Stop in production of Samsung Galaxy Note affects Vietnamese enterprises

20.10.2016

VietNamNet Bridge – On October 12, Samsung announced that it will stop making Galaxy Note 7 after realizing that the phone may still bring high risks to users despite great efforts to improve the product.

 Bao Viet Securities Company has warned that the issue with Samsung may have adverse effects to Vietnam’s exports in the upcoming months.

Samsung Electronics Vietnam (SEV) has two factories in Vietnam, located in the northern provinces of Thai Nguyen and Bac Ninh which put out 35 percent of total Samsung’s smartphones products all over the globe.

In 2015, Samsung exported $32.7 billion worth of products, while the figure is expected to reach $34.4 billion this year, equal to 20 percent of Vietnam’s total export turnover.

 

There are no official statistics about the contribution of Note 7 to Samsung’s total export turnover. 

However, a report by the General Statistics Office (GSO) showed that Vietnam’s phone and electronic component exports in September was estimated at $2.4 billion, a sharp decrease of 18 percent compared with August. 

The reason, according to GSO, were related to the problems with Samsung’s Note 7.

Bao Viet Securities has every reason to predict that Vietnam’s export turnover will bear negative influences in the months to come.

Meanwhile, analysts have warned that some of Samsung’s partners would suffer from Samsung’s trouble. 

The Gioi Di Dong (MWG), a mobile phone distribution chain, is one of them. 

A report showed that the sales of Samsung’s products at The Gioi Di Dong are about VND1 trillion a month since July 2016. 

The distributor hoped that Samsung product sales would climb to VND1.5 trillion in December which means total revenue of VND12 trillion from the products this year.

However, in the two latest trading sessions, MWG shares still saw prices increasing to the ceiling floor in one session and increasing slightly by 0.3 percent in another. 

Logistics are also believed to suffer from the trouble with Samsung. However, the HCM City Securities Company believes that the impact would not be high.

Samsung now imports and exports components/finished products through Noi Bai International Airport in Hanoi. 

NCT is a major service provider at the airport.

However, sources said NCT once provided services to Samsung, but the services have been transferred to a joint venture between Samsung and ALS.

ACV, which is running Noi Bai Airport, may be influenced also. However, ACV shares are not listed on the bourse.

Source: Vietnam.net

Photo: Samsung