Vietnamese enterprises seek foreign opportunities

July 26, 2011 | 10:11
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Vietnamese companies have to date registered over $10 billion in investments into nearly 600 projects abroad.
Viettel Group is among Vietnam’s most successful firms in terms of overseas investments

According to the Ministry of Planning and Investment’s Foreign Investment Agency (FIA), of the total registered capital, Vietnamese companies have disbursed around $2 billion.

In the first four months of this year, local companies were licensed to inject a total $1.74 billion into 26 projects abroad.

Vietnamese firms are boosting investments in many different areas, including energy, traditional handicrafts, forestry, agriculture and telecommunications.

Military-owned telecommunications giant, the Viettel Group is among Vietnam’s most successful firms in terms of overseas investments. The military-run telecom group has expanded its investments to the five markets of Cambodia, Laos, Mozambique, Haiti and Peru.

By the end of June this year, it reached more than six million mobile phone subscribers in Cambodia and 1.5 million subscribers in Laos. From now until 2015, it will invest an additional $500 million into foreign markets.

PetroVietnam has invested in 24 oil exploitation projects in 17 countries in the world. Meanwhile, the Hoang Anh Gia Lai Group has registered $500 million into real estate, rubber, metallurgy and hydropower abroad.

Do Nhat Hoang, Head of the FIA, said "Despite facing more business difficulties than previous years, Vietnamese firms will continue pouring more capital abroad in the coming years.”

An official from Viettel Group said all businesses target growth, and with the domestic telecom market set to reach saturation point, particularly when more foreign rivals enter the market, investing abroad will become an inevitable trend.

According to Dr. Le Tham Duong from Ho Chi Minh City University of Banking, expanding overseas investments will help Vietnamese companies to sharpen their competitiveness and seek potential markets.

However, the Vietnam News Agency cited Ministry of Planning and Investment statistics that revealed that despite overseas investments averaging $66 million a project, much higher than the average $14.6 million for foreign direct investment projects in the country, the return on overseas investments has been very poor so far. Although volume has risen steadily over the last few years, there has been increasing concerns over the efficiency of overseas investments.

Dr Nguyen Minh Phong of the Hanoi Institute for Socio-Economic Studies noted that in some cases, local businesses have considered overseas investment projects purely to speculate on real estate, or to relocate abroad.

The FIA has recently required Vietnamese investors with projects abroad to submit reports on their business performances, in order for an audit to be conducted on the efficiency of such projects, and the transfer of capital abroad by state groups and enterprises.

VEF

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