Singapore's Sembcorp upbeat on Vietnam's outlook

Kelvin Teo, CEO of Sembcorp Development and co-chairman of VSIP Group

How do foreign investors see Vietnam, especially after the improvements to its investment climate?

Vietnam is making a mark for itself as a dynamic emerging country in Asia. The latest government statistics show strong foreign direct investment (FDI) inflows in the first six months of the year, building on the record FDI attracted last year. With continued stable leadership, the economy will continue to grow stronger. Vietnam has done especially well in signing several important bilateral trade agreements that will facilitate its global integration and extend this advantage to foreign investors. Vietnam’s middle class is also growing, making the domestic market attractive for foreign goods.

How does Sembcorp benefit from the growing foreign influxes into the country?

Sembcorp jointly operates the VSIP brand of integrated townships and industrial parks in the country. The increase in FDI from the manufacturing and processing sector has led to higher occupancy levels at the VSIPs, so much that we have expanded in Binh Duong and Bac Ninh provinces. Sembcorp is also in the energy business, so there are opportunities to scale up in Vietnam and support the country’s industrialisation journey.

Could you share about the investments Sembcorp made in Vietnam over the past few years, especially at the VSIP projects?

There are now nine VSIP projects across the southern, central, and northern economic zones of Vietnam. This is inclusive of the two new VSIP expansions in Binh Duong and Bac Ninh. We are in the process of reviewing the master plans for approval before launching to the market. We are exploring a new industrial park design which is more sustainable in the form of energy efficiency and smartness so as to help our industrial tenants operate more competitively.

To do this, we have recently established a Sembcorp country office in Hanoi with the intention to bring more urban solutions to Vietnam using Sembcorp Group’s combined strengths in energy, water, and urban development.

What are your recommendations to improve the local investment climate to facilitate foreign investors, particularly investors from Singapore like Sembcorp?

We admire the way the Vietnamese government, both at the central and local levels, works with foreign investors to understand our needs and support our plans. Several provincial airports, major highways, and bridges have been completed in the country. Such infrastructure is critical as they enable businesses and communities to capitalise on the connectivity between cities and local synergies. With the growth of the communities around us, there is also greater supply of manpower for businesses to hire. These are win-win outcomes for all, so infrastructure development is not to be underestimated.