Valuetronics said Thursday its wholly owned subsidiary Valuetronics Asia has set up a wholly owned subsidiary in Vietnam to expand its operations in the country as it shifts some manufacturing out of China.
The new subsidiary, Valuetronics Vietnam Co. Ltd., or VVCL, will have capital of US$11.28 million, or around 262.12 billion dong, Valuetronics said in a filing to SGX.
“With its expansion in Vietnam, the group will have two standalone integrated manufacturing footprints – one in China and the other in Southeast Asia, in order to serve the needs of its global customers and support their diversified procurement strategies,” Valuetronics said.
Valuetronics said its Vietnam expansion has been proceeding as planned, with its first leased facility there qualified by a dedicated customer, with mass production beginning in June and shipments made to the U.S. market.
That first facility’s landlord, a local manufacturer, has provided administrative support on logistics and recruitment, allowing the company to acquire local experience for ramping up operations in Vietnam, Valuetronics said.
With the formation of VVCL, Valuetronics said it would be entering a sub-lease agreement with an industrial park run by a Japanese company for around 50,000 square meters of land to build a Vietnam campus around 40 kilometers north of Hanoi city; the land-use right acquisition cost around US$4 million, it said.
The new campus will be built in two phases, with the first phase beginning in the first half of next year and with completion expected by the first half of 2021, Valuetronics said.
In the meantime, Valuetronics said it would lease an around 4,000 square meter standard factory in the same industrial park to meet urgent customer demand for manufacturing services outside China.