Taiwan’s banks send in scouts

October 10, 2005 | 18:14
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“Anywhere there are Taiwanese companies, there will be Taiwanese banks,” is a common Taiwanese expression amongst banking groups. It’s now true in Vietnam.

Taiwanese banks are looking to cash in on Vietnam’s investment potential

Many Taiwanese banks are entering Vietnam to scout for potential business opportunities in light of fast-increasing Taiwanese investment inflows into the country.
There are currently four branches of Taiwanese banks in Ho Chi Minh City, namely ICBC, Chinfon, First Commercial and ChinaTrust. In addition, five representative offices of Sinopac, Union, Huanan Commercial, Taishin and Land Bank, have also sprung up.
Most Taiwanese banks in Vietnam are private commercial banks. They all serve companies and individuals but they have different target groups, with valued customers drawing their bank of choice to the market they choose to invest in.
Taishin focuses on financial services associated with import-export activities serving commercial activities of Taiwanese companies. Land Bank, meanwhile, focuses on real estate-related business and individuals, construction projects, agriculture/fisheries and industrial zone development.
Land Bank’s general director Truong Dien Hung said that the high growth rate of the Vietnamese economy is of major importance, although the main reason for its appearance in Vietnam is the presence of valued clients.
The appearance of these banks in Vietnam suggests that the flow of Taiwanese investment in Vietnam will continue growing strongly in the near future.
Taiwan is currently the biggest foreign investor in Vietnam with 1,363 projects totalling more than $7.6 billion of registered capital. Taiwan’s investment is expected to exceed $11 billion in the next three or four years.
According to Taiwanese banks, of every three Taiwanese enterprises investing in Southeast Asia one comes to Vietnam. They have seen the effectiveness of Taiwan’s projects in Vietnam, and with Vietnam’s accession to the WTO membership in the near future, they believe Taiwanese investors will look to grasp the potential opportunities.
Vietnam’s investment environment is very attractive in the eyes of Taiwanese investors. A large number of Taiwanese entrepreneurs are excited about the business environment here, said an official from Taiwan-based Vietnam Economic and Cultural Representative Office.
“Every week, an average of five small- and medium-sized Taiwanese enterprises contacted our office for information about the investment environment in Vietnam.
“Most of these enterprises are satellite companies of Taiwanese business groups. So when Taiwanese groups invest in Vietnam, their satellites will follow,” he said.
In the eyes of Taiwanese investors, Vietnam’s investment environment is very attractive. Now a large number of Taiwanese entrepreneurs are excited about the business environment here.
“You [Vietnam] are promoting investment here at the right time,” said Shih Ming Hsie, general director of Formosa Group, Taiwan’s largest privately-owned company.
Formosa has spent nearly $500 million in Vietnam, part of that in the Formosa Industrial Park for Taiwanese businesses in Nhon Trach, Dong Nai Province.
It is set to inject an additional $400 million into the country over the next few years. The capital will be used to build a power plant and an industrial park in southern Vietnam, according to Hsie.
Hsien Hsiang Wei, general director of the Qianding Company, said his company would start the construction of a stainless steel plant worth $700 million in Ba Ria-Vung Tau Province in early 2006.
“We decided to build the plant in Vietnam because the country has consistent regulations on foreign direct investment,” Wei said. “Vietnam’s domestic and export markets are developing rapidly.”
After the plant is completed in mid-2008, Qiangding’s five satellite companies from Taiwan also plan to invest in Vietnam, said Wei.

By Nguyen Hong


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