Raw materials, energy, facilities, and labor: these are the elements necessary for a successful manufacturing base. The total package often comes with a high price tag, requiring many companies to cut corners on quality to produce their goods at a price point they can afford. This is especially true for durable goods made of metal. Lately, companies all over the globe are discovering Vietnam as an outsourcing destination for products made with metal. The reasons are clear. Vietnam has new industrial facilities, cheap skilled labor, and ample supplies of the metals commonly used in construction and consumer product manufacturing, including:
- Stainless steel
- Various alloys and base metals
These metals are used in a variety of consumer products that include:
- Auto parts
- Bicycle parts
- Utensils, cutlery, and cookware
- Hardware and tools
- HVAC components
- Infant strollers
- Home furnishings and décor
- Outdoor furnishings
Although Vietnam is not recognized as a global leader in metal production, it is one of the fastest-growing nations in the world in this sector. Having grown steadily for roughly a decade, Vietnam’s output increased by nearly 40 percent between 2017 and 2018 to a record high of 14.1 million tons of metal produced. The COVID-19 pandemic put a damper on production for a couple of years, but Vietnam’s successful mitigation of COVID spread has helped the country rebound more quickly than many East Asian countries.
Today, Vietnam exports about 25 million tons of steel annually to destinations all over the world, and its top exporters generate billions of dollars in revenue annually. Their biggest customers are their neighbors in the ASEAN region— Cambodia, Indonesia, Malaysia, and the Philippines—but the demand for Vietnamese steel is also growing in Germany, Italy, and other European markets, as well as Australia.
Due to government subsidies and foreign investment, Vietnam has been building modern facilities to process metal and produce goods for clients throughout the world. These new facilities feature state-of-the-art equipment and resources, such as paint and blast booths, ‘clean rooms’ to eliminate debris contamination, fully equipped offices and conference rooms, as well as a variety of cranes for lifting extremely heavy loads.
The skilled labor force is capable of any complex tasks related to metal work, such as welding and machining, laser cutting, plasma cutting, stamping, die-casting, extrusion, punching, bending, material finishing, turning and milling, blasting, painting, brake pressing and folding, shearing and forming, assembly and integration.
Vietnam is also setting its sights on the rare-earth minerals that are vital for the “green economy.” Currently, China has a near monopoly on materials needed for microchips, catalytic converters, wind turbines, and electric vehicles. Vietnam’s entry into this market could be a major advance for supply-chain resilience.
Vietnam’s domestic consumption of its metals remains relatively low, which means quality metal products can be purchased cheaply. However, as the country’s GDP grows, we expect the government’s commitment to modernizing its infrastructure will mean that more of Vietnam’s steel will be used domestically. It is inevitable the prices will rise, but at present, metal manufacturing in Vietnam is one of the industrial world’s great bargains.
In conclusion, Genimex produces high-quality products in Vietnam at globally competitive pricing. With a strong supplier base, low labor rates, and favorable duties in the US market, Vietnam could be the next best location to produce metal housewares, and hardware products. Reach out to us to learn more.