Socialist Republic of Vietnam

As the country’s top foreign investors, the Taiwanese and Koreans said they continued to choose Vietnam as their favorite destination for investment because of its low labor costs and links to other countries.

In the first nine months of this year, Taiwan was the largest foreign investor in Vietnam, followed by Korea, according to the Vietnamese Ministry of Planning and Investment.

Korean investors said they were attracted to a U.S.-Vietnam bilateral trade pact, which provided a channel for Korean-backed exports to the U.S., as well as Vietnam's entrepreneurial spirit.

Since the implementation of a bilateral trade agreement with the U.S. at the end of 2001, Vietnam's economic development has enjoyed a period of expansion, making major advances into the U.S. market, said Korean investors.

Korean investors also said that Vietnam was a bridge to other countries in the Association of Southeast Asian Nations.

"We expect Vietnam to remain a key export base, which will help us keep up our competitiveness for the time being," said Lim Chul-ho, in charge of the Korean Hansea Co. garment factory in Ho Chi Minh City’s outlying district of Cu Chi.

Hansea is currently filling orders for knits that will be sold in the U.S. and European Union. Vietnam is one of the company's largest production bases, employing 4,500 workers. The factory’s export revenue for this year is expected to reach 85 million USD, which is more than double last year's figure, according to company officials.

Leading Taiwanese and Korean companies also said Vietnam would become a potential paradise for foreign investment, thanks to its low labor costs, steady politics and protective policies for foreign investors.

According to Korean investors, factory sites in Vietnam are as much as 10 times cheaper than in Korea, and the average monthly wage of a Vietnamese worker is around 70 USD, compared to 100 USD in China.

Taiwanese electronic manufacturers Teco Electronic & Machinery Co. and Tatung Co. both announced plans to further invest in Vietnam.

Teco recently announced its intentions to cooperate with a Vietnamese firm to jointly set up a motor parts plant in Vietnam, while Tatung said it would likely become the first among Taiwanese home appliance makers to launch investment in Vietnam, according to the Taiwanese e-Government Web site.

Two years ago, Wooree Lighting Co., a Korean lamp manufacturer, began producing 40 per cent of its products in HCMC. But, the company expects Vietnam to become the company's sole production base in the next two years, with 60 per cent of its lamps manufactured at the HCMC factory, said Kang Sung-hyun of Wooree's investor relations staff.

As Korean factories head to Vietnam for its low production costs, Korean banks have also joined the stampede.

The Korea Exchange Bank recently opened a representative office in HCMC, followed by Woori Bank, which also had branch offices in Hanoi.

Chohung-Vina Bank in HCMC is a Korean-Vietnamese joint venture where outstanding corporate lending has grown to 73 million USD, up from 40 million USD two years ago.

"The recent influx of Korean companies to Vietnam will bring abundant business opportunities to us," said Kang Shin-sung, the former head of Chohung-Vina Bank.

Last year, nearly 700 Korean companies operating in Vietnam were estimated to earn 2.3 billion USD in export revenues, accounting for 11.6 per cent of the total exports in Vietnam.

(Source: The Korea Herald & Taiwanese e-Government Web site - Compiled by Thanh Hang)
Story from Thanh Nien News
Published: 27 October, 2004, 16:16:46 (GMT+7)
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