Vietnamese enterprises expanding into international markets

Many Vietnamese enterprises are dramatically expanding into international markets. Hoang Anh Gia Lai Group signed a memorandum of understanding with the Lao government for four large projects at the conference on Vietnam-Laos investment cooperation that was held in Vientiane on 10 September.
The firm has become one of the most successful investors in this neighbouring country with the total investment capital of US$1 billion in such areas as rubber, sugar cane, mining and hydropower industries.

This market also saw the owner of the private aviation corporation Air Mekong, BIM Group’s recent launching of the five-star hotel, shopping centre, high-class apartment complex project with the total investment capital of US $70 million, which is expected to be operational in late 2012.

Likewise, Unitel, a nearly two-year-old joint venture between Viettel and Lao Asia Telecom now ranks the first in terms of customer subscription and infrastructure, which makes Viettel Corporation one of the most outstanding players in Laos.

The period from 1993 till August 2011 has witnessed more than 420 Vietnam’s projects with the investment capital totalling US $3.57 billion in this market. The most popular local destinations among Vietnamese firms are Vientiane with nearly US $1.9 billion and Champaxac with US $248 million.

Another neighbouring country, Campuchia, also emerges as an attractive destination for Vietnam brand names.

Despite diverse difficulties due to global economic crisis, FPT Corporation has been persistent in its global telecommunications strategy over the last three years with these two first initial international markets.

In the first phase, FPT builds up backbone lines to the borders, from which it provides connection capacity to operators in Laos and Cambodia. “FPT has created a “revolution” in the broadband market in Cambodia over the last three years, prior to which time 1 Mbps in Cambodia was priced at US $1000, while the figure has now dropped to below US $300″, said a representative of FPT. Currently, FPT is taking the next step in the strategy – acquisition of existing networks in Cambodia to provide services in the market.

Previously, Viettel with the Metfone network was the most successful telecommunication investor in Campuchia in terms of mobile services, infrastructure as well as market share.

Apart from these two neighbouring nations, FPT and Viettel are both heading for the most faraway and disadvantaged markets in Africa and America. Recently, FPT and Nigerian 21st Century Company signed a memorandum of understanding (MOU) for strategic cooperation in telecommunications, education and equipment production.

FPT also reveal intention to seek opportunities in broadband and digital content services along with providing consultancy, developing infrastructure and offering service for the Nigerian counterpart.

In the meantime, Viettel has recently been granted license for telecommunications investment in Mozambique, another African country. Also, a new network has just been launched in Haiti (America) where was previously hit by an earthquake with more than 300,000 casualties one year ago.

The joint venture was then the operator of largest comprehensive telecom network and nearly 1,000 base transmission stations, a 30 percent upsurge compared with the previous 6 year-old network Digicel.

Clarifying the reasons for penetration into such disadvantaged markets, both investors attributed it to the lack of “easily accessible markets”. It is stagnant domestic market that has provoked outward investment for business expansion.

“Challenges offer opportunities which we would like to grab. Few investors choose Haiti as an investment destination in the wake of the earthquake. Yet, our commitment of further investment has been well received by the residents as well as local authorities and counterparts, which in turn greatly facilitated our infrastructure construction”, shared Viettel’s representative. Also, Haiti’s low telephone line over person amid weak supply offers golden opportunity for overseas investors, added he.

According the Foreign Investment Department under the Ministry of Planning and Investment, Vietnamese firms’ outward investment has made promising improvements over years. Some 600 foreign investment projects are reportedly effective with the registered capital totalling more than US $10 billion and implemented capital reaching US$2 billion.

Some corporations such as Hoang Anh Gia Lai Corporation, Viettel and Vietnam National Oil and Gas Group are now considering further expansion following initial success.

They are drastically seeking for new markets even in disadvantaged areas whereas others are narrowing down business for safety reasons in the event of gloomy economic climate. They believe that such adversity would turn into opportunities if appropriately taken advantage of, yet the utilisation would take time for ultimate results.

Tags: Vietnamese enterprises