Malaysia: Potential Partner of Vietnam

Malaysia is regarded as an important partner in the strategy to attract foreign investment to Vietnam. Ever since Vietnam started the policy of openness and economic integration, Malaysian businesses have boosted investment and business activity in Vietnam. Although the investment was partly affected by the regional financial crisis, in 2000 Malaysia returned with remarkable success.

 

In the initial stage, Malaysia ranked 11^th among countries and territories investing in Vietnam, with 75 projects and VND1,004 billion investment capital. Presently, it ranks 2^nd in the region and 12^th among 64 countries and territories with investment capital of US$1.4 billion. Each year, at least five new Malaysian businesses seek business opportunities and expand into the Vietnam market with diversified industries.

 

Malaysia invests in heavy industry (nearly 30%), light industry, agriculture, forestry, hotels, construction, gas and oil, etc. While Vietnam sends some 70,000 guest workers to Malaysia.

 

In the first half of 2007, several Vietnam-Malaysia business forums were organized in Ho Chi Minh City and Kuala Lumpur, attracting hundreds of businesses from the two countries. Smaller seminars were organized in Kuala Lumpur introducing the business and investment environment in Vietnam. Malaysian business delegations of different industries (finance, IT, rubber, etc.) visited Vietnam for market surveys and trade fairs. It is safe to say that Malaysian businesses and investors have a special interest in the Vietnamese market. As a matter of fact, in recent years trade value has increased some 20% per annum.

 

Malaysian businesses are especially successful in the retail sales market. To meet the demand and taste of Vietnamese customers, many Malaysian groups have come to Vietnam such as Aseambankers and Lion. Lion itself owns 40 high-class shopping centres around the world. In addition to shopping centres in Haiphong, Vung Tau, Nha Trang and Can Tho, the group has opened the third Parkson Hung Vuong Plaza in Vietnam with US$6 million investment capital and floor area of 24,000 sq. metres. Parkson plazas target high-income customers. Parkson Hung Vuong focuses on famous fashion designers and cosmetics, and newly imported home appliances, children’s toys, restaurants and recreation centres. The group also distributes reasonably priced commodities to the general population.

 

Reviewing business activities in Vietnam, Mr Tuck Choy, Parkson Director General, said Vietnam is the highest growth market that Lion Group has invested in recently. The growth rate in Vietnam is 34% a year and will be higher, while in other countries it is only 15-20%.

 

Vietnam is currently one of the biggest natural rubber producers in the world, ranking 4^th in export after Thailand, Indonesia and Malaysia. Vietnamese rubber output increased from 220,000 tonnes in 1996 to 560,000 tonnes in 2006. Malaysia ranks third in rubber area and output, but has better processing industries. Therefore, Vietnam can supply rubber materials to Malaysia.

 

Recently, a delegation of Malaysian officials and businesses visited Vietnam to seek cooperation in rubber production, processing and export. At the business meeting, Malaysian rubber enterprises (MRE) drafted business principles. The delegation also visited and approved business cooperation with Dau Tieng Rubber Company.

 

From now on, Vietnam Rubber Association can continue stable growth with favourable cooperation between the rubber industries of the two countries. During the visit, Mr Michael Dosim Lunjew, on behalf of the delegation, said that in spite of difficulties Vietnamese and Malaysian businesses are confident of successful cooperation. In the future, with successful programmes, Vietnam’s rubber industry can reach the target of one million tonnes of rubber in 2015 and 200,000 hectares of rubber in Laos and Cambodia.