Reed Tradex Ready with Vietnam Industrialists to Catch New Investment Wave
According to the World Investment Report 2016, FDI inflows to Vietnam have increased considerably, and are expected to continue in growth, confirming the country’s position as the third most attractive country in terms of FDI in Asia, just behind China and India. Vietnam Business Forum conducts a special interview with Ms. Kasinee Phantteeranurak, Project Manager of Reed Tradex Co., Ltd, the leading ASEAN exhibition organizer, about the company’s strategy to support industrialists in Vietnam to catch the new investment wave.
Can you review the results of exhibitions organized by Reed Tradex in Vietnam recently?
2016 has closed with the great success of celebration 10th year anniversary of Reed Tradex in Vietnam. We have delivered over 30,000 quality visitors, covered 2 economic hubs of Vietnam which are Hanoi and Ho Chi Minh City. One of the key success points which make exhibitors to confidently continue participating in our exhibitions is not only the specialized content, but also the good preparation, comprehensive marketing plan to deliver the right targeted partners to all the participants.
In many ways, Vietnam is the emerging market in Asian region with high investment potentials. According to the World Investment Report 2016, FDI inflows to Vietnam have increased considerably, and are expected to continue in growth, confirming the country’s position as the third most attractive country in terms of FDI in Asia, just behind China and India. In the past, FDI flows were directed towards light industry, but they are now quickly turning towards heavy industry, real estate, franchise and tourism. With the positive effects from FDI, Vietnam now produces high value-added products such as smart phones and tablets.
Vietnam is a country of changes and currently offering increasing opportunities for foreign businesses. According to Thanh Nien News, the Government of Vietnam is also aware of ensuring a win-win solution for both investors and the government to extensive integration into regional and global economy. During the 2000- 2013 period, the number of state-owned enterprises fell by almost 50 percent from 5,800 to 3,135. Privatization was reported to be successful: 40 percent had growth of over 10 percent following privatization. These successes drive foreign investors in their investment in these very potential areas.
It is now exactly time for foreign investors to start their business plans and grasp the upcoming clear opportunities.
Can you point out opportunities that Vietnam needs to grasp, and also challenges which should be viewed objectively to have good preparation to integrate into the world economy?
Between January and September 2015, Vietnam recorded US$17.15 billion worth of FDI for a total of 461 projects. Vietnam has becoming a new destination which attracts large technology, industrial and HR projects, in which some biggest high-tech investors come from Japan and Korea. Definitive more extensive migration of Japanese and South Korean businesses to their number one investment destination: Vietnam. The manufacturing sector attracts the most FDI. At present, most of Vietnam’s products are produced with backward technologies; it is also current challenge for Vietnam to fulfill the lack of supply chain networks to these high-tech FDI’s.
According to the Prime Minister’s Decision 1168/QD-TTg dated July 16, Vietnam targets the production of 227,000 automobiles and aims to be a supplier of spare parts and high-value items for the world automobile market by 2020. However, regardless of the AFTA agreement that ASEAN auto imports will be exempted from import tariffs entirely from 2018. It will be a challenge for Vietnamese car production if it does not create comparative advantage in terms of neither quality nor price.
Evenly, a car assembled in Vietnam is more expensive than the same one in the US due to only there is a small number domestic manufactures investing seriously in production to improve their competitive abilities, while the most ones operate at simple assembling level. Today, the ratio of the number of car per habitant in Vietnam is still around 1%. There are challenges but also opportunities for Vietnam’s automotive industry in a long way to become a mass market. Therefore, to improve competitive ability, all of local companies need to have specific development plan to win in the home market.
Today, Vietnam’s economy faces complex challenges that require a transition to a productivity-driven growth trajectory. According to McKinsey Global Institute, Vietnam needs to boost its overall labor productivity growth by more than 50 percent, from 4.1 percent annually to 6.4 percent, if the economy is to meet the government’s target of 7 to 8 percent annual growth by 2020. More than ever, a long-term infrastructure development is recommended to be set up, in which to be focused investor needs and addressing shortages of skilled workers through the training program and the introduction of common standards for all the workers to upgrade themselves.
As exhibition organizer, how does Reed Tradex engage to support the industrialists and manufacturers in Vietnam to catch up new business opportunities?
In recent years, Vietnam has transformed itself from subcontracting and assembly to be the industry of processing and manufacturing, the integration pressure on industrial products will get higher in near future. Vietnam’s science and technology development strategy until 2020 requests a 15-20 percent of technological improvement a year. It means that after five years, a new generation of technology must replace the old one. But the good news is, on the other hands, innovation means not only replacing old machines with new ones but also changing a management system as well as developing high-quality human resources, which remains uncompetitive level in Vietnam.
One of the solutions is to strengthen cooperation between scientists and businesses as well as promote international cooperation in the fields of science and technology in order to keep up with the world. Setting our role as a business promoter, especially in manufacturing industry, we do believe that not about using the most modern technology, but the right technology will help Vietnam to narrow the gap with hi-tech world’s demand. The world is changing; the game “big fish eat little fish” is not going well anymore, replaced by “fast fish eat slow fish”.
Recognizing the opportunities and development paths from existing challenges, in 2017, we will focus on developing the exhibition program to be more competitive, not only demonstrate the machineries, but also coordinate with organizations and experts in the industry, also the businesses who are holding the technology to implement the transmission of knowledge resources, technology transfer and exchange of the ability to apply technology and machinery practically, with highest financial efficiency for the manufacturers in Vietnam.
We also aim to create our exhibition to become “one platform, one station” where is the center of industrialist community. The community is not only in the scope of domestic where all manufacturers can exchange and connect to be able win at local market, but also the crossing participant of international communities such as Japan, South Korea, Europe, etc. to gain more advantage and get in lane quickly with global standard.
Forthcoming international exhibition “Vietnam Manufacturing Expo 2017” for mold & die making and injection technologies for plastics manufacturing will be opened up in Hanoi from 26 – 28 April, 2017 at Hanoi International Center for Exhibition (I.C.E., Hanoi). During the 3 days of the exhibition, we will open widely to welcome the entire local and foreign industrialists, and also comes along with business match making program in which the participants no need to be charged any fee, it’s in term of the concept to deliver the highest opportunity between investors and manufacturers/ suppliers. The seminar program has been planned, with rich content provides knowledge management for top levels in the organization, and also the technical knowledge and experience sharing, production solutions for the research department and manufacturing department.
“Vietnam Manufacturing Expo 2017” will also be the answer toward the increasing needs of market about product’s precision. Metrology and assembly automation are two in-trend profiles which will be focused, as we know if it is applied appropriately, it can help the production line being more efficient, with higher accuracy to minimize production costs, as well as to meet the needs of high-tech investors. At “Vietnam Manufacturing Expo 2017”, it’s not only the presence of the leading brands in metrology and assembly automation, but also experts in the industry, always be ready to share technical experience and technology’s knowledge to the entire visitor. More information at: /go?url=aHR0cDovL3d3dy52aWV0bmFtbWFudWZhY3R1cmluZ2V4cG8uY29t