VietnamNewsToday.com

Rising labour costs bring benefits

Vietnam is to become a more competitive manufacturing destination for foreign textile and garment businesses as competitors’ production costs climb.

According to the Thai Garment Manufacturers Association (TGMA), rising local production costs have pushed five major Thai garment manufacturers to relocate to Vietnam, transferring combined investment of $50 million.

Vallop Vitanakorn, honorary adviser to the TGMA, said the five were Hong Seng Knitting Company, Hi-Tech Apparel Company, Nice Apparel Company, Liberty Garment Company, and Golden Thai Industry Company. Their factories in Vietnam were expected to start operations within 2011, employing 24,000 workers.

He added that “more Thai garment businesses may move to more competitive-labour countries such as Vietnam, Bangladesh, Indonesia, Cambodia and possibly Myanmar due to the declining Thai labour trends.”

Sukij Kongpiyacharn, president of TGMA, said that Thai government’s consideration to increase minimum wages by 25 per cent over the next two years was certain to reduce the Thai garment industry’s competitiveness.

“The problem is also employee retention, as 10-20 per cent of workers drop out of the industry after returning home to harvest crops.”

Also, existing foreign manufacturing businesses in Vietnam plan to expand their production to take over work transferred from their other factories currently based in neighbouring countries due to increasing production costs.

Kenny Wong, financial controller of Hong Kong’s garment firm Smart Elegant International in Vietnam, said: “Compared with the other countries, labour cost in Vietnam is still cheaper and labour skills are not too much different compared with China. Besides, many of our overseas buyers also consider Vietnam an important and reliable base for manufacturing. And this is an important factor pushing us to continue to invest in Vietnam.”

He said his company was going to set up another factory in Ho Chi Minh City to move all production work from China in case the company could not afford fast-rising production costs.

“Right now we already have two factories in Ho Chi Minh City. The total planned manpower should be 1,800 workers,” he said.

However, Wong said that as more foreign textile and garment manufacturers were coming to set up their factories in Vietnam, the pressure of labour supply would increase.

“In this context, we need to offer more benefits and allowances to workers to keep them working for us,” said Wong.

“We are now contacting some vocational training centres in the central Vietnam and hope they can recommend their graduated students to work in our new factory next year. On the other hand, we are planning to build a dormitory for our workers to solve their living problem and the design of our new factory will be a modern one with facilities of canteen and air-con working environment so as to attract more workers.”

From VirVN

Newer Articles
  • Milk prices unexpectedly shoot up
  • Auto tax debate continues, business suffer
  • Vietnam may lose Buon Ma Thuot coffee brand
  • Building materials sales to rise
  • Car sales up 10 per cent in August
  • Domestic retailers tend to join hands with foreign
  • Social networks more utilized by businesses for marketing
  • Fertiliser prices increase dramatically
  • Vietnam’s trade gap from China at nearly $4b in Jan-Apr
  • VCCI supports business restructuring
Older Articles
  • Medicine prices soar on higher costs
  • Rice price to be kept stable
  • Exchange rate adjustment and tightening monetary policies major issues of Q1
  • April prices to surge on rising inputs
  • Inflation hits retail prices
  • Guest workers from Libya recruited by domestic companies
  • Petrol business - a burning issue
  • Inflation increases domestic tourism prices
  • Wave of input material price increases puts businesses in a whirl
  • Economic recovery turns State attention to inflation control
Latest News
  • Vietnamese software firms consider Japan as the major market
  • Despite problems, 2011 FDI spending equals 2010
  • EVNTelecom asks for government’s approval to sell 12pct stake for VTC
  • Vietnamese enterprises expanding into international markets
  • Ernst & Young Vietnam role to be examined
  • Vietnamese firms invest over $24.5b in foreign countries as of July-end
  • Vietnam Insurance Market: Keeping Double-digit Growth
  • Vietnam’s economy looks grim with ADB’s forecast
  • Ministry rejects import-export tax changes
  • Government okays anti-dumping suit against US
For Foreigners
  • Adb: policy tightening will lower inflation
  • HSBC, Barclays to advise Vietinbank’s planned overseas dollar bond sale
  • Vietnam govt to service debt for troubled cement projects
  • Calm heads prevail as the forex market to remain cool
  • Further fiscal & monetary tightening in coming months
  • IMF cuts Vietnam’s inflation forecast to 9.5pct in 2011
  • Vietnam’s dong has best week since 1997 after dollar rates curb
  • Vietnam tightens control over state-bank partnership
  • Foreign investors list problems in Vietnam
  • Foreign invested enterprises complain about customs procedures

BusinessTradeVietnamGovernmentFDIWorld economyVietnamese PartyEconomyEconomicMarketState managementPrime MinisterHCM cityHanoiHo Chi MinhCPIAsianWorldAmericaEuropeNguyen Tan DungHau GiangMekong DeltariceStandingMekongCambodiausajapanchinakoreaLai ChauHoa BinhHoi AnChu LaiQuang NamDa nangCan thoSon LaPower PlantMinistry of IndustryDung QuatOilSingaporeThailandMalaysiaIndonesiaLaosVietnameseFDI capitalinvestorsforeign investorNetherlandsUSservicetransportationinfrastructuretourismVNPostExpressSpainGoldTra fishexportcontractstouristMiddle AreaConstructionShipbuildingIndustryCompanyIndustrial ZonebudgetDong NaiBinh DuongVung TauTay NinhBinh PhuocTay NinhLong AnTien GiangUS investorshydropower plantQuang NinhNha TrangStock ExchangeHNXIndexcapitalAgricultureDong ThapAn GiangExport-Processing ZoneYen BaiLao CaiLai ChauDien BienSon LaHoa BinhPhu ThoHa GiangTuyen QuangBac KanLang SonCao BangmanufacturersAseanRussiadevelopmentAviationinflationHong KongAmericanChamber of CommerceSeafoodODAWBIMFFEDAsia-PacificAssociationcountriesEuropeanmarine economyThanh HoaNghe AnNam DinhHa TinhPhu LýVinh PhucBac NinhBac GiangHung YenHai DuongBinh ThuanBinh PhuocLam DongGia LaiKon tumQuang NgaiQuang BinhQuang TriNinh ThuanCa MauBac LieuSoc TrangTra VinhKien GiangVinh LongBen TreincomespoliciesLawassetsNatural GasBuildingstatisticsstrategyDa Latmineral exploitationprocessingindustrieselectricitywatersupplyEnterprisesforestryfisherycommunicationsreal estatetransportationCorruptionbauxiteSecuritiesInsuranceBankFinanceAccountgoodsTrade BalancecoffeeCoalfestivalHa NamNinh BinhHoa BinhUniversityArtsBooktravelVietnam VisaVisaPagodaCommitteePeople's CommitteeVinashincompaniesHoa PhatHSBCACBvietcombankvietinbank

Copyright 2010 © VietnamNewsToday.com 
Powered by: CIINS Design by: Webdesign.vn