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The experience of an investor: While Vietnam's low labor costs are attractive, there are also various realities in which land acquisition is difficult, land costs are high, workers' efficiency is low, and industrial facilities are insufficient. Yu Yu has gone to Vietnam no less than 70 or 80 times.
China and Vietnam built a new economic and trade cooperation zone (hereinafter referred to as the â€œHaiphong Industrial Parkâ€) in Haiphong, a northern city in Vietnam. The investment and construction and operation services are provided by Shenzhen Shenyue United Investment Co., Ltd. (hereinafter referred to as â€œShenzhen Vietnam Investment Co., Ltd.â€). Yu Yu is the marketing director of this company.
The tender for the industrial park is in progress. Yu Yuzheng has seven or eight companies. "If we did not examine the trade-offs for a year or two in advance, we would not talk about it first." Yu Hao's attitude is very real, investment is not a child's play. He fully understands that this end of Vietnam is a beautiful temptation of low labor costs, and at the other end, it is a variety of practical problems such as difficult land acquisition, high land costs, low worker efficiency, and inadequate industrial support.
In fact, with the reduction of preferential policies for investors, the "Vietnamese fever" of China's manufacturing industry has gradually "retreated". Many people familiar with the investment environment in Vietnam told reporters that the decision to invest in Vietnam needs more careful.
After the financial crisis
The financial crisis in 2008 made China's many manufacturing enterprises precarious, especially in some labor-intensive low-end manufacturing industries. Their originally unreliable margins were even weaker after the financial crisis hit. In this situation, many companies are forced to make choices and move to lower-cost places.
Compared with the mainland of China, Vietnam, Myanmar, and Cambodia, these Southeast Asian countries have lower labor costs and lower costs for water, electricity and raw materials. Since the 1990s, Vietnam and other countries have begun to attach importance to economic development and introduced a series of preferential policies. Policies to attract foreign investors. These factors contributed to an investment boom in Southeast Asia.
Yuan Mingren is an advisor of the Dongguan Taiwan Business Association. In the previous two years, a group of Taiwanese businessmen from Dongguan visited Southeast Asia. As an investment advisor, he has taken more than a dozen delegations. In Dongguan, known as the "China's Foreign Trade Locomotive," a large number of shoe factories, garment factories, and electronics factories have been hit hard in the financial crisis. Yuan Mingren told the reporter of the "First Financial Daily" that there are a number of Taiwanese companies that have closed factories. At least 10% is going to Southeast Asia.
Due to obvious cost advantages, most of the investment in Southeast Asian countries such as Vietnam is labor-intensive. After the transfer of the industrial structure has also been quietly formed in Vietnam. In southern Vietnam, the footwear industry and the textile industry dominate, while in the north, the electronics industry dominates.
In fact, there are also many non-labor-intensive companies that have been transferred. The reporterâ€™s interview found that the low labor cost is only one of the factors that attracts the companyâ€™s transfer, and avoiding anti-dumping risk is another important incentive for the transfer. Yu Hao told this newspaper that since 2004, as the United States and the European Union began to impose restrictions on Chinese companies, there was a group of Hong Kong- and Taiwan-funded enterprises, such as furniture, leather goods, and textiles, which were transferred to Vietnam. The area is Ho Chi Minh City.
Zhang Liming, assistant to the chairman of Qianjiang Investment Management Co., Ltd., also stated that with the development of Chinaâ€™s economy, some foreign trade companies believe that they may encounter more and more anti-dumping actions in Europe and the United States. Therefore, they are allocated to places such as Vietnam, where economic development is relatively backward. To circumvent anti-dumping risks. Generally speaking, among such relocation companies, there will be a little more in the light industry, such as those in industries such as machinery and electronics, building materials, chemicals, and textiles.
There are also some corporate shifts due to fancy the ASEAN cake. In 2007, Shenzhen Xiongqi Power Technology Co., Ltd., which started investing in Vietnam (hereinafter referred to as "Power Supply"), placed the Southeast Asian market in a very important position. Chen Hong, vice president of the company, told the newspaper that in their market In the strategy, the market size of Southeast Asia (including India) accounts for 20% to 30% of the entire group. Their â€œtesting waterâ€ effect in recent years is obviously good. In 2011, they purchased a 40,000-square-meter production base in Vietnam. The products produced here mainly supply the Southeast Asian market, taking into account the European and American markets.
Low cost and low efficiency
In the investment attraction of the industrial park, Yu Yu emphasized the low cost of Vietnam. And this is why many companies eventually came to Vietnam.
According to the investment promotion manual of Haiphong Industrial Park, the minimum wage rate in Haiphong City is 2 million VND (equivalent to RMB 600). The general salary of employees in foreign-funded enterprises is 750-900 yuan per month for ordinary workers and 1,000 yuan per month for skilled workers. ~ 1,500 yuan. For business owners, this figure is clearly more attractive than the wages of employees in Shenzhen that cost between $3,000 and $4,000.
Chen Hong told the newspaper that their science and technology park was located 30 kilometers away from Ho Chi Minh City. Now the basic salary of employees is 700 to 750 yuan, plus over 1,000 yuan for overtime pay and subsidies, although it is 600 yuan more than in 2007. The level is now almost doubled, but it still has an advantage over the domestic market. The basic salary of employees in Shenzhen is 1,500 yuan.
Yu Hao also went to the Suzhou Hi-tech Park some time ago to talk about several e-businesses. They also want to transfer because the domestic cost is too high. It has tripled in three years. The salary of a general worker is 3,000 yuan, plus the food and shelter. A month is almost 4,000 more.
â€œVietnam is implementing a six-day working week. Most of the employees do not need dormitories. They prefer to rent their own accommodation,â€ Yu said.
However, everything is not perfect. While calculating how much the low wages will save the company, the companies here must also accept the reality of lower labor efficiency.
Chen Hong said that Vietnamâ€™s labor efficiency is about 1:1.5 compared to the domestic level, which means that one worker in the country needs 1.5 workers to do work in Vietnam.
Reasons for not so high efficiency may be rooted in education and culture. A number of people familiar with Vietnam reported to this reporter that since Vietnam was a French colony, Vietnam was greatly affected by France. People are not very enthusiastic about making money. Most people's mentality is: â€œIâ€™m not good enough. Done".
â€œThe people there are not earning enough money today to go to work. Men go drinking beer and coffee, and women go home to do housework.â€ Yu Yu said.
In addition, schools in Vietnam are comprehensive universities. There are almost no vocational and technical schools that specialize in the cultivation of certain skills, such as cooking schools, electronic technology schools, and tourism schools. Yuan Mingren believes that this has led to a lack of professionalism in Vietnamese talent.
Vietnam, with a population of 90 million, is now beginning to face shortages. Yuan Mingren said that now South Vietnam is very short of work, and the lately developed North Vietnam situation is slightly better. In addition, each year in Vietnam, there will be fixed one or two wage-themed strikes, all of which are problems for companies.
â€œAfter all, we must not be too tough on peopleâ€™s sites.â€ In order to adapt to the culture here, Chinese companies have made corresponding adjustments in management. Chen Hong said that many workers in Vietnam have the habit of not having to pay to work the next day. Therefore, the power production base in Vietnam had to make production tasks tighter one day before the wages were paid, so that the next day the wages were paid off. You can give some employees vacations.
â€œAlthough the efficiency is lower, but the wage is less than half, so there are still savings, and the artificial ones have an advantage of about 20%. It is still attractive for labor-intensive industries.â€ Chen Hong said that the battery industry is not Labor is intensive, but their comprehensive costs on this side also save 5-6 percent.
The Blumder Oriental Co., Ltd. engaged in the color spinning industry was the first company to sign a contract with the Haiphong Industrial Park. An executive of the company disclosed to the newspaper that their manufacturing costs in Vietnam are much lower than in China, and raw materials are bought locally. With hydropower and labor, the total cost is saved by 20%.
Fading Policy Aura
In recent years, with the economic development in Vietnam, the preferential policies granted to foreign-funded enterprises in the 1990s have been gradually reduced. Some preferential policies previously granted to industrial parks have now been phased out.
Yu Yu revealed that the cost of land in Vietnam is much higher than that in China. Most of the domestic industrial areas are free, while in Vietnam, industrial parks are not cheap. For example, the comprehensive cost of acquiring land in Haiphong Industrial Park reaches A square meter of US$30 (equivalent to approximately RMB 190) will give the admission company a minimum of US$45 to US$60.
In addition to the high cost of land, it is hard for Yu Zheng to suffer headaches for four years. Despite the active promotion of the high level of China and Vietnam, the Haiphong Industrial Park project is not as easy as he expected. The land acquisition of Haiphong Industrial Park was finally won from 2007 to August this year.
Such a project for land requisition, in the eyes of Yu Yu, â€œhas been able to settle in China in two weeksâ€, but it took four years in Vietnam. In addition to respect for local customs, there may be local governments that are not efficient enough. Because of the slow process of land acquisition, some enterprises that have already talked about going to the park can't wait to go to other places.
Regarding the "going out" of enterprises, China still has policy support. In June this year, the Ministry of Finance and the Ministry of Commerce of the People's Republic of China jointly issued the "Circular on the Application of the Special Fund for Foreign Economic and Technical Cooperation in 2012". According to this notice, Chinese enterprises can apply for special subsidies to invest abroad, such as pre-payments, transportation of resources, insurance costs, training costs for outbound laborers, and insurance premiums for companies investing in overseas investment insurance. In addition, discounts can be made on the company's domestic and overseas loans.
The adequacy of industrial support is also a key issue for enterprises to investigate before they are transferred. A number of interviewees said that in general, industrial support in Vietnam is not yet adequate, but it also varies from industry to industry.
Yuan Mingren stated that in view of the footwear industry, this part of the company has been transferred earlier, and the supporting supply chain of the industry is relatively complete. Raw materials can all be found in the local area, but the electronics industry is not necessarily. Many of them need to be from the Guangxi side. In the past, it took about three hours to transport to North Vietnam.
Chen Hong said that for the battery industry he is engaged in, Vietnam's industrial support is not very good, and some materials still have to be purchased from the country, such as battery shells, separators, additives, etc. These types of materials are not yet relevant The company set up a factory in Vietnam.
A number of respondents familiar with Vietnam stated to this newspaper that Vietnamâ€™s current infrastructure is roughly equivalent to Chinaâ€™s level in the mid-1990s. Traffic, communications and other facilities are still relatively backward, "a lot of telephone poles, pull the wires are everywhere, there are a lot of 'cobwebs'." Chen Hong said.
For companies whose costs and profits are lives, â€œcobwebsâ€ may be nothing, and they are transferred abroad. What they need to consider is whether the supply chain is complete, what the cost budget is, where the market is, and local policies. surroundings.
For the first two months, Yuan Mingren led a group of Taiwanese businessmen visiting Dongguan. This time their goal was Myanmar.
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