Tuesday, December 5, 2023
Tuesday, December 5, 2023
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Numerous Foreign Corporations Land in Vietnam

by Sang Achariya
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Lately, numerous major foreign corporations have been actively seeking investment and collaboration opportunities in Vietnam, such as Boeing, Walmart, and Central Retail.

From the start of September to now, nearly 1,000 enterprises from 28 different countries and territories have visited Vietnam to explore potential investment prospects.

Unlimited demand for goods

Avaneesh Gupta, Senior Vice President, General Merchandise & Apparel Sourcing for Walmart, highlighted that Vietnam currently ranks in the top five countries for wood and agricultural product exports and holds the 10th position globally for textile, leather, and footwear exports. Notably, Vietnamese products are increasingly gaining popularity among consumers worldwide.

“As part of our 2024 supplemental sourcing strategy for the Walmart network, we have deployed our procurement team to Vietnam to collaborate with numerous manufacturers and explore sourcing opportunities within the country. Our sought-after product categories encompass seafood, cashews, soy milk, coffee, fresh fruits, and fruit-based snacks,” remarked Avaneesh Gupta.

In early September, Mr. Lionel Adenot, Director of Decathlon Vietnam Group, was present in Ho Chi Minh City and mentioned that the company is expanding its textile product supply with unlimited production capacity. However, for Vietnamese businesses to become suppliers to the company, they must meet specific conditions. These conditions include ensuring that factories do not use coal and have a plan to eliminate the use of fossil fuels by 2025, achieving self-sufficiency in raw material supply, favoring environmentally friendly, on-site material usage, and implementing digital transformation in their production processes. In addition, Decathlon Vietnam Group will give priority to businesses that fulfill criteria related to labor and community responsibility.

Moreover, agriculture represents an enticing sector for foreign investors. To illustrate, the Central Retail Group has offered technical guidance and methodologies for cultivating organic honeydew melons to Danny Green Agriculture Company. In the immediate future, Danny Green Agriculture Company has successfully established and currently manages a 120-hectare organic honeydew melon farm in Binh Thuan Province. This guarantees a consistent supply of organic honeydew melons, not only catering to domestic distribution in Vietnam but also enabling proactive exports to markets in Japan, South Korea, and Singapore.

According to experts, there’s a notable shift from the past, where foreign corporations primarily looked for existing sources of supply in Vietnam. Nowadays, they are willing to collaborate with Vietnamese businesses to standardize cultivation and production processes, ultimately boosting the capacity of their supply partners. This endeavor, in turn, ensures a steady flow of goods within the supply chain.

To ensure positive year-on-year growth in the production of Vietnamese goods within the supply chain, numerous foreign corporations collaborate with domestic businesses to create and publish a handbook of product quality standards. They also enlist experts to assist Vietnamese companies in refining everything from product quality to packaging to align with global customer preferences.

Abundant opportunities for direct investment

Besides their quest for reliable supply sources, numerous businesses from South Korea, the US, and Europe are keen on direct investments in Vietnam. Mr. Jean Jacques Bouflet, Vice Chairman of EuroCham, emphasized that Vietnam is emerging as a significant destination within the global supply chain, attributed to its strategically advantageous geographical location, stable economy, youthful workforce, and well-founded policies. Since the signing of the EU-Vietnam Free Trade Agreement (EVFTA) in 2019, there have been 2,250 projects, amounting to a total investment of $26 billion by European enterprises in Vietnam.

Furthermore, the race for investment in Vietnam has attracted numerous leading American corporations such as Apple, Qualcomm, Nike, Morgan Stanley, Intel, GE, ACORN International, General Dynamics, and Google. Recently, Boeing Group also visited Ho Chi Minh City to explore opportunities for expanding investments in material supply facilities and establishing technical centers.

Mr. Maxime Dourdan, Director of Supply Chain Development for Boeing in the Southeast Asia, Japan, and South Korea region, noted that, at present, Boeing’s tier 1 suppliers are primarily businesses in Japan and South Korea. Compared to these two countries, Vietnam has a significant cost advantage in manufacturing. Additionally, the manufacturing capabilities of Vietnamese enterprises in supporting industry products have greatly improved in recent years.

Evidence of this is the presence of many Vietnamese companies in the global supply chains of major corporations like Samsung, Sanyo, and Intel. It will be a foundation for Boeing Group to consider collaboration and further investment in expanding its supply chain in Vietnam, he added.

According to data from the Ministry of Planning and Investment, the total foreign direct investment (FDI) in Vietnam during the first eight months of this year reached $18.15 billion, an 8.2 percent increase compared to the same period last year. This underscores the significant appreciation of the investment potential and appeal of Vietnam’s investment environment by foreign investors.

Nonetheless, in order to attract more robust and enduring investments, Mr. Hong Sun, Chairman of the Korean Chamber of Commerce and Industry in Vietnam, proposes the need for consistency in investment incentives policies to ensure that investors can confidently engage in long-term business ventures.

Mr. Nguyen Tien Truong, Vice Chairman of the Vietnam Textile and Apparel Association, recommends, “at the macroeconomic level, the government should strive for a balanced approach to interest rates, exchange rates, and capital accessibility that benefits businesses. This also presents an opportunity for domestic enterprises to swiftly embark on green and digital transformations in their production processes, enabling them to collaborate with foreign direct investors, who are pouring investments heavily in Vietnam.”

Source: Vietnam Net

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