Vietnam emerges as forerunner in global nearshoring trend

Illustrative image (Photo: VNA)

Hanoi – Vietnam has emerged as a leading destination for companies relocating their production facilities, aiming to protect supply chains from potential disruptions, according to an article published by Brazil’s riotimesonline.com on November 17.

The newspaper cited recent data from S&P Global Market Intelligence as saying that the landscape of global manufacturing is changing rapidly. Vietnam has emerged as a frontrunner in global nearshoring trend, outpacing even Mexico.

Real-world examples underscore Vietnam’s attractiveness. Samsung has invested heavily in Vietnamese factories for electronics production. Nike and Adidas have shifted substantial production from China to Vietnam. Intel has also established a significant presence with a chip plant in Ho Chi Minh City.

Over 35% of Vietnamese firms reported increased demand from multinational manufacturers in the past year. This contrasts sharply with Mexico, where only 15% of companies experienced similar growth. The survey, conducted in May 2024, highlights Vietnam’s growing appeal to international businesses.

The article pointed out several factors behind Vietnam’s success in this area, saying that the country’s geographical location provides easy access to major Asian markets. Labour costs remain competitive, attracting companies looking to optimise their expenses. The Vietnamese Government has also enforced policies that support foreign investment.

Vietnam’s workforce also plays a crucial role in this success story. The country ranks 9th among 60 nations in ManpowerGroup’s Total Workforce Index, indicating a reliable and skilled labour pool. Such a workforce is essential for companies considering relocation, it said.

According to the article, experts estimate a 10-12 year period for investment relocation. This timeframe adds urgency to the competition between emerging manufacturing hubs. Countries must act swiftly to attract and retain these investments./.