Thailand-Vietnam trade leapfrogs up the ranks

July 24, 2020 | 11:00
Vietnam is preparing for a new wave of investment from one of its neighbours as Thai companies are signalling interest in expanding their operations in the domestic market.
thailand vietnam trade leapfrogs up the ranks
Brewers ThaiBev spent nearly $5 billion to acquire a majority stake of Vietnamese beer group Sabeco

Thailand’s Central Retail, a subsidiary of retail giant Central Group, plans to promote its presence in Vietnam to cover more than 90 per cent of cities and provinces in the next five years and mitigate dependence on the parent company’s home market.

At present, Central Retail operates 35 trade centres and 230 supermarkets and stores in the country, which contributed 20 per cent to its 2019 total revenue, making Vietnam the group’s largest market after Thailand.

Twelve Thai producers specialising in machinery and accessories, food and beverages, oil, textiles and garments, furniture, and medical gloves last week participated in both off- and online business-matching sessions to discover market potential and facilitate tie-ups between Thai and Vietnamese businesses.

Twelve exhibitors including four companies for offline sessions and eight companies for online sessions were selected and are willing to show their best products and support Vietnamese partners to penetrate regional supply chains for mutual benefits.

Fully foreign-owned P.S.P Specialties Co., Ltd. is trying to seek long-term distributors and partners who use lubricant blending in their manufacturing operation in Vietnam. Watcharapong Pathompanich, business development manager of P.S.P, said that Vietnam’s market potential is high as annual GDP shows a positive growth, which is a reliable indicator appealing to the company.

Chance and Challenge Co. Ltd. (CAC), a Vietnamese exclusive dealer for Thai products, specialising in biscuits, cheese, and butter, is also discovering new Vietnamese partners. The company aims at tourism destinations, such as Nha Trang and Quy Nhon, to expand its products’ reach beyond the north and central of Vietnam, apart from Ho Chi Minh City and the central city of Danang.

Duong Thi Hong Hieu, manager of CAC’s Department of Food Service and Industry, confirmed that the Vietnamese market is attracting more and more Thai products. Although these products’ presence previously declined during the pandemic, their suppliers who want to enter the Vietnamese market are increasing in numbers again. Since 2018, CAC has seen a a rise in its annual turnover of about 200-300 per cent.

Audsitti Sroithong, minister counsellor of Thailand in Vietnam, noted that Thailand has good products that fit the needs of the Vietnamese market. Besides this, the open policies of the Vietnamese government, a similar mindset, flavour, taste, and reasonable prices are also considerable aspects.

Amidst the current global trade situation, a growing number of businesses are seeking out the ASEAN or other alternative markets to invest in. Within the region, Vietnam has emerged as a highly attractive option for relocation, thanks to its pursuit of foreign investment, competitive costs, trade agreements, and liberal investment environment.

Sroithong stated that in the first five months of this year, trade volume between Thailand and Vietnam reached about $6.2 billion. Additionally, in the first six months, Thailand ranked second in terms of investment into Vietnam, with $1.58 billion, accounting for 10.1 per cent of the total, followed by China, Japan, South Korea, and Taiwan.

According to the Thailand Board of Investment, in the first half of 2020, Vietnam’s processing and manufacturing industry witnessed the largest volume of newly-licensed projects from Thai investors, reaching $173 million, accounting for 11 per cent of the total registered capital. It was followed by the production and distribution of electricity, gas, and air conditioners with $400 million; science and technology with $18,34 million; and wholesale, retail, and vehicle maintenance with $33.54 million.

The minister counsellor of Thailand also commented that the COVID-19 pandemic has not been a big problem for the trade connection of both countries. It is hoped that the Vietnamese government is moving to ease entry restrictions following the containment of the coronavirus, opening the entry ports for trade.

Programme on shifting from pig breeding to Australian cow production under high-tech value chains Announcement

1. Seeking suppliers of cows, grass, herbs, farming houses, rooftop electricity, and worker container homestay for the programme on shifting from pig breeding to Australian cow production under high-tech value chains initiated by Ly Nhan Development Investment Co., Ltd. The programme has received support from the government, ministries, and localities, as well as livestock farmers and banks.

The company has succeeded in developing its own “Ly Nhan Australia cow chain” registered with 60,245 farms, 12,600 of which have obtained contracts to connect with solar power grids (one hectare for each farm, producing 1MW).

The programme has been supported by the state, which commits that it will ensure capital for the programme when the company picks up loans from commercial banks to implement the project (as per Article 12.1, Article 3.6, and Article 15.7 of Decree No.57/2018/ND-CP dated April 17, 2018 of the government on incentive policies for enterprises investing in agriculture and rural development). The programme has been provided with a guiding document from the Ministry of Planning and Investment and offered power by Electricity of Vietnam for 20 years under the prime minister’s Decision No.13/2020/QD-TTg on incentives for the development of solar energy in Vietnam.

The company’s farm in Trang Dinh district in the northern province of Lang Son has received VND12 billion ($521,740) in support while the farm in Cam My district in the southern province of Dong Nai has been raising Australian cows. The farm in Hung Ha district in the northern province of Thai Binh has obtained Australia’s high-quality assurance ESCAS, with cows raised separately to become a model for visits and for business and designing of the said 60,245 farms.

2. Seeking partners to receive:

(1) Cow villas; (2) Meadow (3) Herbal mountains; (4) Roads; (5) Windmills; (6) Rooftop solar power; (7) Lumberjack village on the mountain; and (8) Herdsman hamlet by the river.

Priorities are for farm owners, locals, and students majoring in animal health and other majors related to the said supply chains but without employment.

3. Seeking partners to perform off-take contracts for products of these supply chains.

Priority will be given to partners from 60 nations hit by the African swine fever and regions hurt by the COVID-19 pandemic and flood.

For more information, please contact: Mobile phone or Zalo: 098.3399.548 . Email: lynhaninvest@gmail.com

By Truc Van

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