Fri, Dec 13, 2013 - Page 15 News List

Samsung moves factories from China to Vietnam

BOTTOM LINE:To protect profits as labor costs rise in China, the firm is looking to Vietnam, with one analyst saying it may make 80% of its phones there some day

Bloomberg

Samsung’s complex in the Yen Binh Industrial Zone of Thai Nguyen Province, north of Hanoi, will pay no tax for the first four years and half the full rate the following 12 years, the local government’s Web site shows.

While tax breaks and cheap workers are lures that other countries such as India and Indonesia could offer, Vietnam’s closer location to existing Samsung production bases in China and South Korea is an extra incentive, said Than Trong Phuc, managing director of technology-focused investment fund DFJ VinaCapital LP in Ho Chi Minh City.

“Other countries can match or even beat the incentives that Vietnam is offering, but Vietnam is very close to Samsung’s supply chain,” Phuc said. “You see [South] Korean companies everywhere you look in Vietnam, right and left.”

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