VSIP’s upbeat view on investment inflows

Low Sin Leng

Low Sin Leng, chairwoman of Singapore’s Sembcorp Industrial Parks Ltd and co-chairman of Vietnam Singapore Industrial Park Joint Venture Company (VSIP), tells VIR’s Ngoc Linh why she is upbeat.

As Vietnam faces a devalued local currency, a rising trade deficit and ramping inflation, is this a difficult time to attract new investors to the country?

You saw when the global crisis happened in 2008, Vietnam’s economy was still very fine and foreign investors continued investing in Vietnam. But unfortunately, since last year, Vietnam has had a severe trade deficit and its local currency has been devalued compared to the US dollar.

This is a concern for many foreign investors. Particularly, if you look at Asia, all other countries’ currencies have appreciated against the US dollar, but Vietnam’s dong continues to depreciate. But I think Vietnam’s political leaders are closely looking at the issue. I hope that a solution can be found to stabilise the situation. Then I think foreign investors will come back.

Why are you so positive about Vietnam’s investment attraction ability?

Vietnam continues to be attractive because you have a strong population, about 86 million people and many of them are quite young. Having many young people means this is a dynamic country. Vietnam’s population continues growing.

So investors who see this is a strong domestic market and will come here. The only concern here is dong devaluation because it could impact on purchasing power of Vietnamese. But, I think Vietnamese government knows how to resolve those problems.

Furthermore, Vietnam’s political situation is stable, it is very important. Stable politics creates a relatively stable business environment for investors.

Have the economic challenges impacted on attracting investors to the two new VSIP township and industrial park projects in Bac Ninh and Haiphong?

I can tell that the success of VSIP in the southern Binh Duong province is taking shape in northern Bac Ninh province. Even though 2008 was the year when the whole world saw a very bad financial crisis, we still pursued project development. Today, we have 32 customers in Bac Ninh.

This is a quite good achievement in the short term. Within two years, we have good names coming in like Japan’s Foster Electronic Company Limited, which started production in the park. More importantly, PepsiCo decided to come to VSIP Bac Ninh. Similarly, we are moving equally fast in Haiphong.

For this project, we hope to bring the urbanisation process and economic development to the city to benefit local community. Haiphong is still relatively new project, but we think with the good progress in terms of land clearance, resettlement and infrastructure. There will be good investors coming to Haiphong.

At this early point in the project, we are focusing our efforts on the land preparation and infrastructure building just like what we did in VSIP Bac Ninh in 2008-2009, so that some area will be ready for the customers by the time the economy turns around.

But how does VSIP attract investors to the parks in Vietnam at this moment?

We have attracted Singaporean companies to the parks, not so much in the manufacturing sector but many in the services sectors. For example, education services, healthcare services and even property developer and banking services.

However, we not only focus on Singaporean companies, but also international companies having offices in Singapore. We have been successful in Vietnam for a number of years. It gives a lot confidence to other businessmen who want to come to Vietnam. We have a strong joint venture with Becamex IDC and strong support from the Vietnamese government, that allows foreign investors to have confidence to come to this place knowing that we will do our best to help them solve any problem.

I would like to add that on March 18 the Singapore Embassy in Hanoi hosted a business networking session for Singapore companies who have business interests in Vietnam. Other guests included Singaporeans already working in Vietnam as well as Vietnamese businessmen.

Such a networking platform was an excellent opportunity for fact finding, exchange of views from insiders and just making business contacts. So you see, apart from VSIP's marketing efforts, even our diplomats are putting in a lot of effort to introduce investors to Vietnam. I would encourage people to take advantage of such sessions where they can talk to experienced long time investors in the country.

Regarding Sembcorp, will the company continue investing in Vietnam?

We will continue to invest in Vietnam not only in industrial park township projects but also continue investing in other investments as we are also a power plant investor, in water treatment and environmental treatment. Looking at power plants, we are currently the shareholder in the Phu My 3 power plant.

We hope to continue investing in this sector. And water treatment and environment management are also important areas in Vietnam because the country’s economically progressed very fast with a lot urbanisation urban development and population growth.

Vietnam really needs to manage its water treatment system so its people can continue to enjoy good water quality. So this is an area we think Sembcorp can continue to invest.