Vietnam has the second lowest operating costs among nine countries in Asia and is assessed to have high logistics development potential, a report says.
Workers make garment products at a factory in Ho Chi Minh City on October 21, 2021. Photo by VnExpress/Quynh Tran
The monthly minimum operating cost for a manufacturing company in Vietnam is $79,280, compared to leader Singapore at $366,561 and second placed Thailand at $142,344, according to a report by Singapore-based business transformation consultancy TMX.
The report says the minimum operating cost in Vietnam is only higher than Cambodia’s at $65,313. The report calculated the average costs of doing business in nine popular potential manufacturing locations in Asia: Cambodia, India, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Vietnam, along with several other countries like Thailand and the Philippines, offers a sizable and relatively affordable pool of labor.
While Vietnam offers abundant employment opportunities, it has fewer highly skilled talent in many sectors with a talent competitiveness of around 35 points, compared to the 40 points for the Philippines and Thailand.
Warehouse rentals in Vietnam is the same as others at eight other countries, the report said.
The report also said that Vietnam was the only country in the "high potential" group in terms of logistics costs.
In the overall country competitiveness scorecard, it ranks fifth behind Singapore, Malaysia, India and Thailand.
"Vietnam has a better score in business environment. However, with a lower talent score, it indicates challenges for companies looking to find ready talent. Such businesses may consider investment in training and development," the report said.