Vietnam's Business Landscape Flourishes in First Two Months of 2018
Confidence in Local Enterprises Soars
Confidence in local enterprises continues to soar, with a surge in production and a record number of newly established enterprises and registered capital inflow in the first two months of this year.
Record-Breaking Enterprise Registration
The Vietnamese government reported a remarkable milestone for the first two months of 2018, despite the Lunar New Year holiday, with over 18,700 newly established enterprises registered, totaling a record sum of $8.97 billion. This marks a notable increase of 29.4% in the number of enterprises and 29.3% in registered capital compared to the same period last year. When considering the $15.33 billion investment increase of already operational firms, the total capital injection into the economy amounts to $24.3 billion, up by more than 40% from the previous year.
Sectors Driving Growth
These newly established enterprises span various sectors, with the wholesale and retail sector taking the lead, indicating a boost in the domestic consumer market. As reported by the General Statistics Office (GSO), this surge in confidence among enterprises has translated into an expansion of production, evident in the country's index for industrial production, which climbed by 15.2% year-on-year (YoY) in the first two months.
Manufacturing and Processing Sector Expansion
A significant contributor to this growth is the manufacturing and processing sector, which has expanded by 17.7% YoY, accounting for up to 8% of the industrial sector's growth. For instance, Viet Hung Plastic Company, a key vendor for Samsung, is expanding its production facilities in Dong Nai province and Ho Chi Minh City, with an investment of approximately $50 million.
Sectoral Growth
The electronics spare parts manufacturing sector witnessed a remarkable surge of 38.3% in the first two months of 2018, largely attributed to Samsung's increased domestic display production. Other sectors experiencing substantial growth include the metal sector (21.1%), furniture sector (20.2%), and cement sector (19%).
Role of VMF
The CEO of VMF (Vietnam Manufacturing Federation) underscores the company's commitment to breaking barriers between international businesses and local factories by providing manufacturing outsourcing services and supply chain management solutions. Optimism for the future is expressed, citing favorable government policies and plans to expand the company's global presence through participation in manufacturing trade shows in the US and Australia.
Positive Outlook for 2018
This confidence mirrors the broader sentiment within Vietnam's business community, signaling a strong start to 2018.
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