Thailand: Long-term Investors in Vietnam Market

Thailand is one of the few investors involving in a lot of industries in Vietnam, they set up business in Vietnam for years and this trend has not shown signs of decline.

Thailand was one of the first foreign investors came to Vietnam in 1992. To date, Thai investors have committed to invest in Vietnam 468 projects with a total registered capital of 8 billion USD, ranked 10th among countries and territories investing in Vietnam. Thai investors have poured capital into many sectors of Vietnam’s economy, from processing industry to agriculture, wholesale and retail…

After more than 25 years of presence in Vietnam, Thais have quietly acquired BigC, Metro, Nguyen Kim, Vinamilk, Prime… The chain of wholesale and retail stores of Thai people has spread throughout Vietnam. Not many foreign investors in Vietnam can do that.

With a large investment scale, it can be said that Thailand is the leading investment partner of Vietnam. Meanwhile, in ASEAN, Thailand is Vietnam’s largest trading partner, while Vietnam is Thailand’s second largest export partner, with total bilateral trade in 2016 reached 12.5 billion USD. Of which, Vietnam exports to Thailand reached 3.7 billion USD. In the first half of 2017, total two-way trade turnover reached nearly 7 billion USD, increase by over 22% over the same period last year. The two sides set a target to bring two-way trade turnover to 20 billion USD by 2020.

However, Vietnam and Thailand are also direct “competitors” in both competition to attract foreign investment and export goods. There are a lot of Thai exports that are similar to Vietnam’s exports, in which rice is one of the typical items.

In terms of investment attraction, Thailand has long been a leading investment destination in the region and Vietnam is competing directly with this market. In recent years, many Korean and Japanese investors, including LG, have decided to move production sites from Thailand to Vietnam. According to a report released by PwC, Vietnam has surpassed both Thailand and Malaysia in terms of new FDI inflows. Even PwC says that overtaking Thailand and Malaysia, Vietnam is at a “booming point” in the development process, thanks to a series of trade agreements being signed and an increasingly transparent and open business environment.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

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Mavin Pledged to Invest 80 Million USD in Nghe An

Mavin Group (Australia) has operated in Vietnam for a long time and now they do not hide their ambition to expand investment and set up business in Vietnam.

In February 2017, Mavin Group inaugurated an animal feed production factory in Vietnam. This plant has a total investment of 15 million USD, which is built on an area of 3.6 ha and has a capacity of 300,000 tons per year.

Mavin Group has invested in Vietnam for more than 12 years and now has production facilities in 7 provinces and branches, warehouses in 19 different provinces in the country. However, up to date, Nghe An is the only province that Mavin plans to invest in 4 separate projects with a total investment of 80 million USD.

In addition to the inaugural animal feed factory, Mavin Group plans to deploy 3 more projects in Nghe An.

In April 2017, Mavin Group was granted a license to invest in a 18 million USD hi-tech pig farm, built on an area of ​​100 hectares. Subsequently, the Mavin Group plans to invest in a Veterinary Research Center. At the same time, conducting a feasibility study to invest in a food processing plant that may be launched by 2018. The project has a total investment of 25 million USD, built on an area of ​​5 hectares, capacity of 200,000 tons/year. This factory will produce products made from meat, sausage, ham and other traditional meats… serving the domestic market and exporting to Laos and Cambodia.

According to the Chairman of the group, Mavin Group before making investment decision always consider 6 issues that are: human resources; market; geographic factors; political issues (attention, government support, security…); incentive policy and transparency.

In addition, representatives of the Mavin Group expressed their satisfaction when investing in Nghe An. Moreover, they also suggested that investors should choose to invest in Nghe An not only because of favorable geographic location, synchronous facilities, great source of human resources but also highly supported from province leaders with great investment incentives.

According to the representative of Vietnam – Singapore Industrial Park (VSIP) in the Central and South regions, recently many local and foreign investors have come to Nghe An seeking investment opportunities.

Previously, in September 2015, VSIP Nghe An was officially started construction with a total area of 750 hectares. After more than a year of land handover, up to now, VSIP Nghe An has now leveled and built complete infrastructure for about 100 hectares of industrial land area in phase 1A. The wastewater treatment system, clean water supply, power supply, fire prevention and protection have been completed and ready to serve investors in production.

More than 90 companies from many countries and territories have come to find out information and investment opportunities at VSIP Nghe An and 10 companies have signed investment commitments with total investment capital of over 400 billion VND. By the beginning of September 2017, some companies have received land handover and started plant construction. In which, the first factory was officially put into operation. It is expected that by the fourth quarter of 2017, two more companies will come into operation, attracting about 1,000 workers.

It is known that VSIP Nghe An is the 7th project that VSIP deployed in Vietnam. Previously, in addition to 2 VSIP projects in Binh Duong, there are projects in Bac Ninh, Hai Phong, Quang Ngai and Hai Duong. Currently, VSIP’s projects attract a total of 720 investors from 30 countries and territories with total domestic and foreign investment of 9.2 billion USD, creating jobs for about 180,000 workers.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

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AES (USA) Wants to Invest in Son My 2 Thermal Power Plant

AES Energy Company (USA) wants to invest and deploy the project of Son My 2 Gas Hydropower Plant and LNG Port Warehouse in Son My commune, Ham Tan district, Binh Thuan province together with PV Gas Corporation Vietnam (PV Gas).

At the working session with Vietnam Oil and Gas Group (PVN), Mr David Stone – General Director in charge of Vietnam market of AES Energy Company (USA) expressed the wish to be supported by PVN to invest and deploy the project of Son My 2 Gas Hydropower Plant and LNG Port Warehouse in Son My commune, Ham Tan district, Binh Thuan province together with PV Gas Corporation Vietnam (PV Gas).

PVN’s Deputy General Director affirmed that PVN is supportive and willing to cooperate with such American investors as AES in the field of oil and gas, especially gas thermal power and port warehouses projects that PVN is calling for investment. PVN also requested AES to work closely with PV Gas and report the results to PVN as soon as possible.

The Son My 2 Gas Hydropower Plant project is one of the 9 gas thermal power projects assigned by the Government to PVN as the investor and the power project under the revised Power Development Master Plan VII.

This project is expected to include 3 Son My plants, which are Son My 2.1, Son My 2.2 and Son My 2.3 with an expected capacity of 750 MW per plant, using imported LNG for power generation and will be located at the Son My Oil, Gas, Industry and Service Complex.

According to the plan, 3 plants under the Son My 2 gas power plant project will be operated in 2023, 2024 and 2025 respectively.

AES operates in the US electricity sector and is on the list of 200 global energy companies, ranked by Fortune Magazine.

AES operates mainly in the field of thermal power and renewable energy production in 17 countries around the world. The power plants of AES are diversified in power sources including coal-fired thermal power, gas-fired thermal power, thermal gas power, hydro-electric power, wind power and biomass power.

AES now owns an LNG plant in the Dominican Republic with the port that can unload 10,000 m3/h and a 160,000 m3 LNG storage tanks. Moreover, AES is the owner of the LNG project with a 170,000 m3 depot in Panama and has participated in the BOT Mong Duong 2 power plant project.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

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Attracting FDI: New Regulations, New Face

The strategy to attract foreign direct investment (FDI) in Vietnam from now to 2030 with many new points is attracting special attention of investors.

The perspectives of the Ministry of Planning and Investment in developing a strategy to attract FDI capital for the coming period are to selectively attract and focus to increase the efficiency of FDI’s contribution to economic growth in the context of deeper international integration with the implementation of a series of new free trade agreements.

Accordingly, the orientation to attract FDI in the coming period is to prioritize capital flows into high-tech, new and environmentally-friendly industries such as information technology, electronics, telecommunications, automobiles and agricultural machines, construction equipment, industrial equipment, electrical equipment, supporting industry, internet of things (IoT)…

Other priority areas include: processing and manufacturing industries for agriculture to meet international standards, high-tech agriculture, high-value agriculture, medical equipment, health care, education and training, high quality tourism, financial services, logistics and other modern services; developing technical infrastructure, clean energy, renewable energy, smart energy.

At the same time, Vietnam will continue to attract FDI into industries with advantages such as textiles and garments, leather and footwear…, but priority is given to high value-added stages, associated with smart production processes, automation.

Vietnam aims to attract high quality and more efficient use of FDI to access new technologies, increase connections between domestic and foreign enterprises, increase participation in global value chains, contributing to increase the country’s competitiveness and promoting economic restructuring according to the change of growth model.

Vietnam also aims to increase the contribution of the FDI sector to 20 – 25% of the total investment capital of the economy, reducing the energy consumption of FDI enterprises below the national average while increasing the contribution of this sector in GDP growth in the coming period.

The often-changing legal framework is the concern of investors. Law enforcement should be improved to reduce difficulties for businesses when the new law takes effect. Many foreign investors leave China because of this reason and this trend will continue. How attractive Vietnam is depending on the future policies of the Government and enforcement agencies.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

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FDI Disbursement 2018 Continues to Reach Record

The data has recently been published by the Foreign Investment Agency (Ministry of Planning and Investment) showed that FDI disbursement continued to achieve an impressive growth of 9.1% to set a new record with disbursed capital of 19.1 billion USD.

Three consecutive years of setting new record of disbursing foreign direct investment (FDI) has affirmed that Vietnam continues to be an attractive investment destination.

Only in the last 3 years, the amount of disbursed foreign investment has reached more than 50 billion USD (17.5 billion USD – 2017; 15.8 billion USD – 2016). This is an important additional source of capital for development investment in Vietnam, contributing to changing the economic face, creating growth, employment, and income for workers.

Meanwhile, regarding the registered capital, according to the data of the Foreign Investment Department, as of December 20th 2018, the total foreign investment capital into Vietnam, including newly registered capital, increased and contributing capital to buy shares of foreign investors is 35.46 billion USD, equaling 98.8% compared to the same period in 2017.

In which, there are 3,046 new projects were granted investment registration certificates with total new registered capital of nearly 18 billion USD, equaling 84.5% compared to the same period in 2017.

Besides, there are 1,169 projects registered to adjust investment capital with total registered capital increased of 7.59 billion USD, equaling 90.3% compared to the same period in 2017. And 6,496 times of capital contribution and share purchase of foreign investors with total capital contribution of 9.89 billion USD, increase by 59.8% compared to the same period in 2017.

According to data recently shown by the Foreign Investment Agency, in 2018 there were 112 countries and territories with investment projects in Vietnam. Japan has held the first position in the two consecutive years with a total investment of USD 8.59 billion, accounting for 24.2% of the total investment capital. Korea ranked second with total registered capital of 7.2 billion USD, accounting for 20.3% of total investment capital in Vietnam. Singapore ranked third with a total registered investment capital of 5 billion USD, accounting for 14.2% of total investment capital…

The processing and manufacturing industry is still the field attracting the attention of foreign investors with a total capital of 16.58 billion USD, accounting for 46.7% of the total registered investment capital. Real estate business ranks second with total investment of 6.6 billion USD, accounting for 18.6% of the total registered investment capital. The third is the wholesale and retail sector with the total registered investment capital of 3.67 billion USD, accounting for 10.3% of the total registered investment capital…

In terms of project scale, if in 2017, the attention is paid to 3 BOT thermal power projects, in 2018, large projects belong to real estate and manufacturing industries.

It is possible to mention the Smart City project in Hai Boi, Vinh Ngoc, Dong Anh Hanoi, with a total investment of 4.138 billion USD invested by Sumitomo Corporation (Japan) with the goal of building a smart urban area with synchronous technical infrastructure and social infrastructure… ; Laguna (Vietnam) Co., Ltd project, invested by Singaporean investor in Thua Thien Hue has adjusted to increase investment capital by 1.12 billion USD on May 25th 2018; Lotte Mall project in Hanoi; LG Innitek Hai Phong factory project (Korea), adjusted to increase investment capital of 501 million USD on February 23rd 2018; LG Display Hai Phong project (Korea), adjusted to increase investment capital of 500 million USD…

In addition, there are a number of projects in other areas such as the polypropylene (PP) manufacturing factory and liquefied petroleum gas (LPG) underground storage project in Vietnam, with a total registered capital of 1.201 billion USD, invested by HYOSUNG CORPORATION (Korea) in Ba Ria – Vung Tau…

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

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Passing Thailand, Singapore, Vietnam Leads the Region in The PMI Index

Vietnam’s Purchasing Managers’ Index (PMI) has risen from 51.8 in August to 53.3 in September. Nikkei evaluated that the business conditions of the month had a strong improvement, achieving the best speed since April. Accordingly, the health of this field is positive during the past 22 months.

Ranking the countries according to the PMI index of the month, Vietnam continued to lead the overall growth list with the PMI index rising to a high in September. The Philippines advanced to the second position with 50.8 points, although overall growth is still light.

Indonesia with 50.4 points indicates that business conditions continue to be improved while Thailand has rebounded to 50.3 points after a decline in the previous two months. After the improvement last month, Malaysia (49.9 points) recorded almost unchanged production conditions in September. Meanwhile Singapore (48.6 points) fell into the decline. Myanmar (49.4 points) continue to have weak business conditions, although the speed of decline is light.

Analyzing the reasons for growth in Vietnam, according to the Nikkei, customer demand increased and new orders increase as a result. This is the most significant increase in 5 months. Order growth rate also improved sharply in September.

Thanks for that, inventories also fell for the third month in a row, the biggest drop since July.

Production output of Vietnam has also increased in 11 consecutive months. All three areas of the market have increased production, led by companies producing consumer goods.

In terms of input costs, Nikkei noted that due to rising raw material prices, including raw materials from China, input costs rise significantly, the strongest since May 2011. Therefore, in September 2017, for the first time in 5 months, companies must increase output prices.

According to Mr Andrew Harker from IHS Markit, the company that collected the survey results evaluated that the third quarter ended with a positive note for Vietnamese producers. As a result, manufacturers may continue to grow in the last quarter. Nevertheless, he noted that Vietnam should be cautious as inflationary pressures reappeared.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

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