Several major shoemaking factories stopped building factories in Vietnam

Vietnam is the largest production base for many shoe manufacturers, and Nike, Adidas, Uniqlo, H&M and other international brands are customers of these manufacturers.

But now…
Many technology giants enter Vietnam
Direct Compression of Shoe Industry


Today (July 3), according to a number of foreign media reports:

Suppliers of Apple, Dell, Google and Amazon want to set up factories in Vietnam to avoid tariffs, and they expect competition for land and manpower to intensify.

While technology giants such as Apple are seeking to relocate their production lines to Vietnam, shoemakers are slowing down and stopping expanding in Vietnam because of concerns about rising land and human costs in Vietnam.

The director of a Taiwanese shoe manufacturer said: “We are really a little worried about the entry of technology companies into Vietnam, thinking that this may increase the cost of recruitment and recruitment difficulties, but you can not always move production lines to cheaper countries.”
Many large shoemaking factories:
Stop expanding factories in Vietnam


According to Nikkei News, Roh Renjie, vice president of Taiwan’s big factory Ruhong, said that Ruhong would stop expanding production in Vietnam. “We will not increase the production capacity of its Vietnamese factories this year, but are still looking for investment opportunities in other countries.” At present, Ruhong’s production lines are concentrated in Taiwan and Vietnam. Ruhong’s customers include Nike, Under Armour and other brands.

A spokesman for the shoemaking giant Baocheng pointed out that the cost of land in Vietnam has been rising year by year and there is no sign of a decline; “In the long run, we don’t think there is much room for Vietnam’s productivity and manpower to grow.”
Baocheng made 326 million pairs of shoes last year, of which 46% were made in Vietnam, but the proportion dropped to 43% in the first quarter of this year and increased from 37% to 41% in Indonesia. Nevertheless, Baocheng believes that the transfer of production lines is the cure, and production automation is the cure.


In addition to the impact of the trade war, data from the Vietnamese government show that the minimum wage in Vietnam has risen from 1 million Vietnamese Dong ($43) a month to 418 million Vietnamese Dong in the past decade. The government also requires manufacturers to raise wages by more than 10% annually.
Population base is hard wound
Vietnam will also “change cages for birds”


Why has Vietnam changed so dramatically in just a few years?

Of course, the population base is too small. Only 92.7 million, less than 100 million.


In Myanmar and Cambodia, there are only 67 million people, less than one Vietnam.

According to the shoe industry data of the shoe giant Baocheng, it is known that the hottest place in recent years is Indonesia. Indonesia’s dominant population is 262 million, directly killing the total of the three countries. According to media reports, Indonesia has a hidden population of 600 million. This will increase the transfer intention of the middle and low-end manufacturing industry.


Presumably you remember that the “cage for bird” introduced in China in the past few years is to use administrative means to force low-end manufacturing industry to withdraw, to make way for a better prospect of high-tech industries.

At present, due to the restriction of population base and the entry of global high-tech giants, Vietnam must have put the “cage for bird” on the agenda.

So there’s no surprise in the decision of the shoe giants.

Vietnam has been one of the big winners since the trade war. Vietnam’s exports to the United States surged 38% in the first four months of this year, and suppliers of technology cafes such as Apple, Google and Amazon are considering moving to Vietnam.
Latest data:
Nearly 67,000 new Vietnamese enterprises were established in the first half of the year.

According to the Vietnamese General Bureau of Statistics, in the first half of 2019, the number of newly established enterprises reached nearly 67,000, a new five-year high, with registered funds reaching 8.6 billion Yuedong. The number of enterprises and registered funds increased by 4% and 32% respectively from the same period last year. The number of employees in newly established enterprises was 649,000, up 27.6% from the same period last year.

According to Pei Yingjun, Director of the Business Registration Administration of the Ministry of Planning and Investment, the wave of entrepreneurship continues to be the main channel for raising funds and improving economic productivity.

In addition, the number of restored enterprises was 216,000, an increase of 31.4% over the previous year, raising the number of newly established and restored enterprises to 88,600 in the first half of the year.

In addition, in June this year, there were 12 960 newly established enterprises in China, with a total registered value exceeding 190 trillion yuan.

The General Administration of Statistics also indicated that in the first half of the year, the number of enterprises that had suspended production for a period of time was 211,000, an increase of 17.4% over the same period of last year; the number of enterprises that had gone through disintegration procedures such as suspension of production was 218,000, and the number of enterprises that had been recalled production and operation licenses was 11,000, accounting for 50.3% of those that had gone through disintegration procedures such as suspension of production; and the number of enterprises that had notified dis The quantity is 6400. In the first half of the year, 7,800 enterprises completed the disintegration procedures, an increase of 18.1% over the same period last year.

Post time: Jul-08-2019
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