Top Nike and Adidas Manufacturing Plant Moves to Vietnam

Pou Chen Corp - a Taiwanese footwear company specializing in manufacturing for Nike and Adidas - plans to move its factory to Vietnam to take advantage of opportunities from the TPP.

Nikkei news agency reported that Pou Chen is currently the largest leather and footwear manufacturer in the world, specializing in supplying goods to two world-famous brands, Nike and Adidas, along with many other major brands.

As of the end of September 2015, the number of shoes produced by Pou Chen in Vietnam accounted for 42% of the company's total output, a significant increase compared to 34% in 2013 and 39% in 2014. It is known that the total output of Pou Chen (headquartered in Taiwan) is more than 300 million pairs/year, while sales from shoes and apparel account for 75% of the company's total revenue.

Pou Chen representative Amos Ho said the company has been gradually moving its production base to Vietnam since 2012 because of rising wages and benefits costs for workers in China in recent years.

It is estimated that more than 40% of Nike's manufactured goods are produced in Vietnam. (Illustration: Internet).

In particular, a strike by thousands of workers in Dongguan city, China, demanding more benefits last year was a factor that prompted Pou Chen to make the decision to move the factory to Vietnam. To settle this strike, the company had to pay up to 90 million USD.

In addition, Amos Ho said that stable economic and political conditions in Vietnam are also one of the factors that make Pou Chen want to do business in this country.

Pou Chen is not the only company moving production to Vietnam. Many Taiwanese companies are now actively investing in Vietnam, including Pou Chen’s competitor Feng Tay (more than 50% of its production is concentrated in Vietnam). Far Eastern New Century (FENC) also planned to invest 307 million USD in a new factory in Vietnam in June and is expected to start production in the second half of 2016.

Nikkei quoted Peggy Shih, an analyst at Yuanta Securities Investment Consulting, as saying that footwear suppliers are actively moving factories to Vietnam to take advantage of opportunities brought about by the Trans-Pacific Partnership (TPP).

According to this expert, once the TPP is approved, goods from TPP member countries exported to the US market will enjoy preferential tariffs. At that time, famous international brands such as Nike and Adidas will order more goods produced in Vietnam./.

According to VOV.VN