Garment workers at a textile company. — VNA/VNS Photo Trần Lê Lâm

Having overcome the challenges of early 2024, Vietnamese businesses are now more optimistic about their future operations.

"We are accelerating the construction of 100 automated and high-efficiency factories for foreign investors, which will be fully occupied upon completion," Chairman of Việt Hương Group Hàng Vay Chi said.

These factories mainly serve investors from Taiwan (China). Taiwanese investors are attracted to Việt Nam's competitive advantages, including a young and skilled workforce, a stable business environment, low labour and construction costs and a strategic geographic location. The robust involvement in various free trade agreements (FTAs) is also a significant draw.

Chi said the Vietnamese Government's continuous support in improving the business environment through administrative simplifications and cost reductions has also created favourable conditions for businesses to thrive.

Unlike in 2023, when orders were scarce, Chairman of Thành Công Textile Garment Investment Trading JSC Trần Như Tùng is now able to plan for 2025, given the full order book for the entire year of 2024.

The company has also achieved efficient business performance, as revenue and post-tax profit in the first six months of 2024 exceeded the same period in 2023.

Tùng expects 2024 revenue to reach around US$158 million and net profit to nearly $6.7 million, representing increases of 12 per cent and 21 per cent respectively, compared to the previous year.

International surveys also show that business optimism is returning, driven by Vietnamese companies receiving more orders, expanding operations and focusing on construction investment.

A report from S&P Global Market on Việt Nam's Purchasing Managers' Index (PMI) indicated that in July 2024, the PMI reached 54.7 points, with order growth outpacing that of June. It signals a strong increase in orders for Vietnamese businesses.

“The fact that the Vietnamese manufacturing sector was able to sustain the strong expansion seen in June through into July adds to optimism that we are at the start of a good spell of growth that will help drive the wider economy forward,” Economics Director at S&P Global Market Intelligence, Andrew Harker, said.

"The main issue for firms at present is keeping up with demand,” he added. "Manufacturers will need to expand workforce numbers more quickly and continue to secure additional materials should current trends in new orders be sustained in the months ahead."

A recent survey by UOB Bank of hundreds of Vietnamese enterprises found that most companies are positive about business prospects in 2024. They believe that the business environment is increasingly conducive to sustaining revenue growth.

Many Vietnamese companies operating in the industrial, oil and gas, manufacturing and engineering sectors are particularly keen on penetrating international markets.

VinaCapital’s Chief Economist Michael Kokalari also said that many Vietnamese companies in logistics, aviation, seaports and industrial parks are experiencing rapid growth.

This surge is attributed to the robust growth of exports in the first half of 2024, which has driven up the volume of goods transported by air and sea in Việt Nam.

Higher exports are encouraging more foreign direct investment (FDI).

According to the Foreign Investment Agency, as of July 20, registered foreign investment in Việt Nam reached over $18 billion, an 11 per cent increase year-on-year. Meanwhile, disbursed capital reached over $12.5 billion, up 8.4 per cent year-on-year.

Most multinational manufacturing companies are building factories in industrial parks and those producing high-tech products are driving up industrial park rental prices, as they are often less sensitive to industrial land lease prices compared to businesses manufacturing low-value-added products, such as garments or furniture.

This trend is helping Vietnamese industrial park management companies achieve better business performance. — VNS