German tape manufacturer to build plant in Vietnam

The new facility will be located over 70,000 square metres at DEEP C Industrial Zones, an industrial park cluster in the port city of Haiphong in the north of Vietnam

The new facility will be located over 70,000 square metres at DEEP C Industrial Zones, an industrial park cluster in the port city of Haiphong in the north of Vietnam. Production will start in 2023 with approximately 140 employees in the first phase.

In Germany, tesa is one of the most influential brand names in the production of high-tech tape for the electronics and automotive industries. This latest move is a timely step from the group to tap into the potential of the dynamic Asian adhesive tape market and build up its already strong position in the region.

A plant that tesa has been operating in Suzhou, China will reach its full capacity in 2025 despite further expansion. “The new plant in Vietnam creates the necessary capacity to ensure our growth targets in the largest and fastest-growing region,” explained Stefan Schmidt, head of tesa’s Supply Network which is responsible for purchasing, logistics, and production for the group worldwide.

Schmidt said that time-to-market is especially important to tesa. “Access to markets, fast and flexible delivery to customers, and the development of local raw materials are important factors in international competition,” he added. Vietnam offers tesa the best opportunities to shorten the route to customers and suppliers in Southeast Asia and China. Plus, a growing number of their important customers in automotive and electronics are relocating to Vietnam.

“Location has always been one of the most unique selling points of Vietnam when it comes to attracting foreign direct investment (FDI). Specifically, Haiphong has been on the radar of investors thanks to its massive upgrade of infrastructure in recent years,” said Koen Soenens, general sales and marketing director at DEEP C Industrial Zones.

Soenens added that, as the world’s 15th most populous country and with a young average age, Vietnam is suitable for mass production. Notably, a significant number of new engineering, manufacturing, and construction graduates are produced each year in Vietnam.

The International Monetary Fund, in a report published in April, expects Vietnam to be one among few countries with positive growth rates in 2020 despite the severe impact of the COVID-19 pandemic. In the first quarter of 2020, the country’s economic growth increased by 3.82 per cent and the manufacturing sector remained its role as economy leading driver at 7.12 per cent.

tesa’s decision to perform its expansion in Vietnam is demonstrating confidence in the potential for development and sending a strong signal that FDI attraction is moving forward on a recovery path. After early success in containment of the virus and reopening of the economy, Vietnam has retained its status as a safe destination for overseas investors. “We are strongly convinced that the potential in the coming time is far greater than before as the pandemic has raised serious concerns over the concentration of production in one single country,” noted Hans Kerstens, senior sales manager at DEEP C Industrial Zones.

In Vietnam, tesa is also investing in sustainability. Some 65 per cent of production volume will be made with solvent-free and water-based adhesives. For the plant planning, the company is striving for certification according to the internationally-recognised LEED Gold Standard. Among other things, the use of solar energy and rainwater treatment are also in the works.

The deal between tesa and DEEP C Industrial Zones was made partly thanks to their compatibility in sustainability vision. The German group aspires to sustainable high-tech tape production while DEEP C is working towards realising the first eco-industrial park concept in Vietnam, with installation of solar panels on plant rooftops, construction of road made from plastic waste, generation of green energy, and more besides.

Since 2001, tesa SE – with nearly 5,000 employees – has been a fully-owned affiliate of Beiersdorf AG. It is one of the world’s leading manufacturers of technical adhesive tapes and self-adhesive system solutions, standing at more than 7,000 products, for industrial and commercial clients as well as for end users.

Around three-quarters of the group’s sales are generated by applications for various industrial sectors such as automotives and electronics, printing and paper, and building supply, as well as security concepts for effective brand and product protection. As a partner to the pharmaceutical industry, tesa also develops and produces medicated patches. Almost a quarter of the group’s sales is also generated by products for end users and professional craftsmen.

Belgian developer DEEP C Industrial Zones has become one of the largest industrial property developers in Vietnam with five such zones, forming the DEEP C industrial zone cluster covering 3,400 hectares at the epicentre of the region’s manufacturing and infrastructure boom.

DEEP C provides a large portfolio of products and services including industrial land and workshop/warehouse for lease, port development and operation, utilities supply and distribution, renewable energy generation, and more. The developer’s goal is to grow into Vietnam’s first eco-industrial park driven by digital technologies and an innovative mindset, where its clients are provided with all the tools they need for success.