German Adhesive Tape Manufacturer to Build 55 Million Euro Plant in Vietnam

4:30:53 PM | 29/5/2020

Tesa has recently made a public announcement that it will invest 55 million Euro in a tape adhesive plant in Vietnam, making it the 15th production site that Tesa operates worldwide beside large plants in Germany (Hamburg, Offenburg), Italy, the USA, and China.

The new facility will be located on a 70,000 square meter site in DEEP C Industrial Zones, an industrial park cluster in the port city of Haiphong in Northern Vietnam. Production will start in 2023 with approximately 140 employees in the first phase.

In Germany, Tesa is one of the most influential brand name in production of high-tech tape for electronics and automotive industries. This latest movement is a firm and timing step of the group to tap into the potential of the dynamic Asian adhesive tape market and build up its already strong position in this remarkable region.

The plant that Tesa has been operating in Suzhou, China will reach its full capacity in 2025 despite expansion. "The new plant in Vietnam creates the necessary capacity to ensure our growth targets in the largest and fastest growing region," explains Stefan Schmidt, head of Tesa Supply Network, responsible for purchasing, logistics, and production at Tesa worldwide.

Why Vietnam?

"Time-to-market is especially important to us. Access to markets, fast and flexible delivery to customers and the development of local raw materials are important factors in international competition." Says Stefan. Vietnam offers Tesa the best opportunities to shorten the way to customers and suppliers in Southeast Asia and China. Plus, a growing number of their important customers in automotive and electronics are relocating in Vietnam.

“Location has always been one of the most unique selling points of Vietnam when it comes to attracting FDI. Specifically, the port city of Haiphong has been on the radar of investors thanks to its massive upgrade of infrastructure in recent years”, said Koen Soenens, General Sales & Marketing Director at DEEP C Industrial Zones

Being world’s 15th populous country with over 96 million people at an average age of 31.7 years old, Vietnam is young and suitable for mass production. Notably, a significant number of new engineering, manufacturing and construction graduates is produced each year in Vietnam.

Positive outlook for FDI recovery

The International Monetary Fund, in a report published in April, expected Vietnam to be one among few countries with positive growth rates in 2020 despite the severe impact of the Covid-19 pandemic. In the first quarter of 2020, the country’s economic growth increased by 3.82 % and the manufacturing sector remained its role as economy leading driver at 7.12%. 

The fact that Tesa decides to land their expansion in Vietnam proves their confidence in the potential for development and sends a strong signal that FDI attraction is moving forward on a recovery path. After early success in containment of the virus and reopening of the economy, Vietnam has emerged to be a safe destination for foreign investor. “We are strongly convinced that the potential in the coming time is far greater than before as the Covid-19 pandemic has raised a serious concern over the concentration of production in one single country”, said Hans Kerstens, Senior Sales Manager at DEEP C Industrial Zones.

Sustainability vision

In Vietnam, Tesa is also investing in sustainability: 65% of the production volume will be made with solvent-free, water-based adhesives. For the plant planning, the company strives for certification according to the internationally recognized "LEED Gold Standard". Among other things, the use of solar energy and rainwater treatment are planned.

The deal between Tesa and DEEP C Industrial Zones was made party thanks to their compatibility in sustainability vision. Tesa aspires to sustainable high-tech tape production while DEEP C works toward realizing the first eco-industrial park concept in Vietnam with installation of solar panel on plant’s rooftop, construction of road made from plastic waste, generation of green energy, etc.

L.H (Vietnam Business Forum)