Vietnam News in Brief: Week Ending February 24
Each week, the team at Vietnam Briefing summarizes the top business news stories from around Vietnam. Here’s what happened this week.
Thailand’s Central Retail plans to invest US$1.4 billion expanding its operations in Vietnam
This is a substantial investment that is expected to be delivered over the next five years. The Thai group joins a range of other big regional players making inroads in Vietnam. Uniqlo and Aeon Group have both announced expansion plans in Vietnam in the past year. The International Finance Corporation is also toying with investing US$20 million dollars in GS25 retail group, which operates a chain of convenience stores in Vietnam. Vietnam’s retail sector, according to the big regional players, is on an upswing.
Real Estate News
US$30 billion worth of real estate projects are now on hold
Vietnam’s real estate sector has been struggling for some time now and the impact is being felt across the board. Aside from the US$30 billion of projects on hold, the Vietnam Real Estate Association is estimating that 80 percent of real estate agents are now out of work and 1,200 developers have gone bankrupt.
Problems in the real estate sector have been ongoing for months and there are a lot of opinions out there about what or who is to blame—corruption, over leveraging, credit limits to name just a few. In reality, it’s probably a combination of all three with a few other bits and pieces thrown in.
Root causes aside, The Leader this week ran an article countering assumptions that the current financial turmoil would lead to increased mergers and acquisitions. Phan Xuan Can, Chairman of SohoVietnam, told the digital publication that buyers were still around but that they were taking a wait-and-see approach.
More staff layoffs in manufacturing
Taiwan’s Pou Chen, a key Nike supplier based in Dong Nai, has announced layoffs to the tune of 6,000 staff or more than a third of the 16,040 employees that were working for the company in Vietnam as of November 2022. This is on the back of weaker demand for garments and textiles as consumer spending plummets amid rising global inflation.
Solar components manufacturer Growatt has opened a plant in Hai Phong
After a string of commitments to reduce its carbon emissions, Vietnam has seen a boom in renewable energy and subsequently its supporting industries. This new Growatt factory could be a result of this new pro-renewables paradigm
Alternatively, it may be that antidumping and countervailing duties (AD/CVD) applied on solar imports from China to the US, and subsequent AD/CVDs on at least one Vietnamese solar enterprise allegedly circumventing the original ADs and CVDs, may have pushed the Chinese manufacturer south of the border.
Israeli and Vietnamese shipping firms announce partnership
Israel doesn’t have a lot of FDI projects in Vietnam—there was just one last year—but Israeli firms are finding markets for their technology and know-how in the country. This latest deal between Israel’s ZIM and Vietnam’s Hai An Transport is one more following along Vietnam’s TH Milk and Vinfast, which both work with Israeli tech firms: TH Milk, utilizing Israeli dairy technology and Vinfast, utilizing Israeli fast charging technology.
Singapore Clean Energy Fund to invest in Vietnam EV charging stations
Singapore-based Southeast Asia Clean Energy Facility (SEACEF) will invest in Vietnam’s EBOOST, which is developing an electric vehicle (EV) charging network in Vietnam. This should boost Vietnam’s transition to clean transportation and is a step in the right direction to reaching its COP26 commitment to reach net-zero emissions by 2050.
Vietnam financial services provider eyes funding from Vietnam Oman Investment fund
Deal Street Asia is reporting that the Vietnam Oman Investment (VOI) fund is considering investing up to US$30 million in Vietnam’s F88, which offers a range of financial products and services. This comes on the back of booming interest in financial services in Vietnam. Most notably, fintech startups have attracted hundreds of millions of dollars in foreign funding over the last decade.
Danish company could soon be making wind turbines in Vietnam
Reuters is reporting that Danish turbine maker Vestas is considering investing in manufacturing facilities in Vietnam citing three unnamed sources. Vestas is currently producing blades and generators for wind turbines in China. The Danish firm did not respond to a request for comment from Reuters but the Danish Energy Agency’s Erik Kjaer, was quoted as saying that it would ‘make sense’ given Vietnam’s huge steel production capabilities.
About the Vietnam News in Brief
The Vietnam News in Brief is compiled weekly and covers a broad range of topics and issues relating to doing business in Vietnam and the country’s economic development. For a more detailed understanding of Vietnam’s current business climate, contact the experts at Dezan Shira and Associates.
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