German tape manufacturer Tesa plans to build a 55 million euro (US$65 million) factory in the north of Viet Nam in an effort to expand its production from 2023, according to Germany’s Handelsblatt newspaper.

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

Therefore, Tesa is not alone in choosing Viet Nam. 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 Viet Nam, 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 US is expected to increase more than $20 billion by the end of 2023. Meanwhile, the movement of goods between Southeast Asia and China is set to expand more than $40 billion.

Viet Nam, 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 per cent this year, the article said.

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

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