Singaporean firms set sights on local market

Singaporean investors are expanding their foothold in Vietnam

During his recent working visit to Singapore, Binh Dinh People’s Committee Chairman Ho Quoc Dung worked with leaders of the City State’s biggest economic groups, including Outward Bound Singapore, Sembcorp, CPG Corporation, Samwoh Corporation, Gammon Capital, and KinderWorld.

Sembcorp, specialising in energy, water supply, logistics, sea port and industrial infrastructure, is expected to construct a large service and industrial complex in Binh Dinh.

CPG Corporation, the Asia Pacific region’s leading infrastructure developer, is also expected to co-operate with some partners to deploy a number of infrastructure projects in the province, including the re-design of Phu Cat airport under international standards.

In June 2015, the committee granted an investment certificate to Yanmar Singapore Company for a $4 million shipbuilding project.

At a recent Singapore-based conference on Singaporean investment promotion into Vietnam’s Phu Quoc island chaired by Vietnam’s Minister of Planning and Investment Bui Quang Vinh, 10 Singaporean investors said they wanted to invest in property, tourism and logistics projects on the island.

“Singaporean investors consider Vietnam a good investment spot, thanks to the country’s improved investment climate and investment advantages, such as geographical proximity, low costs, and safety,” Vinh said.

Strong investment inflows

According to the Ministry of Planning and Investment (MPI), since 1998, bilateral ties between Vietnam and Singapore have gone from strength to strength. Singapore ranked among the top three investors in Vietnam in recent years, with 1,425 projects registered at $33.2 billion as of June 20, 2015.

According to the Singapore Business Group (SBG) in Vietnam, many Singaporean firms are rushing to Vietnam to do business, especially in the property, financial, manufacturing, health care, agriculture, foodstuffs, and consumer goods sectors.

For example, Brookline Medical Pte Ltd was recently reported to be the first foreign investor to register to buy shares in the Vietnam Central Transportation Hospital, the first clinic facility in Vietnam to be equitised in 2015.

In terms of agriculture, Olam Vietnam, which is the largest exporter of farm produce in Vietnam, has an $80 million modern instant coffee facility and seven large factories with 1,700 employees across central and southern Vietnam.

Since early this year, it has expanded its two agricultural product processing plants in Gia Lai province. Last year, Olam Spices & Vegetable completed an expansion in size and capability of its spices processing facility in Ho Chi Minh City. The facility enhances cleaning and storage processes for black pepper, and adds capabilities to process cinnamon, ginger, and nutmeg products.

In the consumer goods and foodstuff sectors, many Singaporean firms are performing well, including F&N, Gold Roast and Super Coffeemix, New Toyo, Serrano Vietnam, Hock Hin Foodstuffs, and ApecChem.

For example, in 2015, the restaurant group Les Amis opened two outlets in Ho Chi Minh City to offer unique dining concepts.

NTUC Fairprice also opened its second outlet in the city in April 2015 as anchor tenant of SC Vivocity, a retail development by Singapore developer MapleTree. Many other Singaporean firms, like Mapletree, Keppel Land, CapitaLand, Aquarius Vietnam, Ambrosia Vietnam, UOB Bank, Duxton Hotel, Banyan Tree, Gateway Ventures, and Ascendas Pte Ltd are also planning to expand their businesses in Vietnam.

While UOB wants to establish a bank with 100 per cent of foreign capital, Ascendas and Vietnam’s Saigon Bund Capital partners have signed a joint venture deal to build its third business park, named OneHub Saigon, in Ho Chi Minh City, at $130-million.

In June 2015, Singapore’s Ozou Media Lab leadership visited Vinh Phuc province on the hunt for other possible projects, including the building of international-standard hotels, and a further project related to tourism-oriented foreign language training.

During May 2015 in the legal sector, the Vietnamese office of Singapore-based law firm Rajah & Tann LTC Lawyers merged with the Ho Chi Minh City-based peer VN Counsel. This has helped strengthen Rajah & Tann Asia’s regional strength.

Also in that month, Singapore’s Dyson Singapore Company representatives came to Vietnam’s southern region in search of opportunities to build a factory for home electronic device production.

Ivan Tan, group director, Southeast Asia Group, International Enterprise (IE) Singapore, said Vietnam was an important investment destination for Singaporean companie, which had moved beyond the traditional economic hubs of Hanoi and Ho Chi Minh City into other geographical regions such as Danang in the centre central Vietnam and Haiphong in the north of Vietnam.

“IE Singapore sees opportunities for collaboration in three areas, namely urban solutions, manufacturing and consumer services, thanks to Vietnam’s rapid urbanisation, large workforce, abundance of land and increased middle and fluent class,” he said.

“Multinational corporations such as Intel Corp. and Samsung Electronics have expanded their manufacturing bases in Vietnam. We hope to bring more SMEs into Vietnam that will serve as support industries to these manufacturing giants. This will help Vietnam develop its own ecosystem and increase localisation in-market, as well as improve the local workforce’s skills,” Tan said.

Calling upon Singaporean investors, Minister Vinh said, “the Vietnamese government will ensure safety for all foreign investors in Vietnam, including Singaporeans. We are boosting the reform of administrative procedures to create a transparent and business-friendly climate for all investors. I hope that Singaporean investors will utilise the vast opportunities that Vietnam has to establish a new wave of Singaporean investment in Vietnam.”