Cambodia ranks top for lowest operating costs
Business transformation consultancy company TMX released the report, The Great Supply Chain Migration – Breaking down the Cost of Doing Business in Asia.
It delves into the average costs of doing business in Asia and the corresponding country competitiveness across nine popular potential manufacturing locations: Cambodia, India, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
Cambodia was reported to have the lowest operating costs among nine countries in Asia, ahead of Myanmar and Vietnam, according to Asia-Pacific’s leading business transformation consultancy TMX.
Under the recent TMX report “The great supply chain migration – breaking down the cost of doing business in Asia,” the average total operating cost for a manufacturing company in Việt Nam ranges from US$79,280 to $209,087 per month, compared to leader Singapore at $366,561 and second-placed Thailand at $142,344.
As for labor, which forms up to 55 percent of the total costs across the countries, Cambodia, Myanmar, and the Philippines, with an average $108,196 per month while Viet Nam ranked fourth most affordable, after, according to the report.
Việt Nam, along with several other countries like Thailand and the Philippines, offers a sizable and relatively affordable pool of labor. While Việt Nam offers abundant employment opportunities, it has fewer highly skilled talent in many sectors with talent competitiveness of around 35 points, compared to 40 points for the Philippines and Thailand, the report said.
Regarding the competitive scorecard, Việt Nam was rated fifth behind Singapore, Malaysia, India, and Thailand.
In respect of warehouse rental, the second-largest factor in the total cost of each of the nine countries, Cambodia ranked third behind Thailand and Myanmar followed by Việt Nam in terms of affordable costs.
When it comes to logistics costs, Việt Nam was classified as a high potential market, which means that the country has relatively higher logistics expenses but is capable of expanding its operations.
Except for Singapore, the other eight countries fell into at least one of the three stages of the manufacturing value chain, comprising ‘basic assembly lines,’ ‘developing supply chains,’ and ‘early automation.’
Countries in the first stage – Cambodia, and Myanmar – are suitable manufacturing bases for businesses in sectors like textiles and garments.
Meanwhile, the likes of the Philippines, Indonesia, and Việt Nam, which are categorized in the intersection of the first two stages, offer good bases for businesses in sectors like electronics, which do not require manufacturing sophistication or highly skilled labor, according to the report.
SOURCE: NEWS AGENCIES