Given the government’s national agenda of transforming the country into an industrial country by 2020, various policies and programs have been launched to recognize this ambition, from tax incentives to advantages in terms of investment conditions, facility establishment, etc. Manufacturing is expected to continue to be the country’s core sector.
The highest potential manufacturing sectors are machinery/apparatus & parts, textiles, electronics, food and beverage, and furniture. These industries have a high demand of solutions and machinery for automation, energy efficiency, quality & safety, and economic control. Given Vietnam’s growing manufacturing activities and the country’s remaining weak supporting industries, the country has a growing demand for imported machinery and this product is also the biggest import product from EU.
Meanwhile, Vietnam is working to grow exports within electronics exporting given its status as the new manufacturing hub of many global electronics manufacturers like Samsung, LG, Microsoft Mobile, Intel, etc.
The textile industry has a significant role in both export and import. Nearly 14% of Vietnam’s export to the EU comes from textiles and garments, and this is expected to double in 2020 following the EU – Vietnam Free Trade Agreement (EVFTA).
Other key manufacturing industries are food processing and wood sourcing. While food processing has remains the leading segment among manufacturing sectors with contribution of above 20% to total manufacturing output; furniture is one of Vietnam’s biggest export sectors, and the country is one of the ten biggest wooden furniture sourcing countries worldwide.
In accordance with the country’s orientation toward industrialization, the level of capital intensive production is increasing with large investments for automation demand. Potential clients for Swedish companies are foreign firms moving productions to Vietnam and local producers, especially the latter.