Matsuoka Corporation highlights Vietnam's appeal to Japanese PPE manufacturers

Vietnam is fast emerging as an international production hub for medical gear and PPE

COVID-19 has been the doom of many a production sector. However, some have been put into a favourable position and have been rising to prominence to attract great flows of foreign investment. One of these sectors is medical mask and PPE production, an area where Vietnam is now recognised as a reputable supplier.

Matsuoka Corporation, one of 30 companies that have just received support from the Japanese government to leave China, has decided to move operations to Vietnam.

According to NNA Business News, a representative of Matsuoka Corporation said that the corporation will pour around $28 million into An Nam Matsuoka Garment Co., Ltd., a Vietnamese subsidiary, to set up a new facility to produce protective wear and other items in the coming months.

Matsuoka Corporation established the subsidiary in last November, before the COVID-19 outbreak, as part of the corporation's plan to diversify production locations in Southeast Asia (supplementing existing production in Indonesia, Myanmar, Bangladesh). The new factory of An Nam Matsuoka Garment is based in VSIP Nghe An and is the fourth facility of Matsuoka Corporation in Vietnam, after the ones in Phu Tho, Bac Giang, and Binh Duong provinces.

In the 2018 fiscal year (ending in March 2019), the corporation's revenues from Chinese factories made up 60 per cent of its total overseas income, while Bangladesh and Vietnam contributed 25 and 10 per cent, respectively.

At the end of 2019, company spokesperson Michihiro Fukagawa said that the upcoming factory in Vietnam is expected to decrease the revenue contribution from China to 50 per cent by March 2021. He also highlighted that Vietnam is a major location for garment production for export to Japan and China.

Recently, JETRO announced the list of Japanese businesses which will receive aid to leave China. Most of those specialising in producing protective gear and health products like Able Yamauchi, Showa International, Techno Global, Hashimoto, Nikkiso, and Matsuoka Corporation are choosing Vietnam as their new destination.

According to the General Department of Vietnam Customs, as of June 2020, Vietnam exported 557 million medical masks to the US, the EU, Japan, and South Korea. Catching up with the new trends and the increasing demand of domestic and overseas markets, a lot of local businesses have been purchasing modern machines to make high-quality products, matching the requirements of the US and the EU, and offset a part of their losses from the global health crisis.

Along with its initial success in preventing and controlling the novel coronavirus, Vietnam is emerging as a reputable source of medical equipment, drawing in foreign investors to produce PPE and medical gear.