Taiwanese footwear giants scaling up presence in Vietnam
Vega Balls Vietnam, belonging to Taiwanese group Yuan Chi, recently received an investment certificate for its venture into Dong Mai industrial park (IP), in the north-eastern province of Quang Ninh, developed by state-owned leading building material maker Viglacera.
Accordingly, the company will build a large-scale export sportswear manufacturing facility over 32,400sq.m in the IP, with a total investment capital of VND330 billion ($15 million) in the first phase. The plant is expected to come online in early 2017.
Founded in 1949, Yuan Chi is well-known in the production of sports equipment, particularly basketballs. The group operates three plants in China, two in Thailand and is among the top 5 basketball producers in the world.
Its products are aimed mainly at the US and European markets.
According to a Yuan Chi representative, the group’s decision to open a new manufacturing plant in Vietnam came in the wake of soaring order requests from global sports brands.
In early 2016, the group researched IPs in Haiphong city, Hai Duong and Vinh Phuc provinces before finally deciding on Dong Mai IP in the north-eastern province of Quang Ninh.
The IP is well-positioned as it is contiguous to two of the north’s largest ports, Haiphong and Cai Lan, very convenient for the transportation of import and export goods.
Vietnam Leather, Footwear and Handbag Association (Lefaso) general secretary Phan Thi Thanh Xuan said that Taiwanese businesses had poured a considerable chunk of money into Vietnam’s footwear sector, with an expansive network of large-scale plants across southern provinces, such as Binh Duong and Dong Nai.
Taiwan’s Pou Chen Group alone, which specialises in processing items for global brands like Nike and Adidas, has several dozen member businesses producing footwear and bags in locations throughout Vietnam, generating export revenue of $1.5 billion per year.
Early this year, a Pou Chen Group member based in Dong Nai province, PouSung Vina, continued to recruit thousands of labourers for its export production expansion.
Another Taiwanese company, Feng Tay, is operating multiple manufacturing plants across Vietnam, with annual export revenue reaching $500 million.
Dong Phuong Dong Nai Limited, a member of Feng Tay, is expanding its manufacturing base in Dong Nai to cover more than 40,000sq.m. The new plant will come on-line before the end of 2016.
The footwear sector has brought the country $6.3 billion in export value out of the sector’s total export target of $17 billion for 2016.
With the advantages of large-scale production and the parent companies’ wide customer base, foreign invested businesses continue to claim the lion’s share in the footwear export market.
