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Vietnam drops in attractive manufacturing destination list
Vietnam slipped to fifth place from top in the list of most attractive emerging markets for investments in manufacturing, an annual survey by business advisory group PricewaterhouseCoopers (PwC) has found.
With an Index Value of 85 on the PwC EM20 Index, it trailed behind Egypt (95), Bulgaria (93), Serbia (88) and India (86).
PwC ranked 20 developing countries based on labor costs, strategic geographic location and country risks. The PwC EM20 Index, thus, provides a risk-adjusted measure of the relative value created per dollar invested in businesses in key emerging markets.
The BRIC countries (Brazil, Russia, India and China) continue to offer good opportunities for investment.
The change in ranks reflects mostly changes in the selection of countries PwC considered for the update.
A number of countries studied last year, for example the Czech Republic, Hungary and Saudi Arabia, no longer meet the criteria for inclusion in the list.
In addition, the top three countries this year were not in the list last year.
The report said that for manufacturing companies seeking to invest in emerging markets, low production costs are, of course, essential but other facts come into play, including a country’s risk premium, its distance from key export markets, and local taxes.
In the neighborhood, Thailand (11th/Index value 82), Malaysia (13th/81) and China (14th/81) ranked below Vietnam.
Cambodia did not qualify for inclusion in the top 20 of the Manufacturing Index, largely due to the small size of its current manufacturing base.
But the country has been identified as a location with a promising future for manufacturing investment due to the wide availability of low-cost labor and its falling risk premium.
Although countries like Cambodia and Vietnam are still relatively small economies, their low-cost bases can sometimes offer higher margins to manufacturers, the survey said.
VNN
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