Bold overseas investments paying dividends

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The Foreign Investment Agency (FIA) reported that as of the end of 2012, domestic companies reaped $500 million in profits from their overseas investments, led by state-owned Viettel and PetroVietnam groups. This number is equal to one-eighth of the $3.8 billion that domestic companies had disbursed for overseas investments to the end of 2012.

PetroVietnam, the national oil and gas group, is Vietnam’s biggest investor in outbound markets.
The group reported it had developed seven projects in Russia, Malaysia, Venezuela and Peru and turned over $1.23 billion in 2012. Up to the end of last year, PetroVietnam had brought home an accumulative profit of $360 million, accounting for 61.2 per cent of the total profits made from Vietnam’s overseas investments.

Viettel is also turning heads. Last year, the military-run telco group reaped $734 million in revenue from telecom services in markets outside Vietnam, a 41 per cent jump on-year, and brought home $77 million in profits, a four-fold increase over 2011, according to Viettel’s deputy general director Nguyen Manh Hung.

Viettel is targeting a 15-20 per cent growth this year, with revenue surpassing VND160 trillion ($7.6 billion) and profit of VND34.6 trillion ($1.6 billion). Of this, over $1.1 billion is expected to come from outbound investments. To date, Viettel has deployed businesses in seven outbound markets, including Cambodia, Laos, Haiti, Mozambique, Peru, Cameroon and East Timor.  It is striving to have around 400-500 million subscribers in foreign markets by 2015, which will be bigger than its domestic subscription, according to Viettel’s development plan.

By the end of 2012, Vietnam’s total outbound investment reached $12.4 billion with $3.8 billion having been disbursed, according to the FIA. Vietnamese companies have invested in 712 projects in 60 countries.

There was a growing trend of overseas investment in Laos, Cambodia and Myanmar, the FIA reported. It also reported most of Vietnam’s outbound investments had focused on mining, oil and gas, hydro power, telecommunication and forestry. Some private firms are also actively expanding investments in these markets. Hoang Anh Gia Lai, for example, last week inaugurated a rubber processing plant with annual capacity of 25,000 tonnes in Laos’s Attapeu. The plant is located near a 10,000 hectare rubber forest previously planted by the company.