Italian firms plant seed for expansion
Italian firms plant seed for expansion
A growing number of Italian investors are taking an interest in Vietnam’s manufacturing sector as the country’s investment climate becomes more attractive.
According to the Italian Trade Agency (ITA), Italy is the third-largest EU trading partner of Vietnam. However, in terms of investment, Italy is less present than it should or could be. To date, Italian businesses have pumped over $304 million into 67 valid projects in
Vietnam. Among them, the manufacturing sector stands out in both the number of projects and the of investment.
“Italian firms deem Vietnam to be a reliable investment destination for them in the region following a wide range of free trade agreements (FTAs) such as the EU-Vietnam Free Trade Agreement (EVFTA) and the Trans-Pacific Partnership (TPP). These FTAs affirm the government’s effort to make a big change in the perception that Vietnam presents to the outside world,” said Bruna Santarelli, ITA’s trade commissioner.
She also noted that Vietnam was becoming highly integrated into the region with the establishment of the ASEAN Economic Community. “
Italian enterprises recognise Vietnam as a gateway into the ASEAN bloc, which is a key industrial and consumer market. As such, Vietnam has become an increasingly competitive market for Italian investors, especially those who would like to move their manufacturing facilities out of China,” Santarelli added.
Italian businesses said that China’s market was unstable, in addition to rising labour costs, and less favourable policies for foreign investors. Meanwhile, the Vietnamese government is striving to attract foreign investors with more investment incentives, quality industrial parks, and skilled workers. The trend of Italian firms flocking to Vietnam is a result of their China-based customers relocating their production bases here.
In addition, there is a growing interest from Vietnamese companies for Italian machinery, technology, and products. Vietnam has taken efforts to climb up the value chain, which requires more state-of-the-art equipment. Therefore, Italian businesses are forecast to make more investment in Vietnamese markets to meet the rising demand in the time ahead.
At the beginning of March, 21 Italian manufacturers will take part in the Propak Vietnam and Plastic & Rubber Vietnam events held in the Saigon Exhibition and Convention Centre in Ho Chi Minh City where they will showcase a wide range of high-end technologies and equipment catering to all factory production needs.
Santarelli went on to state that, “This trip is just a starting point for Italian investors to investigate Vietnam’s investment climate. We started to see more interest from Italian small and medium-d enterprises (SMEs). We expect there will be an increase in trade and growth in investment from Italy to Vietnam, especially in the machinery sector.”
“Although the of their investment is not large yet, they will grow larger gradually to satisfy both local market demand and exports. Some Italian firms like Piaggio Vietnam and Datalogic Vietnam have expanded their business activities and now consider Vietnam to be their manufacturing hub,” she added.
