Germany, Vietnam eye circular economy to deepen manufacturing supply chain ties

The circular economy, sustainable manufacturing, and industrial competitiveness were central themes at the Germany-Vietnam Business Forum 2026, held in Ho Chi Minh City on June 11.

In her opening remarks, Andrea Sühl, German consul general in Ho Chi Minh City, emphasized the growing importance of bilateral cooperation in fostering innovation, technology transfer, and sustainable production. "Vietnam is entering a new stage of development characterised by stronger economic growth and an increasingly important role in global manufacturing supply chains. Germany remains a long-standing partner of Vietnam, sharing a common commitment to sustainable development and long-term growth,” Sühl said. She reaffirmed Germany’s pledge to support Vietnam’s green transition through technology, industrial expertise, and long-term business partnerships.

Alexander Ziehe, chairman of the German Business Association in Vietnam, observed that Ho Chi Minh City is well-positioned to adopt circular economy principles in its next industrial development phase. “Building sustainable supply chains, strengthening the capabilities of domestic suppliers, and accelerating technology transfer will enable Vietnamese enterprises to participate more deeply in global value chains,” Ziehe stated. He added that German companies are prepared to assist Vietnam not only as investors but also as long-term partners in industrial development and sustainable growth.

For German businesses in Vietnam, the circular economy is no longer just a sustainability goal but a core component of competitiveness and market access, noted Peter Kompalla, chief representative of AHK Vietnam. “New requirements relating to supply chain transparency, traceability, and digital product passports are increasingly becoming prerequisites for accessing international markets, particularly the European Union,” Kompalla said. He argued that firms embracing circular principles will be better equipped to meet evolving regulations and enhance their global competitiveness.

A key topic was how Vietnamese firms can increase their role in global supply chains as environmental, social, and governance (ESG) standards become mandatory. Nguyen Trong Luat, vice chairman of the Ho Chi Minh City Association of Supporting Industries, said businesses face pressure to improve technology and comply with new rules on carbon emissions and transparency. “In this context, the biggest gap for many Vietnamese enterprises lies in management capacity, technical human resources, and their ability to connect with overseas funding,” Luat explained. He stressed that “technology transfer, skills development, and the establishment of stronger supplier linkage mechanisms will be critical to helping domestic companies upgrade their competitiveness.”

Erick Contreras, managing director of BASF Vietnam, described the circular economy as an emerging growth driver for manufacturing. “As companies face increasing pressure related to raw materials, energy consumption, emissions, and compliance with international standards, circular business models can transform these challenges into opportunities to improve resource efficiency, foster innovation, and create new sources of value,” Contreras said.

Beyond the circular economy, digital transformation and automation were also identified as critical enablers for sustainable manufacturing, helping businesses improve productivity, optimize resource use, and build more resilient and environmentally sound operations.