FDI firms make almost 100% of exported cellphones, components
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FDI firms make almost 100% of exported cellphones, components

Economy, Vietnam, Vietnam Finance News

VNA
Tuesday, June 20, 2017 – 10:54:00 Print

A view at the Samsung factory in Thai Nguyen where cellphones are manufactured. (Photo: VNA)

Hanoi (VNA) – Vietnam produced 34.3 billion USD
worth of cellphones and components for export in 2016, 99.8 percent of which,
or 34.2 billion USD, made by FDI enterprises.

According to the Vietnam Electronic Industries
Association (VEIA), exports of cellphones and components in 2016 and the first
few months of 2017 helped the country improve its trade balance and reduce the
trade deficit.

Foreign companies accounted for one third of the
country’s electronic firms but they make up 90 percent of the total export
revenue in electronics and 80 percent of the nation’s market share.

The low local content ratio in manufacturing may hold
back Vietnam’s economy, according to chief representative of the Japan External
Trade Organisation (JETRO) Hironobu Kitagawa.

He cited an example of Japanese enterprises in Vietnam,
where the localisation proportion made up 34 percent of the value of their materials,
components and accessories, while that in China and Thailand were 68 percent
and 57 percent, respectively.

Therefore, they have to import inputs from Vietnam’s neighours
such as China and Thailand, leading to bigger costs and risks, he added.

Japanese firms are looking for more local suppliers to
enhance their competitiveness and this will require the electronic industry in
Vietnam to increase productivity, strengthen supply chain and improve the localisation
ratio.-VNA

QBCA

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