A delegation of 25 member companies of the Automotive Component Manufacturers Association of India (ACMA) is paying a business trip to Vietnam to explore the country’s investment and business opportunities. ACMA is a large association, with 800 members, making auto parts and components and contributing more than 85% of the revenue of the Indian auto industry. 

Mr. Yuvraj Kapuria, President of YBLF (a member of ACMA), said that ACMA wants to cooperate with businesses in the Vietnamese automobile industry to jointly explore new markets. “We accept all forms of cooperation,” said Mr. Yuvraj Kapuria.

Over a week ago, Mr. Yerkin Tatishhev, founder and chairman of Kusto Group, also visited Vietnam after a three-year hiatus due to the Covid-19 pandemic. After a 10-day trip with many meetings with Vietnamese officials and businesspeople, Mr. Yerkin Tatishhev plans to expand investment in Vietnam, after having invested more than $1 billion in 10 projects in Vietnam in the past 15 years. Kusto Group’s two fields of interest are social housing and infrastructure projects.

“I am very excited about the 1 million social housing program that the Vietnamese government is implementing,” said Yerkin Tatishhev, who has not hidden his ambition to be a part of this plan.

Kusto Group might invest up to hundreds of millions of USD in Vietnam in the near future if projects meet the Group's criteria and business philosophy. 

The southern province of Binh Duong was among the places where Mr. Yerkin Tatishhev went to look for investment opportunities. A few days ago, Mr. Robert Wu, Chairman and CEO of Sharp Corporation (Japan), also paid a visit to Binh Duong.

“We will continue to expand production and business facilities here. Vietnam's economy is expected to accelerate its recovery and develop further after the pandemic. The Vietnamese government is also giving many incentives to foreign businesses. This is motivation for us to continue to contribute to the development of Vietnam,” said Mr. Robert Wu.

A Korean corporation - SK Group - has even bigger ambitions in the Vietnamese market. 

During an online exchange with Minister of Planning and Investment Nguyen Chi Dung and Minister of Industry and Trade Nguyen Hong Dien in mid-August, Mr. Chey Tae-won, Chairman of SK Group, said the delegation is considering the conditions to invest in hydrogen projects in the Mekong Delta and high-tech projects using clean energy in Vietnam.

As the second largest corporation in South Korea, SK Group has inked many large investment deals in Vietnam, including pouring $470 million to buy 9.4% stake in Masan Group, $1 billion to get 6% stake in Vingroup and $340 million invested in TheCrownX. According to some sources, it is most likely that SK will also pour capital into the Pharmacity drugstore system in Vietnam.

SK Group has also given great support to the construction of the National Innovation Center (NIC) and has made long-term commitments to the Vietnamese Government. In a dialogue with Mr. Chey Tae-won, Minister Nguyen Chi Dung expressed his wish that SK would consider Vietnam as a global strategic destination and continue to expand investment projects. 

Opportunity to welcome FDI wave

The fact that foreign investors are flocking to Vietnam recently shows that Vietnam has the opportunity to "catch the wave" of FDI.

Mr. Nguyen Anh Tuan, Deputy Director of the Department of Foreign Investment under the Ministry of Planning and Investment, told a recent forum on FDI that Vietnam is facing "many opportunities" for a new wave of investment.

During his recent visit to Vietnam, Mr. Roh Tae-Moon, General Director of Samsung Electronics Group (Korea), said that Samsung will continue to invest an additional $3.3 billion in Vietnam this year. Of this, more than $2 billion has been committed to invest in Samsung Electro-Mechanics Vietnam project in Thai Nguyen and Samsung Complex HCMC - SEHC. The rest will be announced in the last months of the year.

Meanwhile, it is reported that Foxconn is planning to invest another $300 million in Bac Giang Province to produce Apple Watch and MacBook in Vietnam, after making an investment commitment worth $270 million early last year.

In addition to Foxconn, other big names, such as Luxshare, Goertek... , have expanded their investment in Vietnam in recent years. That means there will be more components and more Apple products manufactured in Vietnam.

The Foreign Investment Department of Vietnam highly appreciates this trend. Mr. Tuan pointed out why Vietnam has an opportunity to receive a new FDI wave: Vietnam's good control of the Covid-19 epidemic; its advantages in terms of human resources and domestic market; and the determination in improving the investment and business environment of local and central governments.

Recently, Vietnam's determination to invest heavily in the infrastructure system, especially large-scale projects in the field of transport, is also said to be a huge plus.

However, how far Vietnam can take this opportunity is another matter. Minister Nguyen Chi Dung has repeatedly emphasized that investment capital does not come by accident but depends greatly on the policy response, and on the readiness of Vietnam, including land, resources, human resources, infrastructure... He has also shared concerns about the risk that Vietnam may fail to take advantage of the opportunities of investment capital mobility.

There is still a lot of work that Vietnam must do to "catch up" in terms of FDI.

Dau Tu