The French size-up unvestment potential

Second place among EU countries investing in Vietnam

The Foreign Investment Department of the Ministry of Planning and Investment has statistics that show that in the first seven months of this year, seven French projects were licensed, total investment capital being US$58.6 million. Also during this time, two French projects asked for permission to increase investment capital by a combined US$1.32 million. From 1998 to the end of this July, there have been 183 French projects in Vietnam with US$2.2 billion in registered capital, of which more than US$1.1 billion had actually been invested. That's 50 percent, compared with the 40 percent average for all FDI projects in Vietnam since 1998. This put France in seventh place among 79 countries and territories investing in Vietnam and second place among EU countries, just behind the Netherlands.

Most of the French investment projects have been in services and industry. Of these, 71 with US$1.1 billion in registered capital were in services. This is 40 percent of all the French projects and 25 percent of the investment capital. There have been 81 French industrial projects with US$830 million in registered capital. That's 45 percent of all of the French projects and 39 percent of the investment capital. Other projects have been in agriculture, forestry and fisheries.

The Foreign Investment Department said that French projects in Vietnam have been fairly successful. French companies and brands have done quite well such have been France Telecom (telecommunications), Sanofi-Synthelabo and Aventis (medicine) and Bourbon (supermarket business and agriculture).

Apart from FDI projects, France has led the EU in terms of increases in amount of official development assistance (ODA) capital being offered to Vietnam each year. France has thus far provided Vietnam with more than 1.2 billion euro to launch over 210 ODA projects.

Ready for a new phase of investment in Vietnam

At the Vietnam-France Trade Forum held in Hanoi this last March, the then French Ambassador to Vietnam, Jean Francois Blarel, said that he believed that France would again become the biggest EU investor in Vietnam. Recently a group representing about 20 French businesses, including the Accor Group, Lafarge, L'Oreal, Alstom, Natixis, the Orange-FT Group, Renault, Total and Vinci visited Vietnam to size-up potential future investment in the country. Frederic Sanchez, who led the business group and is president of the Vietnam Sub-division of the Movement of the French Enterprises (MEDEF), said that French companies are getting ready for a new phase of investment in Vietnam and that it will likely focus on new areas such as automobiles and cosmetics after past success in transportation and construction.

During the visit, the French business people met with Prime Minister Nguyen Tan Dung, people in the Ministries of Planning and Investment, Trade and Industry, Transport, and Construction, and Hanoi and Ho Chi Minh City authorities to obtain a broader vision for future investment plans.

While here, French companies spoke of potential investments. On the first day of the visit, the Orange-FT Group showed a willingness to invest in large Vietnamese telecommunications companies and corporations that are being equitized (being transformed from State-owned to joint stock companies). French transportation groups looked into the opportunity to participate in possible metro construction in Hanoi. Sanchez said that the equitization of the largest State-owned enterprises has only begun and that investment opportunities will be plentiful, explaining why these French enterprises were here. They don't want to miss any good opportunities.

The visiting French business people highly spoke of the investment environment in Vietnam, the new laws and the implementation of Vietnam's post-WTO commitments. However, they said that if the country is to be competitive, the investment environment in the country needs deep improvement. "The pace of decision making here is too slow. This is hindering development in Vietnam. Too many planners want to be decision-makers. I've led groups of French business people to Vietnam three times and way back four and five years ago we made proposals to invest in projects. In all this time the Vietnamese government has not been able to make a decision on even one of them. The decision makers here are going to have to go a little faster if they want to get the interest of serious investors," said Sanchez.

Source: Vneconomy