14:16 | 28/10/2018 Industry
(VEN) - The General Statistics Office of Vietnam (GSO) recently released the 2017 Economic Census, which for the first time included the revenue generated by Vietnamese businesses from outsourcing for foreign manufacturers.
According to the census, Vietnamese businesses pocketed a total of US$8.6 billion in outsourcing in 2016. The garment and textile sector earned most with US$4.1 billion, followed by footwear with US$2.7 billion, phone assembly with US$268 million, and electronics and computer assembly with US$63 million.
Total value of imported materials for outsourcing reached US$20.2 billion, accounting for 11.5 percent of the country’s total import turnover. Export turnover of these products was US$32.4 billion, making up 18 percent of the country’s total export value.
GSO General Director Nguyen Bich Lam said foreign direct investment (FDI) businesses contributed US$25.6 billion to the total, or 78.9 percent. They also spent US$16.3 billion importing raw materials for their outsourcing activities, making up 80.5 percent of the total. That means domestic businesses only accounted for a small percentage, more than 19 percent of the import value and over 20 percent of the export value.
The Republic of Korea, Chinese Taipei, China, the US and Japan were Vietnam’s major outsourcing partners. Most processed products were shipped back to the ordering countries or third countries at the request of the ordering countries. Only some 3.9 percent of the total goods value was sold in Vietnam, of which garments and textiles accounted for one percent, and phones for 0.2 percent.
The total fees paid by Vietnamese businesses to foreign partners for outsourcing reached US$8.2 million in 2016. According to the GSO, outsourcing costs paid by Vietnamese businesses to foreign partners compared to the total value of finished products post-outsourcing was quite high at 56.2 percent. In addition, Vietnamese businesses had to pay costs for the purchase of raw materials and components for outsourcing.
In 2016, there were 1,740 businesses involved in outsourcing activities. Of these, some 1,687 firms provided
outsourcing services, while 52 firms sent materials to foreign businesses for processing. This brought the foreign
currency revenue to the economy of US$8.6 billion and creating jobs for more than one million workers.