Local firms attack foreign markets

01/08/2009

VietNamNet Bridge - Vietnamese companies are taking advantage of the global economic recession to expand outbound investments in developed countries to strengthen their international market positions.

Figures from the Ministry of Planning and Investment’s (MPI) Foreign Investment Agency (FIA) show that domestic companies registered to invest about $1.5 billion outside of Vietnam in the first half of this year, the highest amount compared to the corresponding periods previously. An FIA official said that a large proportion of registered capital would be invested in developed countries including Australia, Japan, Singapore and the United States.

Since opening the economy in 1986, Vietnamese companies have mainly invested in Cambodia, Laos, Russia and African countries. A majority of Vietnam’s outbound investments were made in oil, power, mining and plantation of Vietnam’s strategic crops for export, like cacao, coffee and rubber. But, the FIA official said many domestic companies were shifting strategic investment destinations from developing to developed nations.

“As companies in developed countries are struggling with the global economic recession, domestic companies are now taking chances to penetrate into those markets,” he said.

Saigontourist, a leading tourism company in Vietnam, recently revealed its $44 million plan to purchase a hotel in San Francisco. The 252-room hotel is one of the top tourism resorts in the American city.

A Saigon-based securities company also took advantage of the economic recession to invest in a hotel in New York, said the FIA official. However, he did not reveal the scale of the investment. Last week, BIDV announced it had received a licence to invest in Cambodia, including purchasing a local bank and establishing an insurance company.

Meanwhile, Vietnam Airlines is planning to join hands with a Cambodian partner to form an airline called Cambodia Angkor Air. “These rising outbound investments show that the financial capacity of domestic companies has become stronger,” said the official.

In a bid to push outbound investments, Prime Minister Nguyen Tan Dung asked the MPI to propose special incentives for companies investing in many sectors such as energy, mining and the production of raw materials outside the country.

The MPI is also drafting the amendments of Decision 78/2006/ND-CP, which regulates outbound investment procedures, in order to simplify administrative procedures and create favourable conditions for Vietnamese companies to invest overseas.

VietNamNet/Time-out