09:53 | 24/07/2019 Economy
(VEN) - Representatives of Australian businesses assess Vietnam’s attractions and potential growth opportunities in different industries.
David Bedingfield, Joint Managing Director, Sapphire Vietnam
Sapphire has been in Vietnam for quite some time and seen the country undergo rapid and sustained change. Through this, the country has maintained its economic focus under the government’s stable and thoughtful management, characteristics necessary to attract more global investment.
In tandem, the property market has also seen significant growth, something we expect to continue. Not only in size, it has become more sophisticated, making Vietnam the perfect environment for property developers.
Also maturing are the country’s residential buyers, who, now, compare not only project quality but also developer histories and reputations before making a final decision. Quality developers are seeing more support than ever as the market comes to know and trust them.
Commercial tenants also have raised their expectations and are now in search of an office that will help them attract and retain the best employees. Developers who can deliver superior amenities are enjoying better demand and higher rents. Vietnam’s matured market is thanks in part to its improved economy, which has benefitted everyone financially. As people earn more, they are able to afford better for themselves and their families. Ultimately, this is driving the growth of the luxury market. With more money, people’s desires for luxury will continue to fuel the sector. Our experience with HOLM is an excellent example of this; the luxury property sector is still good value compared to similar projects around the globe - we expect the market will correct within the next two years, making now the right time to buy.
Furthermore, unlike smaller luxury products, investment in luxury property provides security with outstanding capital growth. However, for a luxury property of any size to succeed, an appropriate site needs to be identified first - and in Ho Chi Minh City, there are not many. This is precisely what makes a luxury property valuable - scarcity.
As a leading property developer in Vietnam with focus on office and residential, our expertise comes from what we’ve done well and seen work in other countries. We have been successful in Vietnam and enjoy a good track record, which we expect to maintain. While we’re currently focused on Ho Chi Minh City for its ample opportunity, when the time comes, Hanoi will be our next destination.
We believe many foreign developers will come to Vietnam in search of the success we’ve seen. The most important step is to make the decision and really commit to Vietnam: invest but also take the time to understand Vietnam and its people. If you do both of these, you will find it very rewarding.
Matthew Lourey, Managing Partner, Domicile Consulting & Service Company Ltd.
Having lived and worked here for 14 years, I have witnessed Vietnam’s fast economic growth that has generated significant opportunities for foreign businesses in general and Australian companies in particular. Vietnam is open for foreign investment and is a preferred destination for international businesses, particularly after the country joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as well as signing the EU-Vietnam trade and investment agreements. These will open up new opportunities for those who intend to invest in Vietnam. We see advantages for Vietnam in attracting FDI, especially high quality foreign investment because of the country’s young, educated, and dynamic labour force as well as lower labour costs in comparison with other countries in the region. Australian businesses are looking at Vietnam as a new promising location for promoting their investment, business, trading and services abroad. There are many sectors of interest in Vietnam including food processing, consumer production, retail and the other services. Businesses of both countries can take advantage of the CPTPP, using it as the basis for tightening our partnership and opening a new path to mutual growth.
Vietnam is attracting global focus as the emerging country in Asia Pacific and the gateway to the Southeast Asia with its impressive, fast-paced economic development. Foreign SMEs can also use the opportunities to explore Vietnam’s potential.
We are happy after establishing our business in Vietnam five years ago, and are expecting to continue to expand our team over coming years. Our company, Domicile Corporate Services, provides corporate compliance and outsourcing services in Vietnam, covering accounting, taxation, payroll, company establishment, reporting and compliance reviews.
Phil Johns, General Manager, Triac Composites
Triac Composites was established in Ho Chi Minh City in 2014 by its three Australian owners, two of whom were already living and working in Vietnam for many years. There were two key reasons for choosing to invest in Vietnam. The first reason was the supportive foreign ownership laws which allow 100 percent foreign ownership. The second reason is the country’s youthful workforce which is quite well educated and, significantly, is eager to develop and learn. With the composites industry being relatively new to Vietnam, these attributes about the work force being keen to learn were particularly appealing.
Triac Composites is investing in technology to ensure that Triac and Vietnam are at the leading edge in composites. Accordingly, our equipment includes an industrial robot, CNC machine, autoclave and clean room. We manufacture (extremely light and extremely strong) high-tech products and components from carbon fiber/fiberglass/kevlar for multiple industries including marine (eg pleasure and commercial boats), transport (eg passenger interiors), construction and architecture (eg building facades) and the mining industry. Much of our product is manufactured for export but we are also seeing increased demand in Vietnam.
We believe that composite boats (pleasure, commercial and patrol) have a big future in Vietnam. In anticipation of the growth and developing requirements of the tourism industry, we now offer a range of passenger power catamarans. These composite boats, built to international construction and safety standards, will enable tourism operators to unlock Vietnam’s long and scenic coastline, as well as its 40,000 kilometres of rivers.
Vietnam’s commitment to free trade and opening up further opportunities for business to increase the rate of employment is acknowledged and applauded. It is a founding member of CPTPP and has free trade agreements with ASEAN, China, the Republic of Korea and the European Union.
At Triac Composites, we are currently taking advantage of the free trade provisions under AANZFTA (ASEAN-Australia-New Zealand Free Trade Agreement) for our first orders to Australia of carbon products for the mining industry. For new foreign investors wishing to set up in this wonderful country, they will need to do their homework. They should think carefully about which ownership model suits their business model better - whether that be “going alone” in Vietnam by being 100 percent foreign-owned or finding a local joint venture partner.