Bright future for investment and business of European enterprises in Vietnam

Bosch has a roadmap in the next 5 years to continue its expansion plan in Vietnam. Source: Internet

Business growth in Vietnam will restart

The relationship between Vietnam and the European Union (EU) has grown stronger and stronger. Currently, the EU is the fifth-largest foreign investor in Vietnam, investing in all fields, industries and provinces and cities nationwide. However, these relationships are all facing challenges due to the impact of the Covid-19 pandemic, but with the strong participation from all levels of Vietnam, the European business community still expressed confidence in its future development.

Talking about this issue, Mr. Guru Mallikarjuna, Managing Director of Bosch Vietnam, said the impact of Covid-19 was most clearly felt at the Bosch factory in Dong Nai - one of the largest factories manufacturing variable transmission belts (CVT) globally. However, thanks to the Government's vaccination policy that prioritizes factory workers, and the support to remove difficulties for businesses from the Government, the "war" with Covid-19 was not easy, but Bosch Vietnam remained committed to its investment and business activities in Vietnam.

With the ambition of making Vietnam a leading development center of the global Bosch Group, Mr. Guru Mallikarjuna said that Bosch had a roadmap for the next five years to continue its expansion plan in Vietnam by doubling its production capacity of the Software Center along with the establishment of a new branch in Hanoi, expansion of production scale in Dong Nai and the establishment of a corporate office in Ho Chi Minh City.

Similarly, Mr. Emin Turan, General Director of Sanofi Indochina (managing two markets of Vietnam and Cambodia) also shared his intention to invest in expanding production capacity and locations in Vietnam. Besides that, Sanofi will support the energy ecosystem through a biomass energy conversion project with an investment of 1.2 million Euros.

Talking about the reasons for investing in Vietnam, Mr. Emin Turan said that Vietnam was an emerging economy, able to recover from the pandemic, with a highly qualified workforce and a favorable geographical position for trade.

According to Mr. Lionel Adenot, Country Director, Decathlon Vietnam, Vietnam was and would remain an important manufacturing country. Decathlon's business plans and production allocation suggest that business growth in Vietnam would restart strongly in 2022 and be expected to accelerate in the coming years.

Promote high-quality investment

However, in order to facilitate these plans, the CEO of Bosch Vietnam recommended that Vietnam implement policies to promote quality investment, focusing on human capital development, because a highly skilled workforce is essential for business and economic growth.

Meanwhile, General Director of Sanofi Indochina said that Vietnam needed to enhance transparency in administrative procedures, have a long-term vision and be efficient in economic development strategies.

Sharing the same opinion, a business representative of Decathlon said that it was very necessary to support the Government of Vietnam. In the short term, the first priority was to support the full vaccination of workers in all factories, creating favorable conditions for production and business activities.

In terms of production, Vietnam needs to speed up the localization of input activities of the value chain, which are yarns, raw materials. European businesses want support to encourage manufacturing enterprises to carry out automated and digitized transformation in order to achieve higher productivity and efficiency. Regarding sustainable development, businesses from the EU hope to have support for the use of biomass raw materials, increasing the replacement of coal which is still used a lot in dyeing or tanning processes.

In terms of logistics activities, Mr. Lionel Adenot placed his expectation on the development of rail transport, an intermediary solution to replace sea and air transport. In the field of customs, he expressed his expectation for a more synchronized digitalized system and reduced overlapping regulations and processes.

To develop tourism, Mr. William Haandrikman, General Director of Sofitel Legend Metropole Hanoi Hotel, Regional General Director of Accor North Vietnam, said that Vietnam was currently in the middle of a "crossroads" to choose a way to go and it will determine the success or failure in the recovery of the tourism industry. Therefore, he recommends preparing technological solutions such as the application of IATA (Electronic Health Passport) that allows mutual recognition.

Also on this issue, Mr. Giorgio Aliberti, Ambassador, Head of the Delegation of the European Union to Vietnam, said that 35% of European businesses in Vietnam considered administrative procedures a barrier when implementing the EVFTA. Therefore, in order to attract FDI from European Union to Vietnam, Vietnam needed to amend regulations on investment attraction. Vietnam needed to be a modern industrialized economy, legal institutions suitable for market economy institutions, creating a level playing field for businesses.