Contracts Signed When President Obama Visits Vietnam

There have been series of cooperation contracts that are signed between the AmCham (American Chamber of Commerce in Vietnam) members and Vietnam businessesafter the first day that President Barack Obama visits Vietnam.

On the trip to Vietnam of President Obama, AmCham and VCCI jointly organized the corporate event in Hanoi. At the event, the signing of agreements between member companies of AmCham and Vietnamese partners are took place.

In particular, the signing of treaties on climate change and clean energy includes 7 records:

– Memorandum of GE on the development of 1000MW of wind power: Estimated that in 2025, there will be 1,000 megawatts from wind power projects. With that capacity, wind power will be enough to supply for 1.8 million households in Vietnam over the next 10 years.

– Agreement on nuclear safety training: US will help Vietnam to train the human resources, equipped with the knowledge of nuclear procurement, design and build factories, licensing and safety checks of nuclear reactors in the future. At the same time, US experts will also advise about the effectiveness of this technology as well as economic benefits when developing.

– Memorandum of Understanding between the Vietnam Oil and Gas Group and Murph Oil Company: Murphy has participated in oil and gas exploration in Vietnam since 2012 and currently is cooperating to exploit gas in Nam Con Son. This memorandum will open up many opportunities for cooperation between the two sides in oil and gas, energy joint venture, accelerating the negotiation of the project in Tho Chu Island and many other contracts.

– Cooperation agreement of the solar energy projects between First Solar and Thien Tan: Thien Tan Investment and Construction Company have signed two major contracts to purchase solar panels worth 35 million USD to serve the solar photovoltaic plant, which has started construction since mid 2015. The plant has a capacity of 19.2 MW with total investment of 800 billion VND and is built on an area of 24 ha in Quang Ngai.

– Memorandum of Biomass Minnesota Plant: Tin Thanh Electricity Company cooperates with US businesses, negotiating the terms related to design and build of boiler biomass power. That helps saving of 10 – 20% electricity, reducing 200,000 tons of carbon each year.

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Along with other agreements such as joint researching on lower Mekong, Memorandum of Understanding on climate change in the Mekong Delta…

The signing ceremony of the future investment projects includes the Memorandum of Understanding that The Grand Ho Tram Strip develops its 2nd hotel tower; Memorandum of Traffic Safety Program.

Accordingly, The Grand Ho Tram Strip has signed a Memorandum of Understanding with the Cotec Construction Joint Stock Company (CotecCons) on the expansion of The Grand Ho Tram Strip worth 75 million USD.

The construction of the 2nd hotel tower with 559 rooms of The Grand Ho Tram Strip will be undertaken by CotecCons, bringing the total number of room of The Grand Ho Tram Strip to 1,100 rooms when completed.

After the completion of the hotel building, the actual total investment for the whole project has reached 1 billion USD.

In addition, in a memorandum on traffic safety program, the US will pour about 1 million USD to help Vietnam solving the challenges of traffic safety problems such as accidents, give helmets for citizens…

In the aviator industry, Vietjet Air (Vietnam) and Boeing (US) have signed contract worth 11.3 billion USD in the presence of President Tran Dai Quang and President Obama. With this contract, Vietjet Air will buy 100 Boeing 737 MAX 200 from Boeing.

Besides the contract signed with Boeing, Vietjet Air also signed contract with United Technologies Corp to buy engines for the aircrafts that Vietjet has signed and ordered with aircraft suppliers. The signed contracts worth up to 3.04 billion USD.

According to the executive director of the US Trade Association (AmCham), the visit of President Obama will further promote cooperation relations between the two countries in many fields; including economy, friendship between the two countries, security, human right, global and area issues of mutual interest.

The timing of the trip to Vietnam of President Obama has very important meaning because this is the time Parliament is preparing to consider ratification of the Trans-Pacific Partnership (TPP) at the end of this year.

AmCham believes that the TPP will bring many benefits and opportunities for companies, investors, workers, farmers and consumers in both the US and Vietnam. When fully deployed, the TPP will pave the way for the digital economy, strengthen the creative industries; contributing to a fair play ground for businesses and investors.

In addition, TPP will bring many important changes to the business environment in Vietnam and opens up many new opportunities, helping Vietnam to speed up in the industrialization, modernization and globalization process. This Agreement will help the private sector to have more opportunities to reach important markets, stimulating competition, attracting foreign investment and contributing to the construction of supply chain infrastructure; from that creates great opportunities for Vietnam enterprises, creating jobs and raise incomes for Vietnamese employees.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

• Market Entry
• Tax Advice
• Legal Advice
• Outsourcing Services

We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +848 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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Japanese Enterprises Want to Leave China to Enter Vietnam

The labor costs in China rose steadily, along with the territorial dispute between Beijing and Tokyo are the two factors that the Japanese business community wants to move their production to Vietnam instead of China.

Mitsui OSK Lines, the largest shipping company in Japan has decided to invest 1.2 billion USD in the project to build international container port in Hai Phong. The decision is given 3 years since the Japanese businesses gradually increase investment in Southeast Asia due to the rising labor costs in China and the territorial dispute between Beijing and Tokyo causes many complex issues to incur.

The International Container Terminal Project in Hai Phong is implemented by the Tan Cang Saigon Company, partner Molnykit (Japan) and Hai Phong International Container Port, in the form of public-private partnership (PPP) and under the guidelines the Government of Vietnam and Japan.

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Benefits of Setting up Business in Hanoi

Benefits of Setting up Business in Da Nang

Benefits of Setting up Business in Ho Chi Minh City

Assistance in Setting up Business in Vietnam

M&A Services in Vietnam

According to  the Financial Times, the terminal will start operation in 2018 and double the port’s current capacity to serve the needs of the growing electronics manufacturer industrial zones near Hanoi.

Currently, the situation that many Japanese companies close their factories in southern China and moved manufacturing operations to areas with cheaper labor costs in Vietnam.

Since the protests against Japan exploded in major cities of China in 2012, investing activities of Japanese companies in Southeast Asia surged. The foreign direct investment from Japan to ASEAN reached more than 20 billion USD in 2015, according to Government data, and exceeded total foreign direct investment in China, Hong Kong.

Results from an annual large-scale survey of Japan External Trade Organization showed that the proportion of Japanese companies want to expand production in China fell below 40% since 1998.

According to another report from Mizuho Research Institute, after surveying the opinions of more than 1,000 Japanese manufacturers, it is showed that Vietnam was the top destination among 12 countries participating in TPP Agreement for companies who want to increase their investment.

Vietnam is also one of the countries in which Japanese firms considered ideal to build the factory if they move production out of China’s territory.

Many reports estimate the total domestic product of the ASEAN countries will increase from the current rate of 2.6 trillion USD to 5.8 trillion USD in 2025. The rising labor costs in China are changing the conception of the Japanese business community on the role of ASEAN in the global supply chain. Vietnam is really an emerging heaven of electronic products. This fact will completely change the macroeconomic outlook of Vietnam.

In addition to the prospect to become the center of merchandise exports to Europe and the United States, Vietnam can also directly supply goods to the ASEAN markets in the context of mass population is about to reach 700 million people.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

• Market Entry
• Tax Advice
• Legal Advice
• Outsourcing Services

We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +848 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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Due Diligence in Choosing Business Partner

Joint ventures and association in business will bring many opportunities for the development and success, especially expanding and making entry into new Vietnam as new marketthrough cross border transaction, setting up company, acquiring shares in new company.

However, it is not easy to choose partners to help maximize the value for business, especially in this difficult time. That is the reason why we should conduct the due diligence research in Vietnam before making any decision.

According to experts, there are enterprises that growing very fast because they choose the right partners involving in the value chain, but also there are well-known enterprises in the market that have to face with a lot of difficulties due to choosing wrong partners. Therefore, how to choose the right business partners, financial partners and strategic shareholders to help enterprises overcome difficulties, develop faster and more sustainable are always issues that concerned by many business leaders.

In challenging conditions as at present, the economic situation in Vietnam and the world places great influence on the partner selection of companies. Currently, the debt crisis in some European countries caused the demand for import from these countries dropped sharply. Therefore, Vietnam enterprises must seek new markets. In this situation, companies should restructure their operations, choosing to produce products that are suitable with the new markets.

There are two key partners that companies need to keep in mind, they are financial partner and business partner. Depending on the objectives of the companies that they will choose the right partner. Normally, with the stable economic condition, companies often choose strategic partner.

However, in difficult situation such as the present, the choice of partners is made for short term so that the company could be able to change and adapt according to the general environmental condition. Many experts believe that, in difficult times, good cooperation will help enterprises to stand firm and “over storm” successfully.

Hence, conducting the due diligence research helps us to have a clearer vision of partners before deciding to cooperate with them in business, especially partners in foreign countries where you still feel strange. Whether choosing business partner or financial partner, companies should be cautious. They should learn from the Japanese companies. Before deciding to cooperate with a partner, Japanese companies often study the partners very thoroughly. Therefore, the cooperation project of Japanese companies often succeeds up to 85%.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

• Advisory
• Market Entry
• Tax Advice
• Legal Advice

We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +848 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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First Solar Re-Launch Billion Dollars Project in HCMC

First Solar Corporation – one of the US investors have set up business in Vietnam in the field of high technology.

After several years of halt operation, First Solar Corporation (USA) has officially restarted the project of manufacturing solar panel with thin-film technology in Ho Chi Minh City (HCMC).

So far, First Solar’s project (in the Dong Nam Industrial Zone, Cu Chi district, HCMC, investment capital of 1.2 billion USD) is still the only and largest scale project, producing solar panel with thin-film technology in industrial parks and processing zones in HCMC. Therefore, the dynamics of investors involved in this project attracted great attention.

First Solar’s contractor has started work for about two months. Meanwhile, the investor is coordinating with the authorities to carry out the works such as making environmental impact assessment reports, import and export procedures… After completing the necessary works, Fisrt Solar will carry out the import of equipment and machinery for factory installation to prepare for production.

It is known that First Solar’s project was granted investment certificate in January 2011 and started construction in March 2011. However, 8 months after starting construction, the investor has announced a temporary halt to the project, due to the supply-demand imbalance of solar cell products in the global market.

According to a privileged information source, on early August 2017, representatives of First Solar Corporation is expected to meet and share information on the implementation of the project with leaders of HCMC.

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Indonesian Producer Wants to Invest in Vietnam

Vietnam has become a destination for Indonesian investors to set up business in Vietnam thanks to the ever-improving investment environment and the establishment of the ASEAN Economic Community (AEC).

At the Conference named “Vietnam – Indonesia: Strengthening trade cooperation in palm oil and paper industries” that was recently held in Hanoi, the Indonesian Ambassador in Vietnam said that many Indonesian businesses are exploring business and investment opportunities in Ha Noi, Ho Chi Minh City, Da Nang and many other places in Vietnam.

Accordingly, more Indonesian investors will come to Vietnam in the coming time because Vietnam is a promising place for Indonesian investors to open their production bases thanks to AEC tariff reductions.

According to the Indonesian embassy, the Indonesian 12 largest palm oil exporters and 14 largest paper exporters are planning to expand their export markets to Vietnam and expecting to enter into joint ventures with local businesses to directly produce products in Vietnam.

In addition to calling for investment and cooperation in the palm oil and paper sectors, Vietnam has recently welcomed many Indonesian investors coming to Vietnam seeking investment opportunities and doing business successfully in the areas of animal feed, building materials, real estate…

Meanwhile, Indonesia’s capital flowing into Vietnam through mergers and acquisitions has been rising steadily, such as PT Semen Gresik – Indonesia’s largest cement company, has spent 230 million USD buying 70% of the shares in Thang Long Cement Company from Geleximco.

Indonesia’s second largest M&A deal in Vietnam is Salim Group spent 37 million USD to purchase 49% shares in Hiep Thanh Group – a trading, processing, aquaculture and export group of two agriculture strategic products that are rice and seafood.

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Foreign Investors Implement Food Projects in Vietnam

Foreign investors who are licensed to invest in the food sector in Ho Chi Minh City are in the process of implementing the project, while other projects are interested by foreign partners. It shows the excitement of investors when deciding to set up business in Vietnam.

In particular, project of Nam Duong International Food Co., Ltd with registered capital of 25.6 million USD has completed the construction of the factory, installation of equipment and machinery. The project is licensed by the end of 2015, which is a joint venture between the Saigon Co-operative Alliance (Saigon Co.op) and Wilmar International Limited (Singapore), with the capital contribution of 49% and 51% respectively. The project aims to produce sauces and spices for domestic and export markets.

Wilmar’s investment in Vietnam and cooperation with Saigon Co.op is to utilize strengths from both sides to improve the competitiveness and coverage of Nam Duong brand as well as contribute significantly to the development of the sauce and spices industry.

Meanwhile, the project of CJ Cau Tre Foods Joint Stock Company, with investment capital of 53.3 million USD, which was licensed by the end of May 2017, is being expedited by investors to implement the procedures under regulations to prepare to start construction.

This is a food processing complex on an area of 7.1 ha, including food processing plant, research and development center, modern food safety center… The 1st phase of the factory has designed capacity of 12,000 tons of products per year, which will be consumed domestically and exported to markets such as Korea, Japan, USA, EU…

The project is invested by CJ Cheiljedang Corporation (Korea) through the ownership of 71.6% stake in Cau Tre Export Processing Joint Stock Company.

We can see that, in recent times, many foreign investors have approached the market by acquiring or holding controlling shares in local companies and it is forecasted that this trend will continue.

In terms of attracting investment in the coming time, Ho Chi Minh City has many incentive policies for projects in 4 key industries, which are food processing, chemicals – rubber, mechanical and electronic – information technology. The field of food processing has received a lot of attention from many foreign investors and the fact that many large-scale investment projects have been licensed.

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Tetra Pak Construct 110 Million USD Packaging Factory in Binh Duong.

Japan-Vietnam economic cooperation will form a new value chain

Tetra Pak (Sweden) has started construction of a 110 million USD packaging factory on an area of 10,000 m2 and a total capacity of 20 billion packages per year at Vietnam – Singapore Industrial Park II – A (Binh Duong). This information has been announced since the end of 2016. The factory is expected to come into operation by the beginning of 2019.

According to the Deputy Minister of Planning and Investment, this is the factory with largest scale among 54 projects that Sweden investors have invested in Vietnam.

Moreover, he affirmed that the factory could become the leading bird, leading many Swedish businesses to come and set up business in Vietnam.

Sweden was the first country in the Western region that establish diplomatic relations with Vietnam. There will be many Swedish multinational corporations want to invest in Vietnam. Therefore, Vietnam in general and Binh Duong in particular need to prepare better investment environment to catch the wave of FDI, especially from Sweden.

According to representative of Tetra Pak, this is the company’s most green packaging factory in their system, as well as the 4th largest packaging factory in East Asia and Oceania in terms of scale.

The two popular types of packaging will be produced at the factory including Tetra Brik Aseptic and Tetra Fino Aseptic.

According to Tetra Pak, dairy and beverage products in South East Asia, Australia and New Zealand markets are expected to grow at a rate of 5.6 percent annually from now until 2019.

In Vietnam, milk production is still the largest sector in the country, which is expected to double consumption per capita to 28 liters per year by 2020. While the market for fresh fruit juice is expected to grow 17.5% in the next year. This is the basis for packaging factories – including Tetra Pak’s factory to expect fast growth in the near future.

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