Renowned French businesses extend reach across Vietnam

December 29, 2022 | 10:14
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French investment in Vietnam is picking up steam, indicating increasing confidence from investors and optimism for the domestic business climate.

CMA CGM Air Cargo, the cargo airline division of the CMA CGM shipping group from France, is reportedly seeking a flight licence in Vietnam.

Renowned French businesses extend reach across Vietnam
Renowned French businesses extend reach across Vietnam, source:

The carrier’s vice president of business development, Patric Bergamini, revealed the information during the ASEAN-EU Business Summit organised nearly two weeks ago in Brussels, as part of Vietnamese Prime Minister Pham Minh Chinh’s official visit to the EU.

Bergamini emphasised that CMA CGM was “dedicated to helping Vietnam’s economic growth by expanding Gemalink and providing logistical solutions via Ceva Logistics and CMA CGM Air Cargo”.

The French corporation has invested in Vietnam’s seaports since 1994 through its joint-venture partnership with Sowatco and Mitsui on the VICT Terminal in Ho Chi Minh City. CMA CGM also partnered up with Gemadept to launch the Gemalink container terminal at Cai Mep deepwater port in the south and Lach Huyen port in Haiphong city in the north.

Last month, energy company GreenYellow Vietnam successfully acquired the domestic subsidiary of Qair – a French independent renewable energy producer – as well as 70 per cent stake in Binh Dinh solar farm, a 49.5 MWp asset in operation on Vietnam’s central coast.

This acquisition highlights its commitment in the Vietnam and Southeast Asian market, where GreenYellow operates more than 250MWp of renewable energy projects.

In April, French health and beauty product business Sephora launched an e-commerce shop for the Vietnamese market after a five-month trial period.

Customers in Vietnam can purchase items directly from the merchant and take advantage of the company’s policy of cross-border deliveries to Vietnam, which was previously unavailable.

Sephora is owned by luxury empire Louis Vuitton Moët Hennessy, which also owns Louis Vuitton, Tiffany & Co., Christian Dior, Givenchy, and more.

Since entering Vietnam, Louis Vuitton has also seen significant revenue growth. Specifically, between 2019 and 2020 it surpassed the $26 million barrier.

According to fresh data compiled by the Foreign Investment Agency under the Ministry of Planning and Investment, French funding in Vietnam in the January-November 20 period reached $145.34 million, ranking 16th out of 107 countries and territories investing in Vietnam.

France’s investment in Vietnam reached $3.74 billion for $659 valid projects as of November 20, representing 14 per cent of the EU’s total foreign capital and ranking third among 26 European countries and territories that invest in Vietnam. In particular, French companies have pumped money into 35 provinces and cities across the country.

Several well-known French businesses, like SCAVI, L’Oreal, Sanofi, and VSTV (K+) were among the first to join the Vietnamese market several decades ago.

SCAVI, a subsidiary of Corèle International Group – a French lingerie and swimwear firm – has been providing an outsourcing service to the Vietnamese market for 30 years. This company has amassed the most earnings in Vietnam among French businesses, with manufacturers expanding across Dong Nai, Lam Dong, Hue, Quang Tri localities.

In addition, multinational pharma group Sanofi is the only international pharma company in Ho Chi Minh City, with three plants and around 1,400 employees nationally. After decades of operation in Vietnam, revenues have increased continually and hit around VND7 trillion ($304 million) by 2020. In July, Sanofi inaugurated a new Vietnamese GSP-standard pharmaceutical warehouse in the Mekong Delta province of Long An.

Some well-known companies, such as Decathlon in the sportswear industry, are rapidly growing in Vietnam and bringing in around $300-400 million per year.

Besides commercial operations, Decathlon – a network of innovative retail chains and brands – has partnered up with the German Agency for International Cooperation (GIZ) to launch a joint initiative to improve the environmental performance of the garment and textile supply chain in Vietnam.

With the agreement, signed in March, two GIZ projects are partnering with Decathlon Vietnam to strengthen the company’s suppliers in terms of climate action, water use, energy efficiency, and chemical management.

Adam Koulaksezian, executive director of the French Chamber of Commerce and Industry in Vietnam, believed in the strong optimism of French funds into Vietnam. “With 2023 being the 50th anniversary of diplomatic relations between Vietnam and France and the 10th anniversary of our strategic partnership, many projects are expected to materialise,” he said.

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