and is projected to reach seven percent in 2018, making it the fastest growing ASEAN economy for the year. Despite a small projected depreciation in the VND in early 2019, the growth in the country’s economy is expected to continue, particularly within the electronics manufacturing sector, and the VND is expected to end 2019 with a stronger finish than the USD.

This growth in GDP can be largely attributed to an increase in electronics manufacturing as well as contributing factors such as a growth in the agricultural industry and rising consumer demands. Based on Standard Chartered’s most recent marco economic research report, the country’s manufacturing industry is scheduled for another year of double-digit growth with a strong positive outlook for electronics exports as well as the potential for a trade surplus. This is further enhanced by strong FDI inflows which are projected to be valued at US$17billion per year from 2018 to 2020.

Vietnam’s services sector, which comprises about 40 percent of the economy, is also expected to grow in the second half of 2018 after its increase by seven percent in the first half of the year. While the growth in the business process outsourcing (BPO) sector, due to the presence of a educated, young and low cost labour force, will also serve to support the services sector.

Meanwhile, The World Bank has retained its GDP forecast for Vietnam to be 6.8 percent in 2018 while the Asian Development Bank has reduced the figure to 6.9 percent from its prior projection of 7.1 percent.

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VinFast To Manufacture Made-In-Vietnam Cars For Global Market

VinFast To Manufacture Made-In-Vietnam Cars For Global Market

VIETNAM: Vingroup, Vietnam’s largest private corporation, is looking to add automobile production into its impressive repertoire – one which already covers the non profit sector as well as the real estate, shopping, amusement park, convenience shop and housebuilding industry.

During this year’s Paris Motor Show the company had unveiled two of its LUX vehicles – an all-new sedan and a crossover inspired by the Vietnamese people – and plans to go global with its production output in the future. Based on a novel architecture that was developed by VinFast, the LUX vehicles were co-created alongside global leaders such as Magna Steyr and Bosch with the intention of an expedited development-to-market cycle.

Kevin Fisher, Vice President of Engineering at VinFast has said, “Our partnership strategy will enable us to achieve two crucial engineering imperatives – quality and timing”.While prototype testing of the two vehicles that have been showcased is currently underway, VinFast’s automobile manufacturing facility in Vietnam is already opened for operations and the company intends to develop a city car through its partnership with General Motors (GM) while also expanding its eScooter line through the addition of a small electric car by 2019.

Through its partnership with GM, VinFast has also attained exclusive distribution rights for Chevrolet-branded vehicles in Vietnam. Similarly, although additional technology agreements between GM and VinFast are still being discussed, most of GM’s operations in Vietnam will be transferred to VinFast, such as the company’s large Hanoi plant which is scheduled to be transferred before the end of 2018.

Moving forward, VinFast is also collaborating with Siemens to manufacture electric buses for the Vietnamese market which are scheduled to be sold domestically in June 2019. A vision that is aligned to VinFast’s supply chain for electric mobility in its operations.

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