Logo of Phnom Penh Post newspaper Phnom Penh Post - VN new powerhouse of SE Asia

VN new powerhouse of SE Asia

Content image - Phnom Penh Post
An aerial shot of industrial buildings in Ho Chi Minh City. vns

VN new powerhouse of SE Asia

(Vietnam news/ANN): In the past 20 years Vietnam has switched from being an agricultural economy to one of the brightest manufacturing hotspots in Southeast Asia, according to the latest report from Jones Lang LaSalle.

“Vietnam is establishing itself as the industrial powerhouse of Southeast Asia,” Stephen Wyatt, Vietnam country head of the US property services company, said.

“We expect the industrial market will enter a new phase and move up the value chain in the future, moving away from labour intensive to capital intensive.”

In 1986 there were 335 hectares of land dedicated to industrial parks, and now the figure is 80,000 hectares.

The report said: “This phenomenal growth can be attributed to Vietnam establishing itself as an export-driven economy, dedicated industrial and economic zones, numerous free trade agreements, strong economic growth and a young, plentiful, low-cost workforce.”

China continues its move away from labour-intensive industries and up the value chain, which has led to companies relocating to Southeast Asian countries.

Due to its close proximity and geographical location, Vietnam is one of the largest beneficiaries of this migration.

The country is strategically located between China and Singapore with 3,260km of coastline, providing excellent access to the East Sea, one of the world’s major shipping routes.

Roughly, 40 per cent of cargo transported from the Indian Ocean to the Pacific crosses the East Sea before arriving in China, Japan, South Korea and the US.

Many commentators predict the logistics market to be the standout performer over the next five to 10 years.

The rapid growth of the middle-income population creating more disposable income and a growing obsession with e-commerce will put significant demand on logistics facilities.

According to the Asian Development Bank, Vietnam spends 5.8 per cent of its GDP on infrastructure, the highest in the region.

In order for Vietnam to enter the next phase of the industrial and logistics cycle and become more competitive than other countries in the neighbourhood, it is critically important that significant expenditure continues on infrastructure, including highway networks, deep-sea ports and the upgrading of utilities, including renewable energy.

A challenge for Vietnam over the next few years will be ensuring it has the ability to adapt and embrace the inevitable disruption and changes brought about by technology and automation, now commonly known as “industry 4.0”.

All these initiatives have led to significant investment by large foreign companies.

The best case study is Samsung, which has reportedly invested over $17 billion in Vietnam.

This has given confidence to many other foreign companies from around the globe to set up operations in the country.

The industrial property market in the country, including industrial land, ready-built factories, warehouses and logistics properties, is in a nascent stage of development.

The market is concentrated in three key zones: the Northern, Central and Southern Key Economic Zones.

The southern region was the first hub and home to conventional sectors, while the north has attracted more advanced high-tech industries and is strategically located close to China. The central region is a relative newcomer.

Greg Ohan, deputy CEO of BW Industrial, Vietnam’s largest “for rent” industrial developer, said from a real-estate developer’s perspective, his company’s focus is on supporting the country’s industrial upgrade.

“We will be a key force in the nation’s industrial and logistics real estate sector driving the development and upgrade of other sectors such as manufacturing and e-commerce,” he said.

MOST VIEWED

  • Phnom Penh curfew starts today

    A two-week curfew from 8pm to 5am starts today in Phnom Penh, a day after a sub-decree detailing administrative measures to contain Covid-19 was issued by Prime Minister Hun Sen. “Travelling in Phnom Penh is temporally banned between 8pm and 5am,” said Phnom Penh governor

  • Cambodia on the verge of national tragedy, WHO warns

    The World Health Organisation (WHO) in Cambodia warned that the country had reached another critical point amid a sudden, huge surge in community transmission cases and deaths. “We stand on the brink of a national tragedy because of Covid-19. Despite our best efforts, we are

  • Cambodia gears up for muted New Year festival

    The recent curfew and restrictions imposed in the capital and other Covid-19 hotspots were intended to break the chain of transmission, Ministry of Health spokeswoman Or Vandine said as municipal and provincial authorities issued new directives banning certain activities during the upcoming Khmer New Year

  • Vaccination open to foreigners in Cambodia

    The Ministry of Health on April 8 issued an announcement on Covid-19 vaccination for foreigners residing and working in Cambodia, directing the Ministry of Labour and Vocational Training and local authorities to register them. Health minister Mam Bun Heng, who is also head of the inter-ministerial

  • Covid-19 vaccination now obligatory

    Prime Minister Hun Sen on April 11 issued a sub-decree making Covid-19 vaccination compulsory for individuals unless they have a medical certificate proving they have pre-existing health conditions that prevent them from doing so. «This applies to all members of the armed forces and civil servants

  • Culture ministry: Take Tuol Sleng photos down, or else

    The Ministry of Culture and Fine Arts has told Irish photographer Matt Loughrey to take down the photos of Khmer Rouge victims at Tuol Sleng Genocidal Museum which he allegedly colourised and altered to show them smiling. The ministry said Loughrey's work is unacceptable, affecting