US firms interested in expansion in Vietnam
US firms interested in expansion in Vietnam
Although US President Donald Trump wants US firms to focus on domestic business, they still pay attention to investment in Vietnam and want to further expand and develop their projects, especially in the energy sector.
In addition to successful co-operation in Vietnam in power generation and aviation, General Electric (GE)’s president and CEO of the Asia-Pacific region (APAC) Wouter Van Wersch expressed the firm’s attention to Industry 4.0 and digitalising the economy.
Wersch emphasised: “We hope Vietnam will soon move to digital invoices as when we do big projects, we need to work with hundreds of suppliers who request paper invoices. This may cause mistakes. Moving to digital invoices is a great opportunity.”
Earlier in last May, Vietnamese firms and GE signed business deals worth $8 billion. The majority of the deals were for aircraft engines and the development of power generation capabilities, along with hospitality, science and technology, education, and energy. The deals are predicted to create more than 23,000 American jobs and help reduce the US trade deficit towards Vietnam, which stood at almost $32 billion in 2016.
In particular, GE and oil and gas giant PetroVietnam inked a framework for co-operation to develop two gas-fired power plants with a combined capacity of 1,500MW in the central province of Quang Nam, using about 830 million cu.m of gas from the Ca Voi Xanh (Blue Whale) gas field. Accordingly, GE will support PetroVietnam in finding the best technological solutions to ensure the effective use of input fuel and meet emission-related regulations.
Meanwhile, the Ca Voi Xanh (Blue Whale) field is operated by ExxonMobil Corporation, which is the largest US-based publicly traded international oil and gas company. This is the biggest and most complicated gas project in Vietnam, with reserves of 150 million cu.m, and is expected to contribute $24 billion to the state budget, which will open a new age for co-operation with ExxonMobil Corporation in Vietnam.
“This project is very important and can change the balance of investment and trade between the two countries, as well as enable ExxonMobil to become the largest investor ever in Vietnam. It is being deployed and needs the help of the Vietnamese government to be launched in 2023 according to plan,” noted the representative of ExxonMobil at the meeting between the US-ASEAN Business Council delegation and the Ministry of Planning and Investment’s Foreign Investment Agency (FIA) yesterday.
In addition, AES Corporation also completed the construction of Mong Duong 2 power plant in 2015, which has two units with a total gross capacity of 1,242MW and an investment of $2 billion. It makes a significant addition to the national power grid with more than 7.6 billion KWh of electricity annually.
In last May, AES committed to work with PetroVietnam Gas JSC (PV Gas) on the Son My liquefied natural gas (LNG) terminal project in the south-central province of Binh Thuan. It plays a significant role in the Vietnamese energy industry by diversifying the gas sources.
With the support of the Vietnamese government, AES believed that Son My LNG will be put into operation soon to meet the growing demand for gas and electricity in Vietnam, along with more and more projects of this US investor in Vietnam.
According to FIA, the total US investment capital pouring into Vietnam is $10.4 billion, and there is over $4 billion of indirect investment through third parties, while Samsung in particular poured $17 billion into Vietnam in only five years.
"This shows that the local regulatory environment offers great incentives that US firms have yet to capitalise on. There is a lot of room to increase co-operation between the firms of the two countries, and it is high time for us to raise our potential," director general of FIA Do Nhat Hoang emphasised.
The US-ASEAN Business Council (US-ABC) delegation to Vietnam this time includes 33 firms from various sectors such as GE, DOW, Qualcomm, UL, 3M, and Amazon. This is the strongest USABC delegation ever visiting an ASEAN country, a testament to the attention the US firms pay to Vietnam.
