Vietnamese enterprises earned US$ 8.6 billion from processing for foreign enterprises

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Textiles and garments topped with US$ 4.1 billion, accounting for 48% of the total processing cost. Photo: L.D

It was released by the General Statistics Office at the Press Conference on the official results of the 2017 Economic Survey held on 19th September 2018.

Accordingly, for goods processing for foreign enterprises, the General Statistics Office has collected information on the goods processing for foreign enterprises of Vietnamese enterprises engaged in processing and manufacturing commodity groups: textiles and garments, footwear, electronic computer, phones and other goods.

The results have shown that the total processing costs for Vietnamese enterprises’ earnings from goods processing and assembly for foreign enterprises in 2016 reached US$ 8.6 billion. In which, the processing cost of textiles and garments and footwear accounted for the largest proportion in goods processing and assembly for foreign enterprises.

Specifically, the textiles and garments topped US$ 4.1 billion, accounting for 48% of total processing cost; Footwear was US$ 2.7 billion, accounting for 32% of total processing costs; phone assembling costs were US$ 268 million, accounting for 3.1%; Electronics and computer assembly costs were US$ 63 million, accounting for 0.7%, and processing costs for other goods earned US$ 1.4 billion accounting for 16.2%.

Total value of imported materials for processing and assembly reached US$ 20.2 billion, accounting for 11.5% of total import turnover of the country. Export turnover of processed products reached US$ 32.4 billion, accounting for 18% of total Vietnam’s export turnover.

Of which, FDI enterprises accounted for the largest proportion with the value of processed goods being 25.6 US$ billion, accounting for 78.9% of total value of processed goods. Along with that, imported raw material for processing for FDI enterprises was US$ 16.3 billion, accounting for 80.5% of the total value of imported raw materials.

Major partners ordering Vietnamese enterprises’ goods for processing and assembly in 2016, included 5 countries and territories: South Korea, Taiwan, China, the USA and Japan.

Hence, in 2016 the goods processing of Vietnamese enterprises brought US$ 8.6 billion of foreign currency revenues to the economy and created jobs for more than 1 million laborers.

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For the outsourcing of foreign enterprises for goods processing and assembly, in 2016, total cost paid by Vietnamese to foreign partners was US$ 8.2 million.

Of which, the cost for computers was US$ 6 million, accounting for 72.5% of total cost paid to foreign partners; Textiles and Garments was US$ 0.5 million, accounting for 6.3%, and for other commodity groups, was US$ 1.7 million, accounting for 21%.

According to the General Statistics Office, processing costs paid by Vietnamese enterprises to foreign partners compared to the total value of processed goods is quite high at 56.2%. Thus, in addition to processing costs paid to foreign enterprises, Vietnamese enterprises also have to pay costs for the purchase of raw materials and components for processing and assembly.