ibsm pregroup proj(final!)
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Vietnam’s Industries
& Industrial Park
Done By: Plan
B
Industrial
Parks..
Location of theIndustrial Parks
71 industrial parks including 67 industrial zones (IZs), 3 export processing zones (EPZs), and 1 high-tech park
Among these, almost all projects (93%) are engaged in manufacturing while the rest provide infrastructure services inside these parks
Noi Bai Industrial Zone
Dai An Industrial Zone
Phu Dien Industrial Zone
Vietnam’s infrastructure
Investing more than one third of its GDP
9% goes into infrastructure
Seaports and electric power - most important factor now for firms considering investment in Vietnam
Large scale infrastructure such as (ports, airports, major highways, national power grids) and local infrastructure such as (road access, apartments, water plants, power substations, etc.) are both necessary in the long run.
Investment incentivesTax Exempt from payment of import duty
on equipment, materials, means of transportation and other goods for implementation of investment projects in Vietnam.
Entitled to investment incentives in corporate income tax under the law on corporate income tax.
LandInvestors shall be entitled to
exemption from or reduction of land use tax, land use fee, land rent.
Investment incentives Carry forward losses Losses by the investors can be carried forward to the
following year. The amount of such losses shall be set off against taxable income for the purposes of corporate income tax
Construction of infrastructure systems inside fences of industrial zones, export processing zones and high-tech zones
Top Currency
Earners..
Rice
World’s 2nd leading rice exporter
Supplies 5.2 million tones of the commodity to the world market annually
Year 2008 revenue= 610 million USD
Crude OilMajor crude oil exporter in Asia
World's 30th largest oil-producing nation.
40 years of experience in operation and development
Crude Oil US$2.5 billion to
construct FIRST oil refinery
Named Dung Quat, located in the central province of Quang Ngai
Annual processing capacity of 6.5 million tones
Significant moment in the country's development and energy security
Garment and TextilesWorld's 16th biggest garment and textile exporter
Largest manufacturing export in Vietnam
Government encourages the establishment of more garment enterprises to create more jobs
List of 15 Asian countries importing Vietnam's textile
Order Country Value Import percentage
1 Japan 325,048,758 46.551%
2 Taiwan 197,529,175 28.289%
3 South Korea 75,953,429 10.877%
4 Singapore 55,796,225 7.991%
5 Hong Kong 26,629,782 3.814%
6 Malaysia 7,570,083 1.084%
7 Laos 3,151,433 0.451%
8 China 2,599,437 0.372%
9 Thailand 2,145,586 0.307%
10 Philippines 967,007 0.138%
11 Combodia 590,550 0.085%
12 Iran 106,202 0.015%
13 Iraq 92,995 0.013%
14 India 73,013 0.010%
15 Indonesia 12,390 0.002%
Total 698,266,065 100.00%
So
urc
e: G
ener
al
Dep
art
men
t of
Cust
om
s.
Footwear
Sold overseas, mainly in the EU, Japan and the U.S
Footwear revenue worth more than us$3 billion in 2005 yearly rise of 11.7 per cent
Footwear
European Union anti-dumping measuresNumber of leather shoes exported
decreased from 120 million (2005) to 107 million pairs (2006) and slumped further to 91 million pairs (2007)
Diversion: Strive to penetrate more deeply into Japan instead
Export revenue suffered a 6.3% decrease
Anti dumping law is…
Disallowing foreign producers to sell their products to an importer in the domestic market at prices lower than in their own national markets, or at prices below cost.
The sale threatens to injure a domestic industry producing similar products and retards the establishment of potential industries.
It is a form of price discrimination between two national markets.
Electronic Goods
Lack of strategic planning
Over-focused on employing cheap, low-skilled Vietnamese workers
Failure to train high-tech engineers
Serious imbalance in production
Seafood
Main Products
Shrimps 50%
Pangasius 25%
Squid, Cuttlefish & Octopus 7%
Dried Seafood Products 5%
Others 13%
Seafood
23%
33%
16%
28%
Seafood Export Markets
USA
Japan
European Union
Others
Wooden products
5th largest hard currency earner
2008’s export value of $2.8 billion
5th largest wood-product exporter in the world after China, Malaysia, Indonesia and Thailand.
Drastic drop in exports in 2009 due to global downturn
(U.S-> core importer)
Plastics
Industry..
Introduction
50 years of history
Infant stage of production
2700 plastic corporations in Vietnam
Main center of distribution: Ho Chi Minh City
In the recent years, demand for Vietnam’s
plastic goods had increased significantly as compared to other
countries.
Has an annual growth rate of 30%!
Introduction
Industry Characteristics
Labor intensive industry
Unskilled workers
Outdated machines
Low level of
Technology
Plastic Import Industry
2nd largest importer of raw plastic materials in Asia in 2004
1.5 – 2 million tons
Major exporters to Vietnam: China, South Korea, Japan and Taiwan
Types of imported raw materials: Polyethylene (PE), polypropylene (PP), polyvinyl chloride E (PVCE) and polyvinyl styrene (PS)
Plastic Export Industry Clients of Vietnam’s plastic goods:
Cambodia, Laos, India, Sri Lanka, Japan, China, the EU, Taiwan and the US
Automotive
Industry..
IntroductionOne of the youngest in the ASEAN region
local assembling of cars started at the end of the last century
open for imports of new cars on a larger scale only since 2003
used cars to a certain age maximum are allowed for import only since 2006
Low cost manufacturer of automotive components
Hence, Vietnam’s car penetration is one of the lowest in the world
Imports
To protect the local automotive industry
Import licensing scheme
High customs duties on CBUs
Various taxes and fees applicable when buying new cars
Pre-WTO
The government’s decision to
reduce tariffs on imported cars imports of used cars and their tariffs are also lowered
Hence, stiff competition between the car makers in Vietnam respond to these government’s new
rulings by immediately dropping their prices!
Pre-WTO
Gauged to be a potential yet underdeveloped market, the Vietnamese automobile industry is becoming increasingly attractive to the foreign carmakers
Hyundai publicized the transfer of its automobile engine production technology to its Vietnamese partner
An automobile factory, producing Hyundai buses and trucks, was inaugurated in northern Bac Giang province
Furniture
Industry..
Leading country in manufacturing furniture in the Asia market
Country’s fifth largest hard currency earner
Domestic wood processing industry
Inexpensive
High in quality
2,520 wood processing establishments
420 are foreign-invested
Export target for 2010 is US$3.2 billion
Specializes in production of outdoor and indoor furniture, mainly made of wood and aluminum
Employing 4,800 workers Exporting over 500 containers of wood
furniture each month
Headquarter in Ho Chi Minh City
•Since 2005
•980 Employee
• Total investment of
US$10 m
•Since 2004
•927 Employee
• Total investment of
US$7 m
•Since 1995
•858 Employee
• Total investment of
US$3m
•Since Aug 2001
•520 Employee
• Total investment of
US$15 m
KHAIVY HCMC
FACTORY
DUYEN HAI 1
FACTORY
KHAIVY QUINHON
DUYEN HAI 2
FACTORY
However..
Purchasing power of the US and EU market
(make up to 55% of imports)have lowered by 30% due to the global recession!
Export dropped drastically in 2009!
...So we will need
investment incentives to overcome this!
Investment Incentives
Government to stop collecting export taxes on wood products temporarily
Export promotion of wood products
Wood processors’ debt repayment periods to be extended
Companies to be provided with easier access to loans
THANK YOU !- Plan B
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