11:23 | 26/05/2014 Economy
(VEN) - Thai businesses are driving their investment flows to Vietnam as a potential destination in order to make the most of the large consumer market and opportunities offered by the ASEAN Economic Community which is expected to be established by 2015.
Thai businesses promote trade and seek investment opportunities in Vietnam
Thailand became Vietnam’s largest trade partner in the Association of Southeast Asian Nations (ASEAN) after two-way trade exceeded US$9.4 billion in 2013. The two countries wanted to try to increase trade by 20 percent per year and reach US$15 billion by 2020.
Thailand currently has 344 projects with total investment capital of US$6.4 billion in Vietnam taking 10th place among the 101 countries and territories investing in the country. Vietnam also has eight projects with total investment capital of about US$12 million in Thailand.
Sontaya Sakullawan, the Director of Region 10 Industry Promotion Center under the Thailand Industry Promotion Agency, said that Thai investors considered Vietnam as the most potential market, particularly in terms of retail and industrial production.
For example, Berli Jucker Plc (BJC) bought the Family Mart chain with 42 shops in Vietnam and renamed it as Bs Mart in June 2013. The Bs Mart retail chain with 70 percent of products made in Thailand is expected to promote Thai brand names in not only Vietnam but also Cambodia, Laos and Myanmar by 2015 after the ASEAN Economic Community is founded.
The Central Group, a Thai leading retailer, opened a Robins plaza in Hanoi this March and is scheduled to inaugurate a second shop in Crescent Mall in the Phu My Hung Residential Area in Ho Chi Minh City by the end of this year, following the opening of the SuperSports, Cross and New Balance shops via distribution networks of the Central Group’s subsidiary companies.
Because of the popularity of Thai consumer goods in Vietnam Thailand’s Intimate Fashion Group plans to expand the scale of investment via cooperation with the Thien An Vien Co., Ltd. in producing Pavo-brand garments in Vietnam.
In addition, Thai investors developed their strength in industry and energy. The SCG Group boosted investment in cement, construction materials, and chemicals and paper in Vietnam which are their strengths. Charoen Pokphand (CP) continued to choose Vietnam to expand their investment in feed factories.
Thai investors planned to invest billions of US dollars in the Vietnamese energy sector. Specifically, the PTT Group was permitted to implement a US$27 billion oil refinery project in Binh Dinh Province. The Thailand International Power Company (EGATI) intended to partner with Vietnam to build a thermal power plant at a total cost of more than US$2 billion in Quang Tri Province.
The reasons for Thai investors to increase investment in Vietnam vary, including the large market, potential growth in purchasing power and easy access to other markets in the region. In addition, competition in Vietnam is not as severe as in Thailand underlining why Thai retail brand names are seeking every opportunity to expand their market in Vietnam. Moreover, Thai investors in Vietnam are strongly supported by Thai banks such as Karikorn and Krung Thai which plan to enter Vietnam together with Thai investors.
The government of Thailand currently applies special policies to help their medium and small-sized enterprises boost their investment abroad, said Sontaya Sakullawan./.
By Ngoc Thao