Vietnamese export concerns after Galaxy Note 7 crisis

Several experts have expressed concerns that Vietnam's exports could be affected by the Samsung Galaxy Note 7 crisis.


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The battery problem that causes the Galaxy Note 7 to overheat and pose a fire hazard forced Samsung to recall the devices worldwide and permanently halted production and sales of the device.

The decision has caused considerable damage to the South Korean corporation. Samsung shares plunged 8%, to their lowest value since 2008, costing them USD17bn.

Samsung is one of Vietnam's largest investors and has contributed greatly to the country's exports. It has factories in the provinces of Bac Ninh and Thai Nguyen that provide 35% of Samsung’s total output. Since Vietnam's exports depend on Samsung devices, it may be affected by a halt in production.

Ngo Tri Long, former head of the Institute for Market and Price Research, said Vietnam would definitely be affected, but how much would depend on the Galaxy Note 7's export ratio and other impacts from the production halt.

Samsung's representative refused to say how many of the devices had been produced in Vietnam. He said. "The two factories in Vietnam produce the Galaxy Note 7, and also other types of smartphones and tablets."

He went on to say the crisis wouldn't affect this year’s export turnover.

According to the Ministry of Industry and Trade, about 12,633 devices were sold in Vietnam from August 19 to September 7. Vietnam’s General Statistics Office said the Galaxy Note 7 problem was one of the reasons for Vietnam’s export turnover in first nine months to fall 6.8%, about USD1.1bn.

According to the report, in August, smartphone export turn-over increased after Samsung released the Galaxy Note 7. But in the next month, turnover was affected after the devices were recalled. Smartphones and spare parts export turnover tumbled USD506m in September.

During the conference on the macro-economy for the third quarter held by Vietnam Institute for Economic and Policy Research, Vu Dinh Anh from the Ministry of Finance's Institute of Vietnam Economics, also raised concerns, saying that Vietnam's exports had depended greatly on Samsung for the past three years.

Meanwhile, Nguyen Mai, chairman of Vietnam Association of Foreign Invested Enterprises, said the impact might not be big as Vietnam was approaching the end of the year and the Galaxy Note 7 was only one of many devices that Samsung produces in Vietnam.

"However, Vietnam may not be able to meet the target export growth of 10% since the growth rate after the first nine months was only 6.7%," he said.

Dtinews