Sep. 10, 2020
Establishment of Electronics Manufacturing Service (EMS) Company in Vietnam
Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Masayuki Hyodo), through its subsidiary Sumitronics Corporation (Head Office: Chiyoda-ku, Tokyo; President and CEO: Keiya Endo; hereafter, “Sumitronics”), an electronics manufacturing service (EMS) provider, will establish Sumitronics Vietnam Co., Ltd. (Head Office: Hanoi, Vietnam; hereafter, “STX-V”) with the aim of expanding its EMS business to Vietnam.
Vietnam enjoys a stable political climate and a wealth of high-quality labor resources, increasingly attracting the attention of businesses as a production site under their “China Plus One” strategy. Direct investment from Japan totaled US$8.34 billion in 2018, making Japan the leading foreign investor in Vietnam, and further expansion by Japanese companies is anticipated. In addition, due to the impact of the ongoing US-China trade friction, businesses manufacturing products in China for export to North America are accelerating their production shift to Vietnam. In 2019 Vietnam achieved a GDP growth rate of over seven percent, maintaining this level for the second consecutive year, and high growth is expected to continue in the coming years. Driven by Vietnam’s growing domestic demand and exports, primarily of automobiles and home appliances, EMS business is projected to show further growth in the country.
STX-V will provide high-quality and reliable EMS to businesses manufacturing office automation equipment, domestic appliances, in-car equipment, and industrial equipment in Vietnam. The EMS provider will also look to collaborate with the industrial park and logistics businesses undertaken by Sumitomo Corporation in Vietnam. In the long term, STX-V will also aim to strengthen its relationships with customers in North America, Europe, and Southeast Asia in addition to those in Vietnam. Scheduled to commence operation in September 2020, the company aims to achieve annual revenue of 10 billion yen within five years.
Sumitomo Corporation entered the field of EMS operations in the 1990s and has expanded its business to 10 bases in eight countries overseas through the Sumitronics Group. Through STX-V, the Company aims to capture demand in various industrial sectors of the fast-growing Vietnamese market to expand earnings. Furthermore, while responding to the needs of electronics-related businesses in new industrial sectors where growth is anticipated, including the medical and environmental infrastructure fields, Sumitomo Corporation will also strive for further business growth by strengthening its EMS network on a global basis.
■Outline of STX-V
|Company name||:||Sumitronics Vietnam Co., Ltd.|
|Location of head office||:||Hanoi, Vietnam|
|Interest in the company||:||Sumitronics: 100%|
■Sumitomo Corporation’s Material Issues
Sumitomo Corporation Group positions “Six Material Issues to Achieve Sustainable Growth with Society” as an important factor in developing business strategies and in the decision-making process for individual businesses. Going forward, we will pursue sustainable growth by resolving these issues through our business activities. This project especially contributes to “Contributing to the Development of Local Communities and Industries” and “Establishing a Foundation for Comfortable and Enriching Lifestyles”.