OVERVIEW

• Vietnam’s exports to the US grow 30%; however, EU and

Japan are currently benefiting the most from US-China
trade tension in the past year.

• The US-China trade war continuously escalates, which is

a great opportunity for Vietnam to raise exports to the US
TOPICAL REPORT in textiles, footwear, and toy manufacturing.

“Escalating trade war • Expectantly, FDI from Korea, China, Taiwan, and Hong
Kong will shortly accelerate even more strongly if the US
Great opportunity for textiles and China fail to reach an agreement by the end of June
2019. FDI from other partners such as Japan, Thailand,
and industrial zone and Singapore, etc. will likely increase, but mainly through
capital contribution and M&A, targeting Vietnam’s growing
real estate”
domestic market.

• However, Vietnam's trade surplus with the US increased

--- June 2019 --- so rapidly that President D.Trump's administration may
consider using measures to limit Vietnam's exports to the
US. Even so, in the short term, this risk is not large.

Analyst
Yen Tran
tranhaiyen@baoviet.com.vn

Research Department
Bao Viet Securities JSC

Hanoi Head Office

72 Tran Hung Dao, Hoan Kiem Dist., Hanoi
Tel: (84-4)-3928 8080
Fax: (84-4)-3928 9888
Email: research-bvsc@baoviet.com.vn
Website:www.bvsc.com.vn

Ho Chi Minh City Branch

No. 233 Dong Khoi, Dist I, HCM City
Tel: (84-8)-3914 6888
Fax: (84-8)-3914 7999

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I. Exports
1. Vietnam’s exports to the US grow 30%; however, EU and Japan are currently
partners benefiting the most from US-China trade tension in the past year.
The US-China trade conflict since the beginning in June 2018 has had certain impacts on Vietnam's
exports to the US. According to General Department of Customs, accumulated in the first 4 months
of 2019, Vietnam's exports to the US reached $17.8 billion, up 29.1%YoY compared to 11.5%
increase in the same period of 2018. Meanwhile, China's exports to the US in the same time frame
fell by 13%. Thus, in both reference frameworks (compared with Vietnam one year ago and
compared with China), it can be seen that Vietnam's exports to the US are achieving very positive
results.

• First, Vietnam's exports to the US still grow well despite the US economy showing signs
of slowing growth. With the US market share of 22.6%, the increase of 29% in US exports
alone has raised Vietnam's total exports by 6.7%. This raise is almost the entire increase of
exports in the last 4 months. This means that the US market is currently the most important
export market of Vietnam and without this market, Vietnam's exports could not grow in the first
4 months of the year.
• Secondly, despite a 30% growth, Vietnam's market share of total US imports only
increased by about 0.2% since the US-China trade conflict officially took place (06/2018).
At the same time, the market share of other ASEAN countries such as Thailand, Indonesia, and
Malaysia has generally remained unchanged or increased slightly by 0.1%.

Figure 1: Export market share in the US of Vietnam and other ASEAN countries

2.1% 20.0%

1.9% 18.0%

16.0%
1.7%
14.0%
1.5%
12.0%
1.3%
10.0%
1.1%
8.0%
0.9%
6.0%
0.7%
4.0%

0.5% 2.0%

0.3% 0.0%
05/01/18 06/01/18 07/01/18 08/01/18 09/01/18 10/01/18 11/01/18 12/01/18 01/01/19 02/01/19

Vietnam Thailand Malaysia China (RHS) Mexico (RHS)

Sources: Bloomberg, BVSC

Adversely, China’s market share has dropped from 16% to 12% in the past year. Meanwhile,
EU and Japan’s export market share to the US respectively went up from 10.5% to 12.5% and
4.5% to 5.5%.

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 Figure 2: Export market share in the US of China, EU, and Japan

20.00% 6.0%

18.00% 5.0%

16.00% 4.0%

14.00% 3.0%

12.00% 2.0%

10.00% 1.0%

8.00% 0.0%
05/01/18 06/01/18 07/01/18 08/01/18 09/01/18 10/01/18 11/01/18 12/01/18 01/01/19 02/01/19

EU China Japan (RHS) Korea (RHS)

Sources: Bloomberg, BVSC

These figures show that US taxes are clearly detrimental to Chinese exports. Accordingly, the most
benefiting countries are the US’s allies, such as EU and Japan. Emerging countries in
ASEAN, including Vietnam, also benefit but not much. We believe that these results can be
explained by 2 reasons:

• First, China's $250 billion goods taxed so far are mostly machinery and equipment (accounting
for 29%) and intermediate goods (47%). When these products are getting pricier due to taxes,
the US can easily replace import sources quickly from other partners, which is how EU, and
Japan, etc. have gained market share in the US in the past 1 year.

Figure 3: The structure of Chinese goods taxed by the US

Source: Bloomberg

• Second, consumer-made Chinese goods such as mobile phones, electronics, textiles, toys,
sports equipment, etc. have so far not been imposed the US. tax (refer to Table 1 below).
Therefore, US enterprises' need to replace import sources for these products to other countries
with similar production levels and prices as China (like ASEAN countries) is not really big.
Besides, shifting production supply chains requires more time for businesses to stimulate
investments, build factories, and recruit workers. However, this will completely change if the

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 US-China trade war escalates to the highest level with US taxes on all Chinese goods. If that’s
the case, the trend of shifting orders out of China will be much more pronounced.

2. The $250 billion tax package has so far brought advantages to exports of machinery
and electronic products. Textile, footwear, and fishery products have not benefited
much.

The product groups that Vietnam exports the most to the US are processing and manufacturing with
intensive labor demand and electronic components, machinery, and products. Of these, textiles
accounts for the largest share (25%); second place is telephones and accessories (18.6%); third is
footwear (11%). Next are wood and wood products (8%); other machinery, equipment, and tools
(7.3%); computers, electronic products, and components (7.2%); bags, suitcases, hats, and
umbrellas (2.8%); spare parts transport (2.7%); and fishery (2.2%), etc.

Figure 4: The structure of Vietnamese exports to the US 4M/2019

Textiles

Cell phones and accessories

15.5%
0.8% Footwear

Wooden products

Machines, Tools and accessories

Computers

Handbags, suitcases, wallets and umbrellas

18.6%
Transport vehicles

Fishery products
7.9%
11.2% Toys and sportwears

Others

Sources: General Department of Customs, BVSC

In the first 4 months of 2019, electronic products, machinery and spare parts that Vietnam
exported to the US saw a sudden increase compared to the total export value of this group
and also higher than its export value to other markets. Details as follows:
• Mobile phones and accessories exported to the US went up to 94.4% while its total export value
fell slightly by 0.4% compared to the same period in 2018. Contrary to the US market, export of
this group to EU (28 countries) decreased by 3.9% and by 65% to China;
• Computers, electronic products, and components exported to the US increased by 64%, far
exceeding the increase of 12% of its total export as well as growth in other markets such as
China (3.7% increase), EU (28 countries) (up 1.8%), and South Korea (up 6.6%);
• Other machinery and equipment and spare parts exported to the US increased by 54.7% while
export to EU increased by 18.7%, Japan by 4.9%, and South Korea by 17.9%. The increase of
total export value of this group is only 6.8%.

Meanwhile, the group of products in processing industry with intensive labor demand to the US
market in the first 4 months of 2019 has a lower increase than the electronics group, accompanied
by a wide divergence:
• Wood and wood products exported to the US increased by 34.7% while exports to Japan
increased by 18.2% and to China decreased slightly by 0.1%. The increase in total export value
of this group is 17.8%;
4

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 • Bags, purses, suitcases, hats, umbrellas exported to the US increased by 31.2% while the
overall export of the whole product group increased by 11.3% only;
• On the other hand, textile and apparel exports to the US increased only 9.1%, lower than the
total export growth of 10.2% of this group. However, the US is still the most important textile and
garment export market of Vietnam with the proportion of 47%.
• Similar to textiles and garments, footwear exports to the US increased only 13.5%, lower than
the total growth of 14.5% of the whole product group. The US is also the largest footwear export
market of Vietnam with the proportion of 37%.

Figure 5: Growth in exports of major commodity groups to the US 4M/2019

100.0% 94.4%

80.0%

60.0%

40.0%
24.5%

20.0% 11.5%

0.0%

-20.0%
Total Textiles Cell phones Footwear Wooden Machines, Computers Handbags, Transport Fishery
and products Tools and suitcases, vehicles products
accessories accessories wallets and
umbrellas

4T/2019 4T/2018

Sources: General Department of Customs, BVSC

Figure 6: Exports to the US market saw surpassed the total increase of various groups

100.0%

80.0%

60.0%

40.0%

20.0%

0.0%

-20.0%
Textiles Cell phones and Footwear Wooden products Machines, Tools and Computers and
accessories accessories accessories

Vietnam export to U.S Export to all markets

Sources: General Department of Customs, BVSC

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3. If the US-China trade war continues to escalate, Vietnam's textiles and footwear will
find tremendous opportunities to increase exports to the US.
Observably, one of the important reasons explaining the differentiation in the growth rate among the
groups of products that Vietnam exported to the US in the past months comes from the US’s plan
in imposing tariffs on goods from China. See Table 1 below:

• First, most of China's electronics and household electrical goods (except for mobile phones)
have been taxed by the US in the $250 billion package of goods. These groups have the most
significant growth rate in export from Vietnam to the US (see above). This is evidence that
Vietnam's export of these groups is benefiting greatly from US-China trade war.
• Secondly, Vietnam’s export of goods with labor-intensive demand, expectantly benefiting the
most from the moving of factories out of China to avoid taxes, including on textiles and garments,
footwear, toys, etc., in fact, has not seen any breakthrough growth. China’s goods of these
groups have yet to be included in the package taxed by the US. Therefore, the trend of
shifting orders and strongly raising Vietnam's exports to the US in these items is not clear.
• Thirdly, if the US and China do not reach a new trade agreement by the end of June and Trump’s
administration imposes the 25% tax on the remaining China's goods, Vietnam's opportunity to
raise export market share in the US market would be tremendous. Meanwhile, Vietnam's strong
manufacturing consumer goods, such as textiles and garments, leather shoes, toys, and sports
equipment, could find favorable conditions to gain market share from China if the tax is imposed.
The tax rate of 25% is pretty high for industries with average profit margin and labor intensive,
so the tendency of US importers to shift orders to other countries will be stronger. Even if the
US and China could reach an agreement that the tax on almost $250 billion is not imposed, the
US’s tax raise from 10 to 25% on $200 billion Chinese goods from May 10th, 2019 also opens
up opportunities for Vietnam to raise its export market share in the US.

With the increase in market share of Vietnamese goods (+0.2%) since the US officially introduced
tax on Chinese goods a year ago and the scale of Chinese goods package threatened by US
taxation, we estimate that if US-China trade war escalates to the highest level, Vietnam's export
market share in the US may increase about 1% from the current level, equivalent to about
$25 billion (about 10% of total export of Vietnam and 25% of Vietnam's export to the US in 2018).

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 Table 1: Trump administration’s schedule for taxing imports from China

Round 1 Round 2 Round 3

Since July 10th, 2018 applied to Threatened to apply 25%

Items Since June 15th, Total
USD 200 bil. The inital tax was to the rest of about USD
2018, apply 25%
10%, then increased to 25% since 250 biĺ if "no deal" at the
with USD 50 bil
mid May, 2019 end of June

Electronics thu

Cell phones 0 0 44.6 44.6

Television Equipment 0 22.9 thu 22.9

Television and monitors 0 0.1 11.4 11.5
Cameras 0.8 1.9 3.3 6
Electronic Heaters 0 1.2 4.1 5.3
Other Consumer electronics 1.6 7 8.6 17.2
Other electronics 14.7 15.7 9.2 39.6

Machinery
Computers 1.5 7.9 41.1 50.5
Printers 0.7 0.1 5.3 6.1
Air Conditioners 0 1.8 0.8 2.7
Refrigerator 0.5 1.6 2
Other Machinery 15.2 27 6.1 48.3

Manufactured goods
Chemicals 0 9.9 5.1 15.1
Plastic and rubber 2.2 9.8 7.9 19.8
Wood and paper products 0 6.7 3 9.7
Leather 0 7.4 0 7.4
Metal products 0.9 16 8.6 25.4

Furniture 0 29.2 2.7 31.9

Toys 0 0 thu 25.5 25.5

Textile Products
Clothes 0 0 35.2 35.2
Shoes 0 0 14.3 14.3
Other textile products 5.3 2.2 7.5

Food and agricultured products 0 6 1 7

Automobiles, bikes and parts 2.1 11.6 0.8 14.6

Optical and medical equipment 5 1.4 5.5 12

Total 45.2 190.5 246.3 482.1

Sources: Deutsche Bank, USITC, USTR, BVSC

4. Vietnam’s risks if trade surplus with the US increases

As analyzed above, the opportunity for Vietnam's exports to grow strongly into the US if the US-China
trade war escalates to the highest level is available. However, this opportunity also comes with certain
risks. When Vietnam's trade surplus with the US increases rapidly, President Trump's administration
will "keep an eye" on Vietnam’s export, considering using measures to limit Vietnam's exports to the
US. In 2018, Vietnam was one of the partners with US’s largest trade deficit (ranked 7th) with $36

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billion, after China ($383 billion), Mexico ($117 billion), Canada ($69.3 billion), Germany ($68.5
billion), Japan ($59 billion), and Ireland ($38 billion).

Figure 7: Top countries with US’s largest trade deficit in 2018

-50

-100

-150

-200

-250

-300

-350

-400

-450
China Mexico Canada Germany Japan Ireland Vietnam

Source: Bloomberg

Assuming that our forecast that Vietnam's exports to the US could increase by $25 billion over the
next 1 year (starting July 1, 2019) if the US imposes 25% of tax on all of China's imports is correct,
Vietnam's trade surplus with the US in 2019 could reach over $50 billion, thereby bringing
Vietnam to become the 6th country with largest trade deficit in the US.

In the med- and long-term, this move will likely force the US to impose measures as how it did to
other trading partners with a large trade surplus with the US such as removing Vietnam from the list
of generalized system of preferences (GSP) and placing Vietnam on the currency manipulation list.
The latest report of the US Department of Commerce in early June 2019 only added Vietnam to the
“watchlist” of currency manipulations but shortly Vietnam needs to be very careful in managing
exchange rates, avoiding too much intervention in the foreign exchange market to not be labeled as
currency manipulation. However, in the short term (in a year), with Trump administration’s
certain "connection" with Vietnam as well as Vietnam’s position as a suitable alternative of
imports for the US in case the US does not want to buy goods from China, the risk of Trump
administration’s targeting Vietnam's trade surplus right now is not too high.

In addition, another risk that Vietnam needs to be cautious about is that China exports goods to
Vietnam and "borrows" Vietnamese labels then exporting to the US to avoid taxes. A strong increase
in Vietnamese exports may force the US to conduct more origin checks. If the United States finds
goods from other countries only transiting through Vietnam, the US may impose sanctions on all
goods from Vietnam, causing damage to transparent business enterprises. Therefore, Vietnam needs
to tighten market management as well as issuing certificates of origin (C/O) to avoid this risk.

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II. Attracting FDI

1. Registered FDI increased sharply. Investors from China have the highest amount of
newly registered capital.
Foreign direct investment in the first 5 months of 2019 showed high growth in new and additional
registered capital. Specifically, the newly registered capital reached $6.45 billion, up by 26.7% in
number of projects and by 38.7% in capital over the same period in 2018. Additionally registered
capital reached $2.63 billion, increasing by 5.5%YoY. Thus, the total newly and additionally
registered capital in the first 5 months reached $9.08 billion, up 27.1%YoY – the highest
increase in the last 3 years. The large registered capital will bring opportunities for Vietnam's
realized FDI capital to accelerate more rapidly. We expect that realized FDI will increase by 13-
15% in 2019, reaching about $22 billion.

Figure 8: FDI into Vietnam increased considerably in the first 5 months of 2019

80.0%
300.0%
60.0%
200.0%
40.0%

20.0% 100.0%

0.0%
0.0%
-20.0%
-100.0%
-40.0%

-60.0% -200.0%

Registered FDI (LHS) Disbursed FDI (LHS)

Foreign Portfolio Investment (RHS)

Sources: GSO, BVSC

In terms of structure, newly registered and additional FDI inflows focus on processing and
manufacturing industries with $7 billion, accounting for 77.2% of the total registered capital. Real
estate business reached $752.1 million, accounting for 8.3%; the remaining sectors reached $1.3
billion, accounting for 14.5%.

Figure 9: Structure of newly registered FDI into Vietnam 5M/2019

Manufacturing

Real estates

Others

Sources: GSO, BVSC

9

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In the past 5 months, foreign investors have implemented 3,160 registrations of capital
contributions/shares purchase with a total capital contribution of $7.65 billion, 2.8 times higher
than the same period of 2018. Among these, notably, is a deal of transferring capital into equity
in Sabeco with total value of $3.85 billion. Beside that, the amount of foreign investors' capital
contribution in the last 5 months was $3.8 billion, relatively high (138%) compared to the same
period in 2018.

In the first 5 months of 2019, 7 projects was registered with total capital of $200 million:

• Beerco Limited (Hong Kong)’s registration of capital contribution/share purchase into Vietnam
Beverage Co., Ltd, with $3.85 billion capital contribution, aiming to produce beer and malt
brewing beer in Hanoi .
• Manufacturing ACTR all-steel tires Radian (China)’s $280 million registered capital in Tay Ninh
with the goal of producing all-steel TBR tires.
• Goertek (Hongkong) co., Limited’s project of manufacturing electronic equipment, network
equipment and multimedia products with $260 million registered investment capital in Bac Ninh.
• Thai investors’ $216.7 million investment capital in Hoa Hoi solar power plant project in Phu
Yen with the goal of producing solar electricity.
• Advance Tire Vietnam Co., Ltd’s total registered capital of $214.4 million by Guizhou Advance
Type Investment co., Ltd (China) with the goal of producing and consuming tires, rubber and
related products in Tien Giang.
• Royal Pagoda Private Limited (Singapore)’s $200 million registered investment capital in
Vinhtex with the goal of producing fabrics and dyeing knitting fabrics in Nghe An.
• Meiko Vietnam Electronic Co., Ltd. (Hong Kong) raising investment capital by $200 million with
the aim of designing, assembling and manufacturing electronic components in Hanoi.

Remarkably, 5 of these seven projects came from investors from China and Hong Kong, including
very remarkable electronics assembly projects, demonstrating the shift of production factories from
China, such as Goertek (maker of Apple iPhone headsets) and Meiko (specialized in manufacturing
electronic microchips). Besides, China has become No.1 investor (compare to No.4 in the same
period last year) with the largest registered FDI capital in Vietnam in the last 5 months. This partly
proves that Vietnam is actually benefiting from US-China trade tension in attracting investment
capital.

10

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 Figure 10: China has the largest newly registered FDI in Vietnam 5M/2019

Singapore
Korea
China
Japan
Hongkong
Taiwan

Sources: GSO, BVSC

2. FDI from Korea, China, Taiwan, and Hong Kong are expected to accelerate more
strongly.

In case the US and China do not reach any agreement in June 2019, we expect that the registered
FDI and disbursement into Vietnam will have faster and stronger growth. In fact, Vietnam has
benefited from the "China +1" strategy to diversify investor risks over the past 10 years. However,
the US-China trade war will help accelerate this process even more quickly and strongly.

Vietnam has various obvious advantages as an attractive alternative to China:

• Vietnam has a favorable strategic position: located in the center of ASEAN, with over 3,000
km of sea routes, connecting with China through the road system, facilitating enterprises in
large supply chains when transfering to Vietnam while maintaining a close connection with
key assembly hubs in China;
• Vietnam infrastructure is increasingly complete with highways and wharves. According to
ADB, Vietnam's spending on infrastructure reached about 6% of GDP in the last 5 years,
more than double that of ASEAN countries;
• Vietnam has preferential tax and land lease policies for foreign investors;
• Vietnam has a cheap and abundant labor force with a low minimum wage (60% of China
and lower than most ASEAN countries);

• Vietnam has been integrating deeply into international trade with various bilateral and
multilateral FTAs.

11

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 Figure 11: Relatively competitive salary in Vietnam

Myanmar
Laos
Cambodia
Vietnam
Malaysia
Indonesia
Thailand
Philippines
China

0 50 100 150 200 250 300 350

Sources: GSO, Economic Forum, BVSC

As US-China trade conflict will possibly escalate to the highest level, BVSC believes that FDI growth
will mainly come from South Korea, China, Taiwan, and Hong Kong.
• South Korea’s “south” strategy and large investment commitments of electronics
enterprises such as Samsung (accumulated investment capital has now reached $18
billion) and LG, etc. indicated that Vietnam is still an attractive destination to Korean
investors. The Vietnam-Korea free trade agreement (VKFTA), which came into effect
since late 2015, has created more favorable conditions for trade between the two
countries. Vietnam currently accounts for about 50% of Samsung's total mobile phones
produced globally. In addition, Samsung has been promoting the expansion of telephone
assembly in India (currently has a capacity of 60 million units per year and can increase
to 120 million units per year). Therefore, we do not expect that Samsung will open a new
phone assembly factory in Vietnam in the short term. However, if Samsung and LG’s
satellite companies in their supply chain plan to increase production in Vietnam, FDI
capital flows into Vietnam still has many opportunities to increase in the future.
In addition, for other consumer electronics segments such as TVs, refrigerators, and air
conditioners (segments possibly subject to tax that the US plans to impose on Chinese
goods - see Table 1), etc. Samsung and other Korean electronics companies in general
may establish new factories or expand capacity in Vietnam to take advantage of
opportunities from US-China trade conflicts.
• With China and Taiwan, we expect that enterprises in labor-intensive manufacturing
sector, such as textiles, footwear, toys production, etc. will speed up FDI investment in
Vietnam. In the next round of imposing taxation, the US is threatening to focus on these
items with high tariffs (25%), which will create a lot of motivation for the wave of shifting
factories from China to neighboring countries, including Vietnam.

With the supply chain related to iPhone products being assembled in China (also possibly
subject to 25% tax imposed by the US), some of the suppliers of this production chain can
establish new factories in Vietnam. In the first 5 months of this year, GoerTek
project(producing wireless headphones for Apple) worth $260 million registered to invest
in Bac Ninh. In the future, we expect that some other businesses in Apple's supply chain
such as AAC Techonology (motors), Lux share (speakers and connected devices), FIT
(Cable output), and Largan (lens), etc. will move to Vietnam. In Foxcoon’s possible shifting
of its assembly line out of China, Vietnam would have to compete with India - a country
ambitious to establish a large global mobile phone production base with the strategy
"Make in India" and its domestic market of over 1 billion people.
12

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 • With other partners such as Japan, Thailand, and Singapore, etc., we also expect
FDI inflows to increase but will be mainly through capital contribution and share purchase
with M&A deals without establishing new the factories. These capital flows will largely
target Vietnam's growing domestic market rather than merely taking advantage of
opportunities from US-China trade conflicts.

III. Our views

In summary, the US-China trade conflict in the past 1 year and the possibility of continuously
escalating after June 2019 is creating many opportunities for Vietnam, most evidently through
export to the US and FDI attraction in the first months of 2019. Below are some highlights:

1. Vietnam's exports are showing benefits from US-China trade conflicts. Vietnam's exports to
the US increased by 30% in the first 4 months of 2019. The export of electronic products and
machinery and spare parts to the US saw a sudden increase compared to the growth of the
total export turnover of that group globally as well as other markets. Processing and labor-
intensive industries have a lower increase than electronics group, with a wide divergence.
2. Based on the increase in market share of Vietnamese goods (+0.2%) since the US officially
introduced tax on Chinese goods a year ago and the scale of the next Chinese goods
package is threatened to be taxed by the US, we estimate that if the US-China trade war
escalates to the highest level, Vietnam's export market share in the US may increase by
about 1% from the current level, equivalent to about $25 billion (about 10% of Vietnam's total
export and 25% of Vietnam's export to the US in 2018).
3. The opportunity for Vietnam's exports to grow strongly into the US if the US-China trade war
escalates to the highest level is available. However, this opportunity also comes with certain
risks. One of the biggest risks is that Vietnam's trade surplus with the US will increase so
rapidly that President Trump's administration will "keep an eye" on Vietnam’s export,
considering using measures to limit Vietnam's exports to the US..
4. US-China trade conflict is also bringing opportunities to attract FDI capital to Vietnam in the
trend of shifting factories out of China to avoid taxes. Newly and additionally registered FDI
increased by 27% in the first 5 months. The increase in registered capital will provide
opportunities for FDI capital to accelerate faster. We expect realized FDI will increase by 13-
15% in 2019, reaching about $22 billion.

5. Growth of FDI capital is expected to come mainly from partners: Korea, China, Taiwan, and
Hong Kong. FDI from other partners such as Japan, Thailand, and Singapore, etc. will
possibly increase, but mainly through capital contribution and share purchase with M&A
deals, mostly targeting Vietnam’s strongly growing domestic market.

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