Vietnam welcoming added US cooperation

US-backed Cargill has been expanding its investment in Vietnam

Right after the normalisation of bilateral relations between Vietnam and the US in 1995, US-backed animal feed maker Cargill was one of the first American companies to establish business in Vietnam.

“Vietnam is an important market to Cargill globally and the company continues to invest to this day, and this is further demonstrated with the commitment of a new, $28 million speciality nutrition plant in the southern province of Dong Nai, to be commissioned in late 2022,” Luan Nguyen, country president of Cargill Vietnam, told VIR.

Today, Cargill runs 11 animal nutrition plants and a grain and oilseed warehouse, and two aqua technical application centres in Vietnam. The project in Dong Nai will raise Cargill’s total investment in Vietnam to $160 million.

Investment engagement

The story of Cargill in Vietnam was mentioned during last week’s working session in New York between Vietnamese Minister of Industry and Trade Nguyen Hong Dien with leaders of AES Corporation. Discussing AES’ invesment and activities in Vietnam, Dien said the Vietnamese government highly values US investors like AES, Cargill, and Intel that are contributing to a great deal to the country’s economic development. “They have helped promote Vietnam as a reliable investment location, contributing to the strategic trust between the two nations,” he said.

At the meeting, Vietnam’s oil and gas group PetroVietnam, PetroVietnam Gas, and AES also witnessed the establishment of a joint venture – Son My LNG Port Warehouse Co., Ltd. – to construct a liquefied natural gas port warehouse in the south-central province of Binh Thuan. The $1.31 billion project will receive, process, and supply 3.6 million tonnes of gas for the Son My 1 and 2 power plants in the province when it becomes operational in 2025.

During his time in New York last week to participate in the 76th session of the United Nations General Assembly, Vietnamese State President Nguyen Xuan Phuc hosted receptions for leaders of major US companies looking to increase investment in Vietnam. These enterprises included GE, CFM International, AviaWorld LCC, Cantor Fitzgerald, DeLong, Valero, AGP, and UPC Group.

The Vietnamese leader also witnessed the signing of an agreement worth nearly $2 billion between Vietnam’s Bamboo Airways and GE Aviation. Under the deal, the airline will purchase GENx engines to power its Boeing 787-9 Dreamliner aircraft and a maintenance package for its Boeing 787-9 fleet.

Bamboo Airways also announced the launch of its Vietnam-US direct route. If conditions permit, the flight service will begin in early 2022 with three weekly flights initially.

Earlier this month, Prime Minister Pham Minh Chinh received US Chargé d’Affaires Christopher Klein and representatives from US enterprises and investors in Hanoi. PM Chinh was told about their operations in Vietnam, which will be expanded in the time to come, and listened to their problems and proposals about supply chains, logistics, work permits, and access to vaccines.

A quarter of a century ago, the Vietnam-US economic relationship was nearly non-existent. Now, Vietnam is one of the US’ top 10 trading partners, and its economy is critical to US supply chains with many big US companies investing in Vietnam.

“That is a big area of focus for us here in Southeast Asia and, in particular, in Vietnam,” said US Vice President Kamala Harris during her August 24-26 visit to Vietnam. “Vietnam holds a particular importance and significance to the United States.”

Statistics from Vietnam’s Ministry of Planning and Investment showed that as of August 20, US investors registered $9.69 billion in Vietnam for 1,122 valid projects, making the US the 11th largest foreign investor in the nation. In the first eight months, the US ranked eighth in investment in Vietnam, with total newly-registered capital of $426.9 million.

Figures from Vietnam’s General Statistics Office showed that in the first eight months of this year, the US was Vietnam’s largest export market, with total turnover of $62.1 billion, up 32.3 per cent on-year, and the US was also Vietnam’s sixth-largest import market, with importers using $10.3 billion to purchase goods from the US, up 11.8 per cent on-year.

Cementing vaccine cooperation

COVID-19 is currently the top issue for the Vietnamese people, and the US is mulling over providing more vaccines to Vietnam.

During Vice President Harris’ visit to Vietnam, the US supplied over one million vaccine doses of the German-American BioNTech-Pfizer to Vietnam, besides the five million Moderna vaccine doses already provided through the COVAX Facility.

“I know the Vietnamese people are facing a difficult time right now with COVID-19. We also know that early in the pandemic, Vietnam was generous in supporting the US in our time of need, with over 250,000 personal protective equipment and masks. So we are proud to reciprocate in your time of need, most recently with these one million Pfizer vaccines,” Harris said.

Last week, President Phuc visited Pfizer headquarters, suggesting the company increase vaccine supplies to Vietnam as soon as possible, with all the products to be provided by late 2021 under a deal in which the firm will provide Vietnam with 31 million doses, and soon concretise a roadmap for transfering vaccines for kids of 12-18 years old to Vietnam. Jonathan Selib, senior vice president of Global Policy at Pfizer, confirmed there will be 31 million adult doses for Vietnam in this year and another 20 million kid doses will be for the country after they are tested to be safe.

Earlier on August 21, PM Chinh had an online talk with Pfizer CEO Albert Bourla, suggesting Pfizer quicken the handover of COVID-19 vaccines promised to Vietnam under the deal. Chinh hoped to promote strategic, long-term cooperation with Pfizer in pharmaceuticals, research and development, and technology transfer, as well as improving Vietnamese healthcare. Bourla said Pfizer stands ready to help the nation get vaccines from other countries through different transfer forms.

Call for help

On September 18, the American Chamber of Commerce in Vietnam (AmCham) sent a letter to US President Joe Biden, proposing that the US provide more vaccines to Vietnam.

According to AmCham, in recent months, among other products, Vietnam accounts for almost a third of US footwear manufacturing and a fifth of US apparel manufacturing by dollar value. More than half of Nike’s footwear manufacturing occurs here, for example, while Gap and Lululemon each rely on Vietnam for roughly a third of their manufacturing.

“The factory shutdowns in Vietnam threaten global supply chains and a long list of challenges that US brands face in delivering reasonably-priced goods in time for the upcoming holiday shopping season,” said the letter. “Our members believe that increased US donations of vaccine to Vietnam will not only help fight the pandemic here, but will also benefit the American people as millions of American workers are directly dependent on suppliers around the world having healthy workforces. You have an opportunity to not only save in Vietnam, but also livelihoods, which will support continued economic recovery in the US.”

A source from a big US group, also an AmCham member, told VIR that over the past three months, all of the company’s mills in the southern region of the country had to switch to “stay-at-work” production, which has caused massive difficulties for the company. “Costs have skyrocketed as the company has had to, in addition to big testing costs, buy foodstuff and new equipment such as TV, beds, fridges, and many other items for the workers to use on the spot,” the source said. “Meanwhile, the workers cannot stay in the factory for a long time, they have families to go home to. Revenue has reduced significantly while the company cannot increase product prices as it still has to compete with rivals.”