Dutch expertise expands in Vietnam

October 31, 2023 | 15:00

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Vietnam and the Netherlands are set to promote their ties across many sectors, with highlights expected in semiconductor manufacturing, infrastructure, and water cooperation.

Dutch-backed FrieslandCampina, among others, is putting sustainability at the top of its priority list

The Dutch Embassy to Vietnam last week announced that Dutch Prime Minister Mark Rutte will this week pay an official visit to Vietnam, where he will discuss further expansion of trade and investment ties between both countries.

A business delegation of 23 Dutch high-tech and digital companies and organisations will also accompany PM Rutte to Vietnam. Many are interested in opportunities in the semiconductor industry, which is become increasingly hot in the country following recent moves to develop the industry with attractive incentives on the back of US support.

For example, Dutch suppliers to giant chipmaker ASML Holding N.V. are exploring market opportunities in Vietnam. ASML Holding specialises in the development and manufacturing of photolithography machines, which are used to manufacture computer chips. ASML supplies chips to tech giants like Samsung, Intel, and Taiwan-headquartered TSMC.

Intel is operating a chip test and assemble facility in Ho Chi Minh City’s Saigon High-Tech Park and has already invested $1.5 billion in Vietnam and plans more investment expansions. Meanwhile, more than half of Samsung smartphones are manufactured in Vietnam, where the South Korean giant has invested about $20 billion.

The Netherlands is now the biggest European investor in Vietnam, with over 430 valid projects registered at $14.1 billion.

Dutch Ambassador to Vietnam Kees van Baar told VIR that there is potential for further growth of Dutch investment in Vietnam.

“To unlock the full potential of our economic relationship, it is important to connect more companies from both countries, like we are doing in these missions. In addition, our economic relations can benefit from further improvement of the investment climate in Vietnam,” Ambassador Baar said.

“I am convinced that with the right regulatory framework, our economic relations will continue to grow in the years to come.”

Investment already here

Last year, Prime Minister Pham Minh Chinh paid a visit to the Netherlands, reaffirming Vietnam’s determination to cooperate with the Netherlands in promoting both nations’ comprehensive partnership.

He asked the Netherlands to soon ratify the EU-Vietnam Investment Protection Agreement; encourage Dutch businesses to increase investment in industries with strengths in Vietnam such as seaports, shipbuilding, logistics, and infrastructure connectivity; support the European Commission’s removal of its “yellow card” warning against Vietnam’s aquatic product exports; and assist the Southeast Asian nation to develop seaports, airports, and innovation centres.

At the time, PM Chinh met with many leaders of Dutch groups. For example, Dolf van den Brink, CEO of Heineken, told him that the brewer will invest an additional $500 million in Vietnam over the next decade.

The company had previously inked an MoU with the People’s Committee of the southern province of Ba Ria-Vung Tau to further expand its Vung Tau Brewery - the largest in Southeast Asia - with an additional $142 million in the 2023-2025 period. The extra capital brings its total investment in the brewery to more than $500 million.

Similarly, Damen Shipyards Gorinchem is planning to invest an additional $100 million into Vietnam’s shipbuilding industry. “We also hope to assist Vietnam in developing a low-carbon transport network,” confirmed CEO Arnout Damen.

Many Dutch businesses with huge investments in Vietnam such as Unilever, De Heus, FrieslandCampina, and AkzoNobel were not only present in Vietnam from an early stage, but also continue to view the country as boasting potential for expansion.

More effective use

Richard Kiger, managing director of FrieslandCampina Vietnam (FCV), told VIR that it delivers its sustainability mission via the key pillars of better nutrition, packaging, climate, and sourcing.

“We know that a nutritious breakfast is critical for children to build a strong foundation for them to thrive in. We start with the task of educating consumers on the importance of nutritious breakfasts by anchoring Dutch Lady brand narratives and Vietnam’s critical nutrition challenges,” Kiger said.

To educate consumers at an early age, FCV leverages its strategic partnership with the Ministry of Education and Training to provide primary schoolchildren with nutrition education through a digital nutrition curriculum, Kiger said, with the aim to reach more than 1.5 million children by 2025.

“Our sustainability journey has just started, but it is a strong start, just like a glass of Dutch Lady milk for a strong start of the day, which ultimately helps to drive our growth and competitive advantages,” he added.

According to Vietnam’s Ministry of Industry and Trade, both nations’ bilateral trade hit $6.94 billion in the first eight months of 2023, with Vietnam’s exports of $6.5 billion and imports of $439.8 million.

The trade between the EU and Vietnam has also increased significantly since the EU-Vietnam Free Trade Agreement entered into force over three years ago. Particularly, exports from Vietnam to Europe have grown substantially and with 60 per cent of Vietnamese exports destined for European markets entering the EU via Rotterdam port, the Netherlands plays an important role in supporting and facilitating the further growth of EU-Vietnam trade.

Ambassador Baar explained, “As the main logistical hub and gate to Europe, we are also interested in supporting the development of the logistics sector in Vietnam. For Vietnam’s growing exports to be shipped all over the world, it is important to develop green and smart logistical infrastructure.”

Now, Vietnam and the Netherlands are cementing bilateral ties in many sectors, including seaport development. According to the Dutch Embassy to Vietnam, the Netherlands has outstanding expertise and experience in port development and logistics, with some companies already having a track record in Vietnam for decades.

However, with increasing trade between Vietnam and Europe, there is an increasing risk of port congestion, and developing new ports is costly and time-consuming. “In order to make more effective use of the already existing ports, we see opportunities to further develop inland waterway transportation, digitalisation, and improve port operations,” Ambassador Baar said. “Of course, Dutch companies and experts are looking forward to assisting Vietnam in further port development, and this also applies to airport development.”

The Netherlands has pledged to promote cooperation with Vietnam in renewable energy development and provide assistance in terms of offshore sand mining technology, land erosion prevention, and amendments to the Law on Water Resources.