HANOI area furniture maker Xuan Hoa Vietnam Joint Stock Co has received an influx of interest in the wake of US-China tariffs, prompting manufacturers - even as big as Ikea - to shift production from China to Vietnam, reports Bloomberg
HANOI area furniture maker Xuan Hoa Vietnam Joint Stock Co has received an influx of interest in the wake of US-China tariffs, prompting manufacturers - even as big as Ikea - to shift production from China to Vietnam, reports Bloomberg. 'The trade war is bringing more business, for sure,' said Xuan Hoa Vietnam CEO Le Duy Anh, who expects sales to double in the next five years. 'There are more companies getting in touch with us to switch from China to our products.'
At least 10 new prospective clients came calling at Mr Anh's office in the first three months of the year.
Xuan Hoa has been doing business with Ikea for more than 17 years, and the Swedish furniture maker recently started ordering a small, palm-sized metal part from the Vietnamese producer.
Xuan Hoa's price was already about 1,000 dong (four cents) cheaper per part than Ikea's Chinese supplier, according to Mr Anh.
'Like any other growing, global company, Ikea is always seeking competitive opportunities in order to secure optimal sourcing to keep costs low,' said a company spokesman.
Foreign direct investment has steadily increased since the trade war broke out, but it took off in 2014 after Samsung Electronics. announced plans to shift production of its smartphones from China.
FDI reached US$14.1 billion in 2017, making up one-fifth of all inflows into the region, excluding Singapore, according to data compiled by Maybank Kim Eng Research.
'It's not just a new toy for people to play with - it's a shiny new toy,' said Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi.
Vietnam has made strides in the World Bank's Ease of Doing Business gauge and the World Economic Forum's Competitiveness Index, and debuted this year at No 60 in the Bloomberg Innovation Index.
WORLD SHIPPING
