IE Singapore and SBF help Singapore companies leverage Vietnam’s industrialisation plans29 Aug 2016 [Singapore] - In continued efforts to help Small and Medium Enterprises (SMEs) seize opportunities in Vietnam, International Enterprise (IE) Singapore and Singapore Business Federation (SBF) partnered the Vietnam Chamber of Commerce and Industry (VCCI) and Embassy of Vietnam in Singapore to organise the Singapore Vietnam Business Forum today. Graced by President Tran Dai Quang from the Socialist Republic of Vietnam, and Minister for Trade and Industry (Industry) S Iswaran, the Forum attracted over 250 participants from Singapore, Vietnam and the region.
The Forum is held in conjunction with President Tran’s first official state visit to Singapore since his inauguration in April 2016. Joining President Tran on this visit are Minister Nguyen Chi Dung from Vietnam’s Ministry of Planning and Investment, and Minister Tran Tuan Anh from the Ministry of Industry and Trade, as well as 48 business leaders from Vietnam.
At the Forum, President Tran delivered the keynote speech. President Tran, Minister Nguyen, Minister Tran and Dr Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry, also addressed the audience in a dialogue session, sharing the country’s latest investment climate and plans.
With economic liberalisation and political stability, Vietnam’s economy has been achieving strong and consistent growth, with GDP growing 6.7% in 2015. In the first half of 2016, Vietnam remains the fastest-growing country in ASEAN. According to the General Statistics Office (GSO) of Vietnam, it attracted US$22.76 billion worth of foreign direct investment in 2015, a year-on-year rise of 12.5%.
Vietnam’s industrialisation upgrading offers opportunities
Vietnam’s continued push for economic liberalisation through reviews of its investment and property laws has given foreign investors much confidence. The country has increased integration with global partners through various trade pacts, including agreements such as the Vietnam-European Union (Vietnam-EU) Free Trade Agreement (FTA), and the Trans-Pacific Strategic Economic Partnership (TPP). These FTAs enhance the country’s cost competitiveness and add to the country’s eco-system for manufacturing, especially for consumer electronics, apparel and food manufacturing. Its geographical location and ready pool of young, skilled labour force, also make it an attractive production hub for Singapore firms. Findings from the SBF National Business Survey 2015/16 showed that Vietnam is the second most popular market for Singapore companies venturing overseas.
To drive growth, the government has been reviewing its industrialisation plan to focus on higher value-add activities. To encourage localisation, Vietnam has put in place incentives such as preferential land use rights, tax rebates and duty exemptions particularly for exports. MNCs such as Samsung, Intel and LG have committed major investments in Vietnam. This presents opportunities for Singapore companies to establish a presence in Vietnam to plug into the supply chain of their customers.
Said Mr Tan Soon Kim, IE Singapore’s Assistant Chief Executive Officer, “Singapore is a long-term investor in Vietnam. Our companies across the infrastructure and consumer spaces have played a part in transforming the urban and consumer landscape of Vietnam. Singapore and Vietnam are member countries to various on-going trade pacts including the TPP and RCEP. As Vietnam continues to move up the global supply chain and liberalise foreign participation in public projects, Singapore companies can look forward to opportunities in manufacturing and urban solutions.”
Over the years, Singapore has played an important role in Vietnam’s industrialisation. There are a total of 10 Singapore industrial parks operated by Ascendas-Singbridge, Mapletree and Sembcorp. Together, they attracted more than US$8 billion in investments, over 600 tenants and provide employment to more than 155,000 people. These industrial parks are good landing zones for Singapore companies looking to set up in Vietnam given their experience and expertise in managing such parks. Currently, Singapore companies from food manufacturing, chemicals and precision engineering have presence in these parks.
To help open doors for Singapore companies, SBF continues to work closely with various partners, including the Vietnam Embassy in Singapore, VietCham Singapore, VCCI as well as partners in Vietnam such as the Investment Promotion Centres of various provinces.
More recently, SBF has been collaborating with the provinces of Quang Nam Da Nang, Hai Phong, Quang Ninh, Tha Thien Hue, Ha Tinh, Thanh Hoa, Lam Dong, Dac Lac and Vinh Phu to organise seminars to promote greater interest in these lesser known provinces. With support from IE Singapore, SBF also organised the annual International Business Fellowship Executive Programme on Vietnam. A Business Study Programme in real estate and manufacturing in Ho Chi Minh City is in the works.
Memorandum of Understanding (MoU) to further economic collaboration
To further trade and economic relations between Singapore and Vietnam, a Memorandum of Understanding will be signed between SBF and VCCI. The MoU will benefit businesses in both countries.
SBF and VCCI pledged to facilitate trade and investment, as well as mutual co-operation among the member companies and promote the exchange of economic and trade missions between Vietnam and Singapore, among others.
Mr SS Teo, Chairman of SBF, said, “By bringing together government and business leaders, we hope the Singapore Vietnam Business Forum will spark valuable ideas, opportunities and partnerships, deepening the bilateral relations and business ties between Vietnam and Singapore. With its robust growth, Vietnam is well poised to continue developing as one of ASEAN’s most dynamic and promising economies. We strongly encourage Singapore businesses to look to Vietnam as an attractive and compelling market for opportunities to take their business to the next level.”
Bilateral economic ties
In 2015, Singapore was the third largest foreign investor in Vietnam with registered cumulative investments of US$38.1 billion in 1,663 projects. Singapore was the top investor among the ASEAN countries, accounting for 60% of total ASEAN FDI into Vietnam. Bilateral trade between Singapore and Vietnam has grown steadily over the past decade. In 2015, bilateral trade grew 10.6% to reach S$21.6 billion. In the same year, Vietnam rose two places to rank as Singapore’s 11th largest trading partner; Singapore also rose two places to rank as Vietnam’s sixth largest trading partner.
Welcome Remarks by SBF Honorary Chairman Mr Tony Chew
Opening Remarks by Minister for Trade & Industry (Industry) Mr S Iswaran