Private enterprises boosting offshore investments
Private enterprises boosting offshore investments
A lot of private enterprises in Vietnam are shoring up offshore investment activity, particularly in regional markets, to make the most of material sources and tap into opportunities presented by these growing markets.
Hoang Anh Gia Lai (HAGL) is a case in point. Chairman of the group Doan Nguyen Duc said it is pouring much money into breeding cows imported from Australia at its farms in Laos and Cambodia in addition to those in Vietnam.
The firm headquartered in the Central Highlands province of Gia Lai looks set to increase its cow herd to 100,000 head this year and 200,000 head in the following year to meet rising demand for quality beef on the domestic market.
This is the first fruit of the cow farming and milk processing project, which is worth VND11-12 trillion and was kickstarted last year by HAGL, Nutifood and Vissan.
Vietnam Dairy Products Company (Vinamilk) is accelerating work on its overseas projects this year to increase its supply capacity and diversify products. The firm is stepping up the implementation of a US$23-million project in Cambodia, in which it holds a 51% stake.
Companies in other sectors have set foot in regional markets to explore new opportunities. Last year, Audi Vietnam opened a showroom in Phnom Penh, Cambodia at a cost of over US$2 million. The 2,200-square meter showroom consists of sections for display, repair and parts.
According to investors, offshore investments help them expand markets, earn higher revenues, promote brands, and find new resources and materials which have become rare at home.
Nova Group, the developer of many real estate projects in HCMC, has partnered with Ireland’s Kerry to raise cows in Ireland and build a distribution system to process milk powder for children in Vietnam.
Nguyen Hieu Liem, vice chairman of Nova Group, said the company will invest more than US$50 million in the project and expected the abundant supply of materials in that market and the modern factory of the foreign partner will enable it to turn out quality products for the Vietnamese market.
Hung Vuong Corporation has reached an agreement with a Russian partner to build seafood processing and storage facilities with an investment of some US$30 million in Moscow, Russia. If everything goes smoothly, the project will get off the ground some time this year.
Earlier, the giant seafood processor in Vietnam also revealed its investments in Indonesia.
Hoa Sen Group is also preparing plans to do business in Myanmar, Indonesia and Thailand.
According to the Foreign Investment Agency (FIA), the Ministry of Planning and Investment last year licensed 109 out of the 153 projects invested by domestic firms in 28 countries and territories, and adjustments to 22 other projects.
Total registered capital for fresh and additional projects neared US$1.79 billion last year, and the number of licensed projects picked up 10% on the previous year, according to FIA under the ministry.
Vietnamese enterprises had registered a total of US$19.78 billion for 930 projects in overseas markets by end-2014.
Experts said more offshore investments showed many Vietnamese firms have grown stronger in terms of revenue and market share. Though many overseas projects have generated profit, others have not brought positive results and are grappling with woes.
Possible land rent hikes and different investment regulations, cultural norms and language barriers in foreign markets might affect some Vietnamese-invested projects, according to investors.
Some enterprises complained that they have found it hard to seek assistance from Vietnamese representative agencies in the foreign markets where they are present.
