Evacuate Vietnam! Suddenly Found Serious Problems, The Supply Chain Is Far Less Than China!

The problem is serious.

The supply chain is far less than China.

In recent years, under the tide of globalization, Vietnam has gained the favor of many foreign capitals through its role in manufacturing industry.

As more and more big technology companies plan to find cheaper production sites, Vietnam's ambitions are stronger. However, Vietnam's industry has different views on this.

According to a 30 day report, North Vietnamese technology, a component manufacturer in North Vietnam, revealed that although Vietnam attracted a lot of foreign capital, many raw material manufacturers did not choose to build factories in Vietnam, which made it difficult for Vietnamese manufacturers to compete with Chinese suppliers.

It is reported that the company is responsible for producing plastic parts including earphones for Canon, Samsung and other giants, but even with such small components, Vietnamese manufacturers are still unable to complete their manufacturing independently. The enterprise must purchase 70 to 100 tons of plastic materials from China every month to complete the order. In response, North Vietnam technology said: "when we buy raw materials, our products are already 5% to 10% more expensive than China."

One of Vietnam's main export sectors, textiles and clothing, is also dependent on imports from China. More importantly, despite the fact that the proportion of young labor force in Vietnam is not low, the fact that the total population is less than 100 million is destined to make it difficult for Vietnam to become a new manufacturing center overnight. In addition, North Vietnam technology acknowledged that Vietnam's production quality and efficiency problems hampered the progress of manufacturing in Vietnam, which is one of the reasons why Apple chose to build high-end production lines in China but not Vietnam.

Nike factory evacuate Vietnam

The next three years will not be Vietnam's new plant.

Recently, according to Chinese media in Taiwan:

In 2016, Nike, a Lululemon OEM, began to expand to Vietnam. At present, he decided once again that he could not put all his eggs in Vietnam.

At present, the production line of Confucianism is concentrated in Taiwan and Vietnam. Our customers include Nike, Under Armour and other brands.

"Considering the global situation, the most important thing now is to diversify," Hong Zhenhai, chairman of Ru Hong, said in an interview. "Customers also want us to diversify risks rather than concentrate on production in one country. Now 50% of our products are produced in Vietnam, so we are not doing enough."

　　 As trump gradually focused on Vietnam and showed a tough stance, he called Vietnam a trade abuser and imposed high tariffs on steel imports from Vietnam. Enterprises realized that no country could be a place of production once and for all.

Therefore, Hong Zhenhai said he would not expand or increase factories in Vietnam in the next three years. In the short term, he will consider investing in new facilities in Indonesia or Kampuchea, and is expected to invest 80 million US dollars in Southeast Asia and establish 120 production lines.

Xing Yalei, an analyst with Cathay Pacific Securities, said that the decentralization of the supply chain will help reduce the risk of customs duties and may even help reduce long-term costs. Such diversification strategy seems to work, and revenue in 2018 grew by 44% compared with the previous year.

Confucianism regards flexibility as the key, and the uncertainty of tariff makes it more conservative for customers to place orders. Ru Hong's fast mobile production base keeps flexible to get customers' favor.

　　 Many technology giants enter Vietnam

Will directly crush the shoe making industry.

In early July (July 3rd), according to a number of foreign media reports,

Suppliers of apple, DELL (Dell), Google and Amazon want to go to Vietnam to set up factories to avoid tariffs. It is expected that the competition for land and manpower will intensify.

While Apple and other technology giants seek to move their production lines to Vietnam, the shoemaking industry has slowed down and halt its expansion in Vietnam because of worries about the current increase in land and manpower costs in Vietnam.

The head of a garment manufacturer in Taiwan said: "we are really worried that technology companies will enter Vietnam and think that this may increase recruitment costs and recruit difficulties, but you can't always shift production lines to cheaper labor countries".

　　 I didn't expect it! Those runaway Chinese textile and garment factories have returned from Vietnam.

According to Hongkong's South China Morning Post, July 12th:

The Sino US trade war has prompted some Chinese shoes and clothing factories to move to Vietnam. A shoe factory owner gave up a factory that invested 5 million yuan in just one year.

Zhou Ping has been running a shoe and clothing factory in Dongguan, Guangdong, China's manufacturing center. In May 2017, Zhou and another factory owner rented a 1200 square meter factory in Vietnam's Pingyang province to produce accessories for an American clothing brand.

He said: "we thought it was a good idea at that time, because on the surface, Vietnam's factories and manpower were lower than that of Dongguan, and we saw more and more European and American customers in Vietnam. A large number of upstream factories moved there, so we built 4 production lines in Vietnam, employing 110 locals.

　　 However, by October 2018, due to rising costs and "cultural problems", Zhou had to stop and withdraw. Zhou said: "the biggest problem is the efficiency gap between China and Vietnam. Vietnamese workers do not work overtime at all, most of them are unskilled, resulting in low productivity and late delivery time. I believe that the training of skilled workers in Vietnam will not be enough for us and small businesses.

John Wang, another Dongguan shoe factory owner, invested 7 million yuan in a factory in Vietnam in 2015. Two years later, he stopped producing and sublet the workshop. Wang said, as far as he knows, the other 6 Dongguan shoe factory owners have regretted moving to Vietnam and are now planning to "give up".

　　 An executive at a Taiwanese equipment manufacturer said that the company moved many of its production from Guangdong to Hu Zhiming, and found it difficult to recruit and retain employees. "Now, the workforce is hard to stabilize, and the job market is very hot. Vietnamese workers are jumping about." As more companies enter Vietnam, the situation will be even more serious.

As a matter of fact, although Vietnam has been favored by foreign investors in recent years, there are not many foreign companies that regret "setting up factories in Vietnam", and even many American companies are considering the decision to "recover" the establishment of factories in Vietnam.

In many Southeast Asian countries, Indonesia has more population than Vietnam. The labor cost of Kampuchea, Burma and Laos is lower than that of Vietnam, while the workers in Philippines and Malaysia have higher education level than Vietnam. However, Vietnam has attracted the attention of foreign capital. One of the reasons is that Vietnam has learned the mode of China's open investment, but for Southeast Asian countries, which accounted for only a quarter of its total exports by a Samsung Korean enterprise, the road to the rise of manufacturing industry is still difficult.