[Business Briefing, 3 April 2015] Dezan Shira and Associates’ Business Briefing is reporting that the recent P&G Investment Signals Increasing Foreign Investor Interest in Vietnam. Below is an edited extract of the article. The article by Edward Barbour-Lacey was published on on 3 April 2015.
As Vietnam’s economy continues to prosper, the country is becoming increasingly attractive to foreign investors. Many of these businesses choose to form their own wholly owned company in Vietnam, however, there has also been a growing interest in pursuing the M&A track as a method of investing into the country. The possible raising of foreign ownership caps and the improving business environment, driven by government reform, have further motivated foreign investors to consider Vietnam for their business operations.
Just this week, Procter & Gamble (P&G) broke ground on a new US$100 million factory in Vietnam’s Binh Duong province at the Vietnam Singapore Industrial Park II. The factory will focus on manufacturing razor blades for the company’s Gillette brand. This new factory will take P&G’s total investment in Vietnam up to US$360 million.
P&G is but one of many multi-national companies that have significant investments in Vietnam. Currently Samsung is the largest investor in Vietnam, with US$33 billion in total capital, but there are also many other companies, such as Hanes, Exxon Mobil, Intel, Nokia, as well as a range of smaller sized companies.
Vietnam is attractive to foreign investors for a number of reasons; these include:
- The country’s young, skilled, and low cost workforce
- Political stability in a turbulent region
- Vietnam is also strategically located to serve as a manufacturing hub in the ASEAN region and beyond
- Vietnam’s fast growing local consumer market is also an increasingly attractive market for foreign companies’ goods.
Speaking of the construction of the company’s new factory, Hatsunori Kiriyama, P&G’s president for Asia, stated “Throughout these years, we have remained steadfast in our commitment to be a model investor and an exemplary corporate citizen in Vietnam…P&G continues to be optimistic about the country’s long-term outlook and strongly believes in the potential growth of Vietnam.”