Russia’s “Look East” policy to bring new opportunities to Vietnam
Russia’s “Look East” policy to bring new opportunities to Vietnam
Russia has made moves recently that show it is strengthening cooperation with Vietnam as an important part of its “look East” policy. Both Vietnam and Russia are seeking big opportunities in the cooperation.
Prior to that, many big Russian conglomerates announced big investment deals in large projects in key business fields in Vietnam.
The Voice of Russia reported that Russia has chosen atomic group Rosatom for the first cooperation project with Vietnam to build the first nuclear power plant in Vietnam – Ninh Thuan 1 with two 1,000 MW nuclear reactors.
In May 2014, at St. Petersburg Economic Forum, Rosneft, the Russian national oil and gas group, signed an agreement with PV Oil on providing 6 million tons of ESPO a year in 2014-2039 to Vietnam to run the Dung Quat Oil Refinery.
PV Oil is one of the major partners of Rosneft in Asia Pacific.
Also according to The Voice of Russia, the two large groups Rosneft and Gazprom Neft are considering buying 49 percent of stakes of Vietnam’s Dung Quat Oil Refinery. Meanwhile, Zarubezhneft has been cooperating with PetroVietnam in the Vietsovpetro joint venture project, providing 85 percent of crude oil materials to Dung Quat.
Not only is it looking for investment opportunities in Vietnam, Russian also sees Vietnam as a supply source of high quality products in the context of the western sanctions against Russia over the Ukraine crisis.
Dozens of Russian businesses recently came to Vietnam to seek supply sources of consumer goods such as clothes, footwear and wooden furniture.
Pravda, a Russian newspaper, on November 18 published an article about the importance of Russia-Vietnam cooperation to Russia’s “pivot upon Asia” strategy.
The article says with the free trade agreement between Vietnam and the Customs Union of Russia, Belarus and Kazakhstan, Vietnam will serve as the bridge for Russia to reach out to other South East Asian countries.
Business opportunities
The Hung Vuong Seafood JSC in early October received a big loan from BIDV Bank which will be spent to develop the Russian market. The company hopes it can raise two-way trade in the market to $200 million in 2015.
According to Hung Vuong, Russia is not importing food now from the US and Europe, so Vietnam’s catfish and seafood products will be sold in 84 cities and provinces in Russia, not only in Moscow.
Russia is also seeking alternative supply sources of tomato, potato, apple, vegetable, tea, coffee, pepper, rubber, cashew nuts, catfish and wooden furniture. All of these products are in abundant supply in Vietnam.
