Adidas leads the way for German companies in Vietnam
HO CHI MINH CITY - The 8,500 employees at the Adidas factory on the outskirts of Ho Chi Minh Stadt - formerly Saigon - are better paid than average Vietnamese workers: they earn the equivalent of about 70 euros (93 dollars) a month. And each month they cut and sew by hand some 650,000 pairs of shoes to be sold around the globe.
'For us it's a mini-factory,' says Kur Wojciech, the factory's managing director. Other Asian factories of the German sporting-goods manufacturer are a lot bigger.
Based in the Bavarian town of Herzogenaurach, near Nuremberg, Adidas does almost all of its manufacturing in Asia, largely in Communist Vietnam. It is not the only German company to have discovered the Southeast Asian country, which for a long time stood in the shadow of China and India.
'A rush on Vietnam has begun,' said Jan Noether, head of the German Chamber of Industry and Commerce in Hanoi. Several hundred German companies are already operating in Vietnam. They include the electronic and engineering giant Siemens and the shirt-maker Van Laack, which has been manufacturing there for more than a decade.
With wages in China and India having reached Western levels in some sectors, an increasing number of companies are looking for production sites elsewhere. One alternative is Vietnam, more than 70 percent of whose population is under 30 years of age and hell-bent on moving the country forward.
'When this enthusiasm is coupled with know-how in a few years, we in Europe are going to have to watch out,' Noether said.
Boasting GDP growth of more than 8 percent annually, Vietnam already has the hottest economy in the region outside of China. Many German visitors are overwhelmed by the country's dynamism.
'I can't help worrying whether we can hold our own,' said Edmund Stoiber, Bavaria's premier and leader of Germany's conservative Christian Social Union.
Stoiber, on a four-nation Asian tour, made the comment during a two-day stay in Vietnam. He said that Adidas was an example of a German company that had ensured its success by moving production overseas while retaining numerous high-level jobs at home.
In youthful Vietnam, Germany's troubles with its low birth rate and aging population seem like legends from another world. In evidence everywhere is a country on the move. Vietnam's streets teem with honking motorcycles whose riders have no time to lose.
Since joining the World Trade Organisation last January, Vietnam's top economic priority has been infrastructure expansion.
A new airport and underground railway planned for Ho Chi Minh City are aimed at coping with its crush of people. Vietnam Airlines, the national carrier, plans to purchase new airplanes, and Airbus and Siemens are well placed in the race for orders.
Vietnam's population is expected to grow from some 85 million to 100 million by 2015, while Germany's population drops.
Deutsche Presse Agentur - April 2, 2007.
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