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Foreigners injecting money in mobile phone factories in Vietnam
While Vietnamese enterprises are not interested in projects on making mobile phones, foreign investors have been pouring money into projects to set up mobile phone factories in Vietnam.
Vietnamese investors have been very slow in implementing projects on manufacturing mobile phones in Vietnam. Thuan Phat Imoso officially kicked off the project on a mobile phone and motherboards factory on a five hectare land plot in the Hoa Lac High-Tech Park in Hanoi in 2007. The project has the total investment capital of 70 million dollars.
Thuan Phat Imoso initially planned to build four production workshops which would be put into operation in 2009. However, the first products were only launched into the market in late 2010, while only one of the four workshops has been put into operation. To date, the project has not become fully operational as previously planned.
Tran Dac Trung, Head of the Investment Promotion Division under the Hoa Lac High-Tech Park told Dau Tu newspaper that Thuan Phat Imoso’s project is one year late in comparison with the committed plan. The high-tech park’s management board has sent a document urging the investor to speed up the project. At the same time, the management board is considering adjusting the project’s scale in order to make it fit the investor’s capabilities.
Meanwhile, a representative of Thuan Phat Imoso said the mobile phone factory has become operational, but Thuan Phat still cannot make an official announcement.
However, Dau tu has reported that only some parts of the factory have been done, including a part of the fence wall, electricity and water system and one production workshop, which all have a total investment capital of 10 million dollars.
Prior to that, in 2004, Vina-Mobi Vietnam Company once planned to build a mobile phone factory capitalized at 25 million dollars in Da Nang City. However, in 2007, the project had its investment license revoked because the investor was too slow in executing the project.
While Vietnamese investors still cannot fulfill projects on making mobile phones, foreign investors have been summoning their strength to build mobile phone factories in Vietnam.
In late March 2011, Samsung announced that its mobile phone factory in Bac Giang province obtained the export turnover of two billion dollars since it officially became operational in 2009. The manufacturer hopes to earn three billion dollars from exports in 2011.
Meanwhile, the giant mobile phone manufacturer giant Nokia also plans to set up a mobile phone factory capitalized at 1.5 billion dollars in Bac Ninh province next year.
Most recently, Foxconn has restarted the project on building a mobile phone factory in Vinh Phuc province after a period of interruption due to the global economic crisis.
Why do foreign investors decide to set up mobile phone factories in Vietnam, while domestic investors do not? Experts believe that the key is not in the lack of capital, technology or production lines, but is in the market.
Over the past few years, tens of Vietnamese mobile phone brands have appeared on the market, such as Q-Mobile of ABTel, F-Mobile of FPT, Mobistar of P&T, Avio of VinaPhone, or Zik 3G of Viettel. Vu Huy Hoang Company owns three Vietnamese brands, namely Mobell, Cayon an K-Touch.
However, the products have been outsourced to China, while the brands’ owners do not have production factories in Vietnam.
A manager of FPT Mobile also said that Vietnamese enterprises should only consider setting up factories only when they can see a big enough market. Meanwhile, the domestic market, which Vietnamese brands are targeting, remains very small.
However, the situation proves to be quite different for foreign mobile manufacturers. They have big and diversified export markets all over the world.
vietnamnews
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