A group of 33 US investors of the US-ASEAN Business Council (USABC)-their biggest involvement to date-last week met with Vietnamese ministries to present their future plans and concerns. They included powerful brands such as General Electric (GE), Coca Cola Company, ExxonMobil, Amazon, Suntory PepsiCo, Dow Chemical Company, and AES-VCM.
Spotlight on energy investment
“Over the years, we invested in manufacturing, capacity building, and training, and we will continue to do so in the years to come. The focus for GE’s business activities are power generation, oil and gas, healthcare, and aviation-all of which offer great opportunities in Vietnam. We are also really keen to work with Vietnam in regards to Industry 4.0 and other digital areas,” said a GE representative.
Having operated in Vietnam for 25 years, GE now boasts 2,000 employees and a number of state-of-the-art manufacturing facilities in the country that deliver components to the rest of the world.
“We are very proud to have diversified activities in Vietnam with power generation and hydro and has plants-last week, we also announced plans in solar energy. In oil and gas, the Blue Whale project with ExxonMobil is a big priority for GE,” the representative added.
The US conglomerate, however, raised its concerns over paper invoicing in Vietnam, which caused difficulties for foreign investors.
“It’s normal to have a lot of paper invoicing requests in Vietnam. We really urge Vietnam to move to digital invoicing. When we do big projects, we have to have hundreds of different suppliers all handling paper invoicing, which becomes quite complicated and could result in some mistakes caused by human error,” he warned.
The Ministry of Finance recently launched a digital invoicing system applied to a limited number of enterprises as an initial step. It will take time, thus, to meet investors’ expectations.
US oil and gas giant ExxonMobil is fast-tracking its Blue Whale project in the central region of Vietnam. It could become the largest foreign-invested project ever seen in Vietnam and substantially change the US’ position at the foreign investment table.
“We have made progress with the completion of basic works over the past two years and are now ready to commence with engineering design. However, prior to this, we need to complete a government guarantee. We have not yet completed negotiations. That, effectively, is a critical part of the project, affecting when it starts and when it will finish. Our plan still is to commence power and gas production in 2030,” said a representative of ExxonMobil.
Another US energy firm that is keen on expanding its activities is AES-VCM Mong Duong Power Co., Ltd. In 2015, the company completed the Mong Duong 2 thermal power plant in Quang Ninh province and is now looking for its next projects in Vietnam.
“Our priority at the moment is the Son My 2 gas-fired thermal power project, on which we partner with PetroVietnam and PetroVietnam Gas. However, we need governmental support to join the project,” said an AES-VCM official.
IT and healthcare-potential, but concerns remain
In IT, Amazon Website Services (AWS), which marked its official entry into Vietnam in early 2017, looks forward to solving concerns in draft cyber security laws in order to expand its business and investment in Vietnam. This issue affects not only AWS, but also other digital economy and technology companies.
“Currently, the draft law requires the data of Vietnamese citizens to stay in Vietnam. It means that foreign companies who want to invest in Vietnam and provide services for Vietnamese citizens have to build data centres in Vietnam in order to operate in the market. This will increase costs for firms who want to expand business in Vietnam,” said an Amazon representative.
In the lucrative healthcare sector, global pharmaceutical company GSK, which has been active in Vietnam for 20 years, worries about growing issues related to legal entities.
“Like other foreign pharmaceutical companies operating in Vietnam, GSK needs a solution regarding the growing concern related to legal entities. It would enable multinational pharmaceutical companies to be efficient and flexible about partnerships, allowing them to work with local companies to maintain quality, supply, and safety,” said Daniel Millard, chief representative of GSK Vietnam.
To date, the US had registered to invest an accumulated US$10.5 billion in Vietnam. If investments of US subsidiaries in third countries is taken into account, the amount reached US$14 billion.
“Business activity started slowly for Americans here, but now we see US companies and investors active in almost every sector of Vietnam’s economy. Among other things, we support a path leading to a free trade agreement (FTA) between our two countries. For an FTA to move forward, it will need to be viewed as beneficial and fair by all parties. The American business community in Vietnam stands ready to do our part to make this goal a reality,” Adam Slitkoff, executive director of the American Chamber of Commerce in Hanoi, said.