NEWS & EVENTS

The material in Vietnam vs China

16/10/2020
Material has always been the hot topic of discussion when we talk about the alternative sourcing countries to China
The material in Vietnam vs China
It’s undeniable that China has an overwhelming advantage when it’s come to material availability and pricing in most cases. Despite having a lower labor cost, it’s often to find that manufacturing pricing from Vietnam is significantly more expensive than China(I wrote an article about this myth earlier this year )
 

The material situation in Vietnam

However, it doesn’t mean that countries like Vietnam don’t stand a chance when it comes to manufacturing.

For the last 2 years, our effort in trying to move some supply chain from China to Vietnam has got some success: Some of our machining projects in Vietnam have got similar pricing to China and Taiwan. Our aluminum dies casting and forging are competitive. One of our copper stamping and machining in Vietnam is even slightly more competitive than what China can offer.

The first key is to filter the correct kind of product and demands before we even analyze the pricing and feasibility of a project.

  • In general, for simple components with a high percentage of material value, It is very hard for a Vietnamese workshop to compete with our China counterpart.
  • The consumer product is another field that we normally don’t prefer to bring to Vietnam. Simply because of the sheer volume in China, their factories can deliver a much lower price.

Vietnam factories will be able to shine for a product that:

  • Is a combination of different processes.
  • Is an assembly of multiple components.
  • Is an industrial product with rather high technical requirements.

Secondly, it’s always better to understand the application of the product. And maintain precise communication with the customer to propose an alternative material option for the job. We do it for almost every NPI project so far in Vietnam.

(an example of our Engineering Change Notice (ECN) communication with our customer)

Material price in Vietnam

So be thoughtful with your work. Happy hunting 🙂

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