In the framework of MTA Hanoi 2019, the largest international trade show for precision engineering, machine tools, and metalworking taking place on October 16-18, the conference “From Manufacturing in Vietnam to Made-in-Vietnam Products” attracted a great deal of interest.

Assessing the opportunities and challenges for the Vietnamese manufacturing industry, Suan Teck Kin, head of research, executive director of global economic and markets research at United Overseas Bank (UOB) said that the US-China trade conflict remains a a powerful impact. Tensions even widen to other sectors such as technology, investment, and even capital flows.

Companies are worried about the effects of tariffs and other forms of trade protection. Moving the supply chain will take a long time, and many companies are actively planning to reduce production from China to minimise negative tax impacts, but are also considering diversifying business and markets.

Giants like Apple, Intel, Sharp, LG, or Bosch, among others are also making initial changes in production flows. Specifically, Apple’s suppliers in Vietnam have increased from 16 (2015) to 22 (2018) while in September 2019, Samsung officially closed its last factory in China, after which Vietnam has become the country with the largest number of suppliers of this brand.

Hans Kerstens, head of sales and marketing at Deep C Industrial Zones, said, “Industrial real estate is a pillar of any developing manufacturing economy.”

Accordingly, by 2020, Vietnam expects to reach the number of 500 industrial zones with a total area of 500,000ha.

In recent years, the sharp increase in foreign direct investment, along with the transformation of value chains, has opened a bright future for the industrial real estate market in Vietnam. The booming logistics market and preferential policies from free trade agreements (FTAs) are arguably the important factors that create the motivation for industrial real estate development.

Therefore, investors choosing an industrial zone to open a factory in Vietnam need to consider several factors such as location, accompanying utilities, customer support services, the supply chain, tax incentives, and labour resources. Investors should deeply understand the advantages and disadvantages of each industrial park to make the optimal choice.

At the conference, speakers focused on rule of origin at the main panel. They advised businesses to study Decree No.31/2018 / ND-CP dated March 8, 2018, guiding the law on foreign trade management on the origin of goods, providing rules to certify Vietnamese origin.

According to data from the General Statistics Office of Vietnam, the total import-export turnover of the first five months of 2019 is estimated at about $202 billion. The US is Vietnam’s largest export market with a turnover of $22.6 billion, up 28 per cent over the same period last year with high export turnover in phones and components up 109.2 per cent. Electronics, computers, and components were also up 58.4 per cent. Textiles and garments increased by 9.8 per cent.

MTA Hanoi 2019 gathered over 200 businesses as well as hundreds of visitors.