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Vietnamese furniture maker getting more order on China Tariff
No one wins from a trade war,” is a standard refrain among economists. Southeast Asian businesses are trying to prove that maxim wrong.
The region is capitalizing on a rush of new orders and production moves as firms reconsider their business in the U.S. and China amid a deepening trade war. About one-third of more than 430 American companies in China have or are considering moving production sites abroad amid the tensions, according to survey results released Sept. 13 by AmCham China and AmCham Shanghai. Southeast Asia was their top destination.
Vietnamese furniture producer Phu Tai Corp. is among those looking to cash in. The maker of home furnishings for Wal-Mart Stores Inc. outlets in the U.S. is planning for a 30 percent increase in its exports this year and in 2019, according to Deputy General Director Nguyen Sy Hoe. It’ll invest about $10 million to expand two factories at its base in Binh Dinh province and to upgrade production lines in two other factories in Dong Nai further south.
“We see this as a great chance to boost our exports to the U.S. as we’re getting more orders from that market,” Hoe said by phone Sept. 4. “Given the escalating trade war between China and the U.S., many American importers are switching to buy from Vietnam.”
Nguyen Thanh Phuong, chief executive officer of Kangaroo Group, a Vietnamese producer of home appliances, forecast a 10 percent increase in sales to the U.S. in the second half of 2018. His company has received orders from American clients who used to buy from Chinese makers, Phuong said in a Tuesday interview in Hanoi.
“The new U.S tariff is helping our products become more competitive against Chinese ones,” he said.
Malaysia furniture that might benefit in Vietnam Operation include Poh Huat Resources Holding Berhad and Latitude Tree Holdings Berhad.
Source: https://www.bloomberg.com/news/articles/2018-09-18/us-china-trade-tussle-is-creating-winners-in-southeast-asia
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4 people like this. Showing 12 of 12 comments
The Vietnam competitor increasing, mareial cost is a risk even coming qt based on history will good and usd better now.
2018-09-28 08:10
why only malaysia furniture player got factory in vietnam, china dont have?
2018-09-28 08:16
China has a lot of furniture factories in Vietnam till Poh Huat and Latitude Tree can't compete with them. You can read their QRs (Malaysian factories) mentioning that stiff competition with China factories.
2018-09-28 08:30
If u look at PoHuat's quarterly reports, Malaysian operation is doing fine but Vietnam operation's performance is deteriorating, mainly due to stiff competition from new China furniture manufacturing plant there, and higher operating cost such as increasing labour cost in Vietnam.
The trade war may benefit furniture manufacturers in Vietnam as a whole, but I wonder how much it can help PoHuat's deteriorating Vietnam operation..
2018-09-28 09:20
Anyway, the next 2 quarters are seasonal stronger quarters for PoHuat and strengthening of USD will boost profit. Thus, it is okay to hold and wait.
2018-09-28 09:21
yes, correct. According to Latitude boss, China manufacturers flooded the Vietnamese market (competing for export clients) and drove down price in past quarter. Apparently pohuat suffered also
Posted by Beza > Sep 28, 2018 08:30 AM | Report Abuse
China has a lot of furniture factories in Vietnam till Poh Huat and Latitude Tree can't compete with them. You can read their QRs (Malaysian factories) mentioning that stiff competition with China factories.
2018-09-28 10:13
but all these should be a thing of the past already. With the US trade war cutting off closed to USD20 bil furniture export from China, Vitetnam based manufacturers (be it China or Malaysian owned) now have more orders than they can digest. The depressed pricing should be gone already
2018-09-28 10:16
Icon8888 but all these should be a thing of the past already. With the US trade war cutting off closed to USD20 bil furniture export from China, Vietnam based manufacturers (be it China or Malaysian owned) now have more orders than they can digest. The depressed pricing should be gone already
Icon8888's comment is the most detailed and proper.expect furniture stocks to be darling stocks in late 2018.
2018-09-29 05:17
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But why poh huat is dropping?
2018-09-27 22:38