Vingroup JSC, Vietnam’s biggest listed firm by market value, said on Monday it has started work on a second smartphone factory with a capacity to produce 125 million units a year.
The new factory in the capital, Hanoi, will vastly increase Vingroup’s current capacity of five million units at its facility in the northern city of Haiphong, the conglomerate said in a statement. Reuters reports.
Construction is expected to be completed by early 2020 and the jump in capacity will help the company meet orders from Europe and the United States, Vingroup CEO Nguyen Viet Quang said in the statement.
“After a period of deploying and participating in the smartphone manufacturing industry, our products have been positively received by the market,” Quang said.
“We received many processing orders from major partners in Europe and the United States. That’s why we have invested in a factory with 25 times the capacity of our current factory in Haiphong, to meet with domestic and international demand,” he added.
A company spokesman declined to provide the names of the European and U.S. partners.
According to Reuters, Vingroup launched its smartphone brand, Vsmart, in December last year, seeking to win market share from popular brands Samsung and Apple in Vietnam, which has a population of 95 million people.
Vsmart phones use chips from Qualcomm and run Google’s Android operating system, and went on sale at a price of 3.39 million dong (US$145) to 6.59 million dong (US$282).
In March, the company began selling Vsmart phones in Spain and planned to expand into other European markets. Its phones went on sale in regional neighbour Myanmar last month.
It is part of a diversification strategy that has seen Vingroup, once focused on real estate and retail, become Vietnam’s first fully-fledged domestic carmaker in 2018.
Electronics is a vital part of Vietnam’s economy as firms such as Japan’s Sony Corp and South Korea’s LG Electronics and Samsung Electronics reorganise production in the face of slumping global demand.
Samsung said in December it will close one of its mobile phone plants in China as it focuses on low-cost countries like Vietnam, where it is the largest single foreign investor.
In April, LG Electronics said it would stop making smartphones in South Korea and move production to Vietnam.
South Korean chips-to-energy conglomerate SK Group said last month that it had agreed to buy 6.1per cent of Vingroup for US$1 billion as it expands its investments in Vietnam.
(US$1 = 23,354.0000 dong)
(Reporting by James Pearson; editing by Darren Schuettler)