German tape manufacturer Tesa plans to build a 55 million EUR (65 million USD) factory in Northern Vietnam in an effort to expand its production as from 2023, according to Germany’s Handelsblatt newspaper.

Berlin (VNA) – German tape manufacturer Tesa plans to build a 55 million EUR (65 million USD) factory in Northern Vietnam in an effort to expand its production as from 2023, according to Germany’s Handelsblatt newspaper.

In an article published on August 13, the newspaper said the coronavirus has shown how companies have to face risks as supply chains rely on each single country.

Therefore, Telsa is not alone in choosing Vietnam. In recent years, the Southeast Asian nation has become a popular option for companies that want to expand their production network in Asia.

The virus is intensifying the trend, according to the article. ASEAN countries, including Vietnam, see themselves in a good position to benefit from the trend.

The article cited an analysis by consultancy firm BCG as saying that Southeast Asia is moving towards the centre of globalisation.

The trade volume between Southeast Asia and Europe as well as the America is expected to increase more than 20 billion USD by the end of 2023. Meanwhile, the movement of goods between Southeast Asia and China is set to expand more than 40 billion USD.

Vietnam, which has a population of around 100 million, is said to have particularly good prospects of taking advantage of the development.

The International Monetary Fund forecast that the country can expect economic growth of almost 3 percent this year, the article said.

The EU-Vietnam Free Trade Agreement (EVFTA) that has become effective since August 1 is a reason that makes Vietnam more attractive to foreign investors.

The article said Marko Walde, Chief Representative of the German Chamber of Industry and Commerce in Vietnam, expressed his belief that Vietnam will not only become more attractive as an investment destination, but will hold great importance in the development of alternative supply chains.

Apart from Europe, Vietnam has joined countries such as Japan, Canada and Mexico in a free trade area with since 2018 through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The country has also participated in the negotiations of the Regional Comprehensive Economic Partnership (RCEP), including China and Australia. Another free trade agreement with the US is also under discussion.

Vietnam's openness to globalisation has helped the country to lure numerous big corporations.

Apple moved around one third of its production of wireless headphones to Vietnam. Meanwhile, Google and Microsoft have accelerated their plans to relocate part of their hardware production to the country. As for Samsung, Vietnam has been an important production location for years as more than half of its phones are made in factories in the country, the article said. /.

Source: VNA