(VOVWORLD) - Thailand has become Vietnam’s biggest trading partner in ASEAN and the 9th-largest foreign investor in Vietnam, with more than 600 projects worth 13 billion USD as of this June. Trade between the two countries reached 5 billion USD in the first quarter of this year, with plans to boost it to 25 billion USD by 2025. Vietnam has been a hotspot for Thai investors for over a decade. In this week’s Business, we’ll look at the reasons why Thai companies are interested in the Vietnamese market.
 Amata Bien Hoa Industrial Park in Dong Nai is rated among the most dynamic economic zones in Vietnam. (Photo: vietnamnet.vn) |
All the top Thai conglomerates have already set up operations in Vietnam, with more investment to come, said Piyapong Jriyasetapong, chairman of the Thai Chamber of Commerce and Industry in Vietnam.
He attributed the rise to the growing income and spending of a young population, Vietnam’s close proximity to Thailand, which makes travel fast and easy, low production costs, abundant raw materials, and free trade agreements that support exports. Another important factor is that Vietnam is entering a golden decade.
Thai businesses are investing mainly in feed, farming, renewable energy, packaging, retail, distribution, petrochemicals, foodstuff processing, plastic products, and energy drinks.
B.Grimm Power Public Company Limited, Thailand's oldest industrial and healthcare company, has been doing business in Vietnam for over 20 years and has invested more than 700 million USD.
 Mr Harald Link (L) receives the 'Certificate of Merit' award from Phan Chi Thanh, Vietnam's Ambassador to Thailand, in recognition of the B.Grimm’s support in medicines and medical equipment to help relieve the impact of COVID-19 in Vietnam. (Photo: Ngoc Diep/VOV Bangkok)
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Harald Link, Chairman of B.Grimm Power, said that the company is currently building solar farms and distribution networks in industrial parks in Vietnam and plans to invest in more industrial parks, which all belong to Amata, a great Thai investor in Vietnam.
"We invest in solar farms and build the largest in Southeast Asia and south Vietnam. And we are building wind farms now and we are waiting for the eighth development plan to come out so that we can build more, because we have many more projects, we are really good in all renewable power projects, also in hydro and in gas-fired power projects,” according to Harald Link.
Thailand’s Krungthai Asset Management Company (KTAM) says it has started to see signs of economic recovery in countries with high-growth potential, including Vietnam and India, which have become increasingly attractive for investment.
 (Photo: bot.or.th) |
Vietnam has also become more attractive because of its comparatively low inflation. That means there will be more local consumption which will drive economic growth, said Yot Kimsawadet of the Thai Bankers’ Association.
He added last March Vietnam and Thailand launched QR payment services as an alternative means of cross-border payments between the two countries.
"QR codes will allow Vietnamese people and Thai people to buy things more easily, without carrying cash, which you might lose. Digital payment allows you to pay for coffee, Cokes, or anything with QR," according to Yot Kimsawadet.
He added, "In the near future, when Vietnamese tourists come to Thailand and want to buy something, they can use their mobile phone to scan the Thai QR. And vice versa. When we go to Vietnam, we don't have to carry cash anymore. We can use a mobile app to pay. With mobile banking, you pay in your own currency and the foreign exchange rate your Vietnam bank charges you is probably minimal. The Bank of Vietnam or the Bank of Thailand can control the Foreign Exchange.”
 Wishjanond Vichaiyuth, Director of Khonkaen International Convention&Exhibition Center (KICE) |
Vietnam is accelerating the equitization of its state-owned enterprises (SOEs), offering great opportunities for Thai and other foreign investors to gain a big presence in Vietnam, which still has a lot of room for growth this decade.
Wishjanond Vichaiyuth, Director of the CP Land Public Company Limited, one of Thailand’s leading real estate developers, said that CP Land is offering property solutions in Thailand and wants to invest in property in Vietnam as well.
"We are working in the private sector under the name CP Land. We can cooperate with the trade border together in property if we have a chance to get into Vietnam. I think Vietnam is a good country and Vietnam provides something we can invest in like we are doing in Thailand right now,” said Wishjanond Vichaiyuth.
The Vietnamese government’s administrative reforms to facilitate enterprises and individual investors have been acknowledged by Thai investors, who say they hope to hear more talks with businesses and action plans to solve current issues, which will surely attract more funding.