The number of foreign trade representative visits to Vietnam during the first half of the year are an auspicious sign US investment in the country is not about to wane anytime soon, economic experts say.
Paving way for small US businesses
Early this year, the US-ASEAN Business Council organised a fact-finding tour of Vietnam for nearly 80 managers from 33 of the US leading international companies.
A month later, the Trade Development Alliance of Greater Seattle sent more than 20 foreign trade representatives from international giants like Microsoft, Boeing, Virginia Manson Medical Centre, Global Reach K.K, Washington University, on fact finding tours to Vietnam.
In early June, a US business delegation led by US Secretary of Commerce Penny Pritzker visited Vietnam. Secretary Pritzker was clearly on a mission to convey the message that Vietnam is an important trade partner of the US.
Pritzker explicitly said many US firms are interested in starting new businesses or expanding their current operations in the country.
Ministry of Planning and Investment (MoIP)’s Foreign Investment Agency Director Do Nhat Hoang spoke about a renewed investment inflow into the nation coming from US international companies.
Hoang specifically cited Exxon Mobil’s US$20 billion electric-gas project and Good Choice’s US$1.29 billion hotel and entertainment resort complex in Ba Ria-Vung Tau province as two significant examples of the renewed influx of US investment.
Intel Vietnam also recently revealed that the US Intel group is closing down its assembly operations in Costa Rica and relocating it to Vietnam in the upcoming year.
Robert Tran, Director General in charge of the US and Asia-Pacific markets of Canadian Consultancy Group Robenny, says most US major economic groups have come to Vietnam. Within a year of setting up representative offices in Vietnam, Walmart has exported thousands of containers of Vietnamese goods. The second largest group – JCPenney – has operated silently in Vietnam for several years with good results.
US giants’ investment to Vietnam in recent years have paved the way for their small-and medium-sized enterprises (SMEs) counterparts to fully exploit advantages brought about by the Trans-Pacific Partnership (TPP) when it officially comes into effect next year.
Robert Tran says large-scale cooperative projects in energy, aviation and heavy industry are also bullish on the Vietnamese market, making inroads investing in agriculture, tourism, education and finance.
“Flowing” through private funds
Nguyen Nam Son, Managing Director of Vietnam Capital Partners, says SMEs from the US often invest through private investment funds.
For example, Kohlberg Kravis Roberts (KKR), a leading global investment firm, has poured more than US$5.2 billion into the Asia-Pacific region, including nearly US$360 million into Masan Group in Vietnam, principally targeting consumption and retail business investments.
Texas Pacific Group (TPG) has pumped its investment capital into Vietnamese agricultural business and owned 40% of shares of Cam Con Co (Stork Mash) brand name.
Many companies eyed the Vietnamese market 5-6 years ago but they had to halt their investment due to global economic downturn. The increasing number of visits to Vietnam demonstrates that they are preparing to return to the country, Son says.
To take full advantage and attract investment, localities must have a clear strategy, said Robert Tran. For example, Ho Chi Minh City will concentrate specifically on high-tech, finance, and education, Tran says.
The US is among the top ten foreign investors in Vietnam. Over the past 20 years, US firms have pumped more than US$11 billion into nearly 700 projects and the trend shows no signs of diminishing.
US companies are queuing up to invest in the nation in everything from infrastructure and thermal electricity to agriculture and organising a non-stop series of visits to Vietnam to seek the tremendous opportunities it offers.