Reed Tradex showcases local visions

What’s your view on the results of exhibitions held in Vietnam?

With the continuing growth of foreign direct investment (FDI) into Vietnam over the years, industry has been able to grow, feeding industrialists’ desire to find new technologies to match the current trends.

As a result, attendance at international trade shows and events in Vietnam is also growing. These events provide a place to gather and display content and resources that foster economic development.

Currently, Reed Tradex is holding three international exhibitions in Vietnam – Metalex Vietnam, Nepcon Vietnam, and Vietnam Manufacturing Expo. More than 10,000 industry members have joined our exhibitions to explore technologies and partake in the forums and seminars held during the events. The growing number of visitors at our exhibitions (we are now averaging 11-15 per cent growth per year) reflects the concerns of Vietnamese industrialists with respect to the importance of connectivity and industry updates.

What is your assessment of market trends and the investment environment in Vietnam?

In 2016, Vietnam attracted a total of $24.4 billion in committed FDI capital. The largest FDI sector was manufacturing and processing, accounting for some 60 per cent of the total.

South Korea was Vietnam’s largest FDI source with $7 billion invested, followed by Japan and Singapore. This partly reflects the potential of Vietnam, as well as the opportunity to connect with strong Asian investors to create a new and prosperous manufacturing region.

The investment has not been limited to low-end labour-intensive manufacturing. Increasingly, high-tech electronics producers are establishing a presence in the country. This trend is likely to persist, which was evidenced by the continued expansion of global tech giants like Samsung, Intel, LG, Panasonic, and Microsoft.

It cannot be denied that Vietnam is benefiting enormously from FDI inflows; however, a long-term plan is essential in order to keep Vietnam moving forward sustainably.

Vietnam’s thriving industrial sectors are on full display at Reed Tradex’s exhibitions

The future of manufacturing is not just about attracting FDI inflows now, but sustainable development in the long-term. What issues should manufacturers consider in boosting capacity locally?

I would like to emphasise again that Vietnam has many advantages for foreign investors. Even with a lack of capable local suppliers, I do believe that existing incentives have still made investors willing to undertake projects.

The localisation rate in Vietnam is only about 10 to 30 per cent, which does not reach the required rate to enjoy preferential rules of origin in most free trade agreements (FTAs), which is 45 per cent. For long-term development, giants like Samsung, Intel, or Microsoft appear ready to invest and engage in building local capacity by training workers and supporting related businesses. Local manufacturers should take advantage of this development to build their own local production capacity.

Each production unit needs to clearly identify its goal of upgrading the technology of the production line to serve global standards, and, accordingly, develop resources to drive the new systems. Localisation and in-country value-creation are part of the solution, but it takes many years to educate a highly skilled worker. A strategy is needed to attract native experts back to local industries after they have worked overseas.

The preferential regime for local manufacturers to borrow capital in order to invest in technology will be a good solution for synchronising the production line and reaching international standards in the fastest way possible. However, the sustainability of these initiatives to foster broad-based economic development is most fully realised when industry and government work together to support local skills development, foster investment in technology and research-and-development, and create foundations for industry clusters that can innovate, capture supply-chain synergies, and leverage economies of scale.

What is Reed Tradex’s direction and vision within the Vietnamese market?

In the face of the urgent need for localisation in Vietnam, we are associated with local and international professional associations and organisations to promote integrative thematic workshops, business meetings, and industry experiences at our exhibitions.

We believe that manufacturing has historically relied on developing skills, which in turn has promoted its capabilities. Individuals in the sector’s workforce possess skills which are critical assets that add value to the manufacturing process.

We are continuing to invest in e-marketing products and services to allow exhibitors, visitors, and all exhibition participants to conveniently access and connect from every point in the world. In the beginning of 2016, we launched a recommendation system through the website, making it convenient for all attendees to find the partner that best suits their needs.

To serve the electronics industry in Vietnam, we are in the process of organising Nepcon Vietnam 2017, which is a special exhibition on SMT and testing technologies, equipment, and supporting industries for electronics manufacturing.

Nepcon Vietnam 2017 will celebrate its 10th anniversary this year, and will be held at the Hanoi International Centre for Exhibition during September 13-15.