Investment in Vietnam - Long-Term Option of Investors

Trends and M&A prospects in Vietnam


Investment in Vietnam - With the advantage of strategic geographical location, young population, rich natural resources, stable political system, international economic integration án so on. Vietnam is currently the most attractive investment destination among the emerging markets, overtaking China, Thailand, Malaysia - The Director of the Center for Investment Promotion for Industry and Trade, Trade Promotion Agency Tran Kim Oanh said.
In 2017, foreign direct investment (FDI) in Vietnam reached over US$ 33 billion, up 55.5 % over last year. There are 126 countries and territories with projects in 18 areas in Vietnam, worth over US$ 33 billion, of which manufacturing and processing industries continue to attract the most foreign investors.

Commenting on the trend and prospects for M&A in Vietnam, Mr. Seck Yee Chung, representative of Baker & McKenzie Law Firm, said that "Many foreign investors are choosing to invest in listed enterprises and have long-term vision to realize investment objectives in Vietnam.”

In particular, Asian investors such as Japan, Korea and Thailand are investing in many different fields such as consumer goods, financial services, distribution, retails, construction materials production, chemistry, etc.

However, the region assessed to have many large investors as North America and Europe have not had many deals yet, mainly some big deals in the field of oil and gas and consumer goods.

Over the past few years, the M&A market in Vietnam has witnessed many mergers and acquisitions in the retail and consumer goods, real estate, industry ... with foreign elements such as SCG Group and Public Vietnam Construction Materials, CJ Group and Cau Tre Company, Deasang Company and Duc Viet Food Company.
Especially, the latest one, afternoon 18 December, ThaiBev company asked Vietnam Beverge to purchase 343.66 million Sabeco shares, equivalent to 53.59% of charter capital.

The opportunity to breakthrough

Ms.Tran Kim Oanh, Director of the Industry and Trade Investment Promotion Centre said that "Vietnam is the second largest rice exporter in the world. Besides, tea, cashew and seafood also emerged as key export goods of  the country. However, raw material exports account for the bulk.

The food processing industry has an annual domestic consumption of US$ 30 billion and is forecast to grow steadily more than 18% a year between 2014 and 2019. With a population of more than 93 million people, there is a tendency to change the mode of consumption in the food processing industry, which opens up a great opportunity for the attention of foreign investors in the form of M&A.

In addition, the government has approved the Electricity Plan in 2020 that will put into operation an additional 5,000 MW per year, build more power projects, develop new and renewable forms of energy such as wind and solar in the coming period of 2025.
Textile and garment sector gained turnover of US$ 30 billion, an increase of 14.5% / year, especially footwear export of over US$ 10 billion, up by 9%/year. These are also considered as potential industrial sectors that attract investment through M&A.

According to the General Statistics Office, Vietnam's industrial production in general in the first 11 months of 2017 increased 9.3% over the same period last year.

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