Groz-Beckert KG

Newsletter 2 | 2011

Groz-Beckert Vietnam –
more flexibility in Asia

After several years of planning and construction, Groz-Beckert has now arrived in Vietnam. Production is up and running, and developing at a rapid pace. Join us as we describe the company's exciting journey from Albstadt to Vietnam!

Why Vietnam?

zoom
2006....

In 2006 the textile industry had been streaming to Asia for years, establishing a presence in the region in order to reach its customers quickly via short paths. Countries like Vietnam, Cambodia and Laos, among others, were making efforts to attract international investors. But were the basic framework conditions adequate?

A stable political and legal system, good infrastructure and sufficient manpower formed the foundations of an ideal investment climate. In a comparison of the different countries, Vietnam was an appealing candidate. It had embraced the modern world and was eager for international acclaim as an economic partner. Its membership of ASEAN and AFTA as well as WTO all offered security and new opportunities. The human factor was also decisive: Vietnamese people are greatly attracted to crafts and technology.

In 2007 Groz-Beckert decided on Vietnam. The plan: to build a production plant for knitting and sewing machine needles plus system components, to complement the plants in India and China. The objective was to create a state-of-the-art production plant that would employ around 600 people by the year 2016.


But where could the plant be built?

The regions around Hanoi and Ho Chi Minh City offered very good infrastructure, but were quite a challenge in terms of workforce availability. Investment zones outside the metropolitan areas provided only limited scope for creative construction. The remaining alternative was to build "out in the countryside." This would be a time-consuming and tricky task that would impose certain natural limitations on investment. Groz-Beckert decided to rise to this challenge, and chose a site roughly 25 km outside the city of Da Nang.

A factory is built

Extensive preliminary work and foundation formalities were followed by acquisition of the sought-after investment licence in April 2008. The plan gradually took on shape.

For the countryside location outside Da Nang, land-use rights for 50 years had to be applied for - because foreigners are not allowed to purchase land in Vietnam. This process required patience but involved no serious problems.

The construction period was complicated and also exciting. The decision to solve problems creatively rather than relying blindly on bureaucracy turned out to be very helpful indeed.

The building was ready for occupation by August 2010, and production started just one month later. The focus was, as ever, on thorough training of all local employees. Basic mechanical training was followed by an intensive course in needle production. Experienced specialists were on hand to pass on their expertise and to train their Vietnamese colleagues.

Completion

zoom

After almost five years, Groz-Beckert has achieved its objective.

The official opening ceremony for the Groz-Beckert Vietnam plant took place on March 4, 2011, and was attended by members of the Management Board as well as invited guests from industry and politics. German and Vietnamese employees experienced this day as a milestone in the company's history. In retrospect everyone agrees that Vietnam was definitely the right choice! The entire project has been a positive intercultural experience - and the course has now been set for the future.