Vietnam positioned itself more investor-friendly: Singapore businesses
Vietnam positioned itself more investor-friendly: Singapore businesses
Vietnam, which has robust infrastructure development and offers favorable conditions for foreign investment, is a strategic location that is near major Asia countries and important shipping routes, creating a business-friendly environment.
Vietnam has a relatively stable investment environment that is more attractive to investors, especially those from Singapore.
A number of Singaporean businesses have shared this view when seeking opportunities and expanding their investment portfolios in Vietnam – an ideal destination for Singapore’s investment flows.
The Hanoi Times has recorded Singaporean executives’ perspectives regarding their investment choice in the market of 100 million people.
Daniel Lim, General Manager of Hibex Vietnam. |
“In comparison with the current global political and economic instability, Vietnam
enjoyed a relatively stable and strong growth,” said Daniel Lim, General Manager of Hibex Vietnam. He noted that his perspective of the market is based on his personal observations formed since he has been stationed in Vietnam in 2011.
Daniel Lim insisted that Vietnam will continue to be one of the world’s fastest-growing economies. Despite the Covid-19 pandemic in the last few years, the country is set to achieve high GDP growth in 2022.
Echoing Daniel, Jack Eng, MD, Soda Vision Pte Ltd, said the fact that many major manufacturers have moved their manufacturing facilities to Vietnam in recent years. In this regard, his company is seeking to take the chance in this potential market.
“We would like to work in close vicinity with our key customers in Vietnam in terms of providing local support, faster response, and better satisfaction,” Jack said from the perspective of a firm that is a value-added distributor of top-class machine vision components and provider of advanced modular vision solutions.
For Eddie Ong, Chief Operating Officer at Efunity Pte Ltd which provides an energy management system with real-time monitoring and tracking of energy performance, Vietnam is a country that is close to Singapore, and it has a relatively big population with growing affluence. In addition, the economic policies adopted have become more investor-friendly over the years.
Jack Eng, MD, Soda Vision Pte Ltd. Photo: Eileen Ang |
Firm support
For Singaporean investors, the main reasons making Vietnam attractive are better policies, intensified infrastructure, and a good population.
Daniel said Vietnam offers favorable conditions for foreign investment, such as a strategic
location that is near major Asia countries and important shipping routes. Infrastructure development was robust, and many new highways and high-speed rail routes were built to link various industrial zones, creating a business-friendly environment.
He mentioned some other reasons, including a young and capable workforce, low labor costs, and an open environment for foreign direct investment (FDI).
According to him, several global manufacturers of high-tech products had set up manufacturing plants in Vietnam, thus, offering a wide range of business opportunities for Hibex Vietnam.
“Summing up the aforesaid points, Hibex Vietnam is in a positive position to put in more investment into the local market and expand our office operation,” asserted Daniel whose company supplies a wide range of machinery and materials to the PCB, Semiconductor, SMT, Robotics and many more.
Meanwhile, Lee Eu Harn, Co-founder of Auk Industries, an industrial IoT company and focusing on the manufacturing sector, said Vietnam is a major manufacturing hub in ASEAN and is still on an upward trend. “This presents a growing target market for Auk Industries.”
Furthermore, a large pool of young workforce also makes new technology adoption easier (onboarding of new technology within a company is always a big challenge) as compared to an aging population (more resistant to change), Lee noted.
Lee Eu Harn, Co-founder of Auk Industries. |
Prospective
Regarding the market potential, Daniel stressed the importance of manpower. He said with its young and enthusiastic workforce (more than half is in the labor force), Vietnam will be one of the strongest manufacturing countries in the Southeast Asia region.
Moreover, Vietnam is politically stable and hence, attracts many foreign investments. “In my personal opinion, Vietnam will be the next “Dragon” in SEA and as a matter of fact, the country’s GDP had already overtaken several SEA countries,” Daniel emphasized.
Jack gave another idea: “I have seen some technology transfer happenings from overseas manufacturers to local companies in recent years and I feel this is a good sign for continuous growth in Vietnam's market.”
He added that the abundance of human labor is a significant advantage for local manufacturers in Vietnam, however, factories should start investing in automation technology now to prepare for the next 5 to 10 years.
Lee commented Vietnam is unique, unlike other countries in ASEAN. We have operations in Singapore, Malaysia, Indonesia, and Thailand but what works there may not necessarily work for Vietnam.
He went on to say though the market is huge (population size of more than 600 million), ASEAN is not a single homogenous market, as compared to countries such as the US and China. To navigate the market more effectively, AUK Industries have been building a local partner ecosystem since the start of 2022.
The combination of a rising manufacturing industry (in terms of quantity and value) and a large young workforce is the perfect storm for the wide-scale adoption of digital transformation/I4.0 technologies, Lee stressed.
Eddie, meanwhile, highlighted the role of manpower and the benefit that well-invested infrastructure brings about. He said with improving education, the Vietnam market has huge potential. Improving existing infrastructure will play a big role in how fast the Vietnam economy can grow and develop.
As a result, Soda Vision will speed up our investment in the local market. “Vietnam tops the GDP growth rate in the entire Southeast Asia region, and we wouldn’t want to miss the business opportunities,” Jack affirmed.
Eddie also foresees more investment into the local market, saying that Efunity is eager to reach out to the right partners in Hanoi and Ho Chi Minh City.
ITAP is an effective channel connecting Singaporean and Vietnamese businesses in industrial/digital transformation. Photo: Linh Pham |
Effective channel
To operate and expand investment in Vietnam, it’s necessary to find out an effective channel to link Singaporean businesses with their Vietnamese partners and customers. For many companies from Singapore, Industrial Transformation Asia-Pacific (ITAP), the annual event held in Singapore, is a helpful channel in connecting the market and Vietnamese partners.
Jack stated that ITAP is useful to help us connect with major technology enablers around the world. “We participate actively in local exhibitions, seminars, and technology forums held by individual companies. This way helps us connect closely with local engineers and partners, by understanding their problem statement better and thus providing accurate solutions to the Vietnam market.”
Sharing the same thought, Lee said international events like ITAP are great to meet high-quality leads and create awareness. But to expand in Vietnam, participating in local exhibitions (we are exhibiting at Propak Vietnam 2022) creates more credibility as we show clients that we are serious about building up our operations and capability in the country.
“Apart from events, partnership with local companies has been an excellent avenue to increase our speed to market based on our experiences in Malaysia, Indonesia, and Thailand. For Vietnam, we are currently collaborating with Saigon High Tech Park (SHTP) and McKinsey Vietnam.” To penetrate a market effectively, getting from “Zero to One” is crucial to building up local client use cases and success stories, Lee added.
ITAP is an event of Constellar with international partner Deutsche Messe and one of Asia’s leading trade events for the manufacturing and industrial sector gathering stakeholders and targeted audience groups for networking and knowledge transfer opportunities for business success.
Launched in Singapore in 2018, it’s the first Asia Pacific edition of Hannover Messe, the world’s largest industrial fair, bringing businesses, governments, and experts together to exchange ideas and explore potential opportunities.
Addressing the ITAP 2022, Heng Swee Keat, Deputy Prime Minister and Coordinating Minister for Economic Policies of Singapore, said the event offers good opportunities for ASEAN as “connectivity is vital for manufacturing” while “the fundamentals for manufacturing in Southeast Asia are strong.”
James Boey, Senior Vice President of Markets (B2B), Constellar, said numerous organizations have used cutting-edge manufacturing technologies and innovations to restructure their operations in the aftermath of pandemics and overcome global supply chain disruptions. ITAP 2022 will continue to empower manufacturing and related industries to use Industry 4.0 for sustainable business development locally, regionally, and globally as the region’s premier trade event for Industry 4.0.
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James Boey (2nd from right), Senior Vice President of Markets (B2B), Constellar at ITAP 2022, which attracts a large number of regional reporters. Photo: Linh Pham |
