The Schaeffler Group (Germany, parent of INA / FAG Bearings) has begun manufacturing bearings at a facility in Vietnam, even as groundbreaking has just taken place on a greenfield factory there.
FAG has had a sales office in Vietnam since 2001; the decision to build a manufacturing plant there was made just over a year ago, through Schaeffler Vietnam Co. Ltd.
Phan Thanh Minh Tam, head of Schaeffler Vietnam, said the company has budgeted at least USD $117 million for investment in the country by 2011. That total includes a greenfield bearing manufacturing plant in southern Dong Nai Province's Amata Industrial Zone.
Scheduled for completion in 2010, the Amata factory will have a final capacity of 200 million bearings per year and employ nearly 1,000 workers.
In the meantime, manufacturing equipment was sent to Vietnam, installed at a leased facility, and bearing production actually began in December 2007.
Vietnam (more properly, the Socialist Republic of Vietnam) is widely viewed as the next stop in the never-ending process of finding the lowest cost production area in a politically stable country, ideally offering an expanding market opportunity. China has been losing its low-cost-producer mantle as infrastructure, raw material and labor costs have risen sharply in recent years. India, the Philippines, and Vietnam are next on the list for many international manufacturers. In addition, southeast Asia is expected to experience significant economic growth in the coming years.
In the 2006 launch of its Singapore operations, Schaeffler President and CEO, Juergen Geissinger, said: "The Schaeffler Group attaches great importance to the Singapore location as ASEAN is a growth region with excellent future potential. We closely follow our 'In the region - for the region' strategy. Our clients benefit from our customer-oriented, innovative development services and our comprehensive product range."
Trade relations between the U.S. and Vietnam were normalized in 2006, and Vietnam joined the World Trade Organization in January 2007.
The U.S. Commercial Service website for doing business in Vietnam is here:
http://www.buyusa.gov/vietnam/en/
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