Manufacturing

Vietnam is now a major exporter in the key sectors of telecommunications equipment, computer parts, footwear and garments.

According to the International Labour Organization’s (ILO), in 2019 approximately one-quarter (25.4%) of female employment in Vietnam was in the industrial sector; with almost all of those females (91.2%) employed in manufacturing compared to 54.5% of men. Given their numerical dominance, compared to men, women were adversely affected by the economic downturn in international demand for manufactured goods and order cancellations, although the sector is now rebounding⁴². This highlights the importance of understanding and addressing gender considerations in engagement with Vietnam’s manufacturing sector.

Trade

Vietnamese manufacturers are a source of an ever expanding range of quality products for Australian consumers. Australia imports a significant amount of telecommunications equipment (A$1.52 billion in 2020), footwear (A$546 million), monitors and televisions (A$448 million), furniture (A$327 million), office machines (A$168 million), computers (A$137 million), prams, toys, games and sporting goods (A$129 million) from Vietnam, among other products⁴⁴.

Many simply transformed manufactures exports, particularly Australian metals such as aluminum (A$273 million in 2020), copper (A$232 million), zinc (A$143 million) and lead (A$100 million) are essential inputs for Vietnam’s growing manufacturing capacity⁴⁵.

Investment

To supplement their domestic operations and make the most of Vietnam’s comparative advantage in manufacturing, a number of Australian companies have significant investments in Vietnam. These companies are joined by a growing cohort of Australian small and medium enterprises looking to expand and diversify their manufacturing capacity.

Western Australian shipbuilder Austal is capitalising on Vietnam’s expertise as part of a strategy to expand its manufacturing operations for commercial vessels at its production facility in Vung Tau province.

Bluescope operates three high-tech steel production plants in Vietnam, servicing many of the country’s major construction projects across industrial, commercial and residential sectors.

Dubbo-based Australian construction materials, equipment and service provider MAAS Group has operated a custom-built facility in Dong Nai province since 2019.

Further opportunities

There are a wide range of opportunities to increase Vietnam’s manufacturing exports to Australia. In 2020, Australia imported a total of A$233 billion (by value) in manufacturing products but only A$5.2 billion (2.2%) of these came from Vietnam⁴⁶. There is significant room for a greater number of Vietnamese manufacturing products to enter the Australian market.

Similarly, there are significant opportunities for Vietnamese companies to invest in Australia’s manufacturing sector, to help create jobs and expand economic activity. This could include investment in raw inputs or intermediate goods for supply chains. For example, Hoa Phat’s iron ore investment, outlined above, will use Australian minerals to fuel its steel production and manufacturing industry.