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Snapshot: Manufacturing in Vietnam, February 2024

Each month the-shiv provides a snapshot of the manufacturing sector in Vietnam covering the latest developments, key performance indicators, and government data.

Manufacturing news in February was somewhat limited with the Lunar News Year reducing production and seeing most businesses close up for at least a week. That said, there were a handful of developments worth noting.

For example, the Garmex Saigon saga escalated in February. The firm which once had 3,700 workers on its payroll, had just 35 staff at the end of 2023, and it was reported it had started selling assets to cover losses. This is after failing to secure any new orders for the firm in the fourth quarter of last year. Unfortunately, this was not an isolated case, with reports from a number of companies in the garment and manufacturing sector that times are not good. Unfortunately, at this point it doesn’t look like there will be much of a reprieve any time soon either.

In slightly more positive news, Vietnam’s electric car maker Vinfast announced it had broken ground on a new factory in India’s Tamil Nadu. At the same time it has asked India for import tax breaks on ready-made electric vehicles from its factory in Vietnam.

This, however, should be considered with a good dose of caution–Vinfast has made a number of big announcements with respect to new factories. There is a US$4 billion plant in North Carolina underway, a US$200 million assembly plant planned for Indonesia; and now the new US$2 billion project in Tamil Nadu. This is in the context of a company that is losing more than US$2 billion a year.

With this in mind, this latest announcement may be indicative of a strategy to secure better market access conditions for its vehicles. Specifically, to build–or at least promise–a factory in exchange for tax breaks.

On that note, also in February, North Carolina’s The News and Observer ran a breakdown of the tax incentives Vinfast is receiving with regard to the factory it is building in North Carolina. 

Essentially, there are a combined US$1.25 billion in incentives on offer for Vinfast under the understanding that the firm will create 7,500 jobs and invest US$4 billion in its factory.

Of note, there was about US$325 million in funds provided up front for site preparation and the upgrade of infrastructure to service the plan as well as training programs. The rest is tied to key milestones in construction and hiring.

The aforementioned article takes a somewhat sceptical tone which is not without warrant. The firm is promising a lot and at the same time losing billions of dollars a year. That aside, in terms of the development of Vietnam’s manufacturing industry this may speak to a sharp divide between foreign and local firms whereby local manufacturers are struggling to develop the skills necessary to compete in the wider world.

Moving forward into March, trade should pick up relative to February, however, it’s not clear as yet whether any improvement can be sustained.

Key developments, Vietnam manufacturing, February 2024

There were several big developments in Vietnam’s manufacturing sector in January. Several big projects started operating and several other sizable projects were announced in both northern and southern Vietnam. These include:

  • South Korea’s Hyosung is planning to invest US$400 million in an aviation fuel manufacturing facility in southern Vietnam[‘s Ba Ria-Vung Tau province. The project is set to cover 8.4 hectares and produce 234 million tons of fuel a year.  
  • South Korea’s Hanwha is looking to raise its investment in Vietnam by US$60 million. The funds will be used to expand the firm’s Hanoi factory which produces parts for aircraft engines and industrial gas fired turbines. 
  • Hong Kong’s Korninghill Group Limited announced it would be investing US$3 million in a manufacturing plant in Hai Duong. The factory will produce kids toys, plastic containers, and electrical appliances including hair dryers and electric toothbrushes.
  • China’s Trina Solar has been approved to build a third solar cell plant in northern Vietnam’s Thai Nguyen province. This will include an investment of US$454 million and is set to cover 14.1 hectares.
  • Taiwan’s Good Way Technology started work on a US$45 million factory in northern Vietnam’s Thai Binh province. The facility will produce USB connectors and is expected to have an annual output of 3.7 million units.
  • Singapore’s Gold Coin Management Holding Limited has been given the okay to start work on a US$17 million animal feed project in northern Vietnam. The project is set to cover 3.88 hectares and produce 300,000 tons of animal feed a year.

See also: Manufacturing in Vietnam 2024: Ultimate Guide

Key performance indicators, Vietnam manufacturing, February 2024


Vietnam’s total exports, February 2024

*FIE = Foreign Invested Enterprise

FIE % of total73.64%72.69%

Source: General Department of Customs

Vietnam’s top manufactured exports, February 2024

FebruaryYear to date
DescriptionUS$MOM %US$YOY %
Computers, electrical products, spare-parts and components thereof4,657,015,844-12.99,992,649,78940.2
Telephones, mobile phones and parts thereof3,943,296,759-29.39,513,164,4693.4
Machine, equipment, tools and instruments2,949,714,809-26.66,976,014,57710.9
Textiles and garments2,022,146,563-35.55,157,025,18013.4
% of total exports59.75%58.75%

Source: General Department of Customs

Industrial Production Index

Vietnam’s General Office of Statistics found that Vietnam’s Industrial Production Index decreased by 18 percent in February compared to January and 6.8 percent compared to February of 2023. Note that last year the Lunar New Year, for which there are five public holidays, was in January in 2023 but February in 2024. February is also a shorter month.

Key changes from January to February:

  • Mining decreased 16.9 percent;
  • Manufacturing and processing fell by 18.6 percent;
  • Production and distribution of electricity, gas, hot water, steam and air conditioning fell by 17.1 percent; and
  • Water supply; waste and wastewater management and treatment activities fell by 3.2 percent.

Purchasing Managers Index

S&P Global’s Purchasing Managers Index–or PMI–recorded a second consecutive month of growth in February increasing from 50.3 in January to 50.4. Anything above 50 is considered to signal the sector is growing less than 50 and it is shrinking.

 Key takeaways:

  • Business optimism reached a 12-month high–55 percent.
  • New orders increased;
  • Growth was seen in consumer and investment goods;
  • There was a fall in intermediate goods;
  • Firms depleted their inventories rather than order new supplies;
  • Selling prices went up;
  • Staffing levels expanded but many were hired only on a temporary basis; and
  • Input costs increased.

Vietnam manufacturing outlook for March

Moving into March, as Lunar New Year festivities wrap up production should once again get back to normal. That said, the new normal appears to be slow, inconsistent growth and in this context, any positive developments should be considered with good helping of caution.


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