|Under the expansion plan, FPT Corporation, one of the leaders in the local technology sector, sets up an office in Yangon, Myanmar in 2015. — Photo FPT
HA NOI (VNS) — Many Vietnamese businesses have recently had considerable success in investing in foreign countries after years of attempts.
The military-run Telecommunications Group (Viettel) recently released its financial report, showing total revenue of nearly VND223 trillion (US$9.99 billion) in 2015, of which about $1.5 billion came from its business in foreign markets.
In the same year, Viettel expanded its business in Tanzania and Burundi, bringing its total operational market to 10 countries, including the United States and countries in Asia and Africa, supplying services to some 75 million customers.
Telecom firm FPT Corporation (FPT), one of the first Vietnamese enterprises to develop its business abroad in the technology sector, told VnExpress.net it had made several special achievements in new markets such as Myanmar and Bangladesh in 2015.
In Myanmar, FPT was the first 100 per cent foreign-owned firm to secure a licence to provide fixed telecom and Internet services in the country. Myanmar's communications and technology ministry granted FPT a 15-year licence, which would also allow the firm to provide online games, e-news, websites and e-commerce services, FPT said in a statement.
In 2015, FPT earned nearly VND4.9 trillion ($219.4 million) in revenue and VND674 billion ($30.2 million) in pre-tax profit from its business in foreign markets, marking a year-on-year increase of 41 per cent and 17 per cent compared with 2014, respectively.
With a target of $1 billion in revenue from foreign markets by 2020, FPT aims to increase both the capacity and quality of its services. The company will apply all-in or fixed-price contracts instead of the current periodic contracts.
In addition, FPT considers mergers and acquisitions to be an important new motivating factor to power its future growth. It will develop business operations following the Public-Private-Partnership (PPP) model in several markets, such as Myanmar and Bangladesh. For example, an e-ticket system, which was successfully rolled out for Vietnam Railway, is expected to be applied in Myanmar.
In an interview with itcnews.vn on February 14, Chairman of the Viet Nam Software and IT Services Association Truong Gia Binh said the domestic IT businesses had been aggressively expanding into foreign markets in terms of both scale and growth rate. Viettel, VNPT and FPT, as well as other businesses with advanced technology, such as DolSoft and MK Group, were leading the charge.
Binh said Japan was one market that had been attracting IT businesses from Viet Nam in recent years. Many major companies and small and medium enterprises had opened branches in Japan, including FPT Software, TMA, Luvina, Vietsoftware International and Tinh Van Outsourcing.
Binh said when Viet Nam signed the Trans-Pacific Partnership agreement, many IT opportunities would open in the fields of export and import, logistics, transport, customs and tax procedures and e-payment.
"An important thing to note is the co-operation among Vietnamese IT businesses. To develop the business, these enterprises must associate and co-operate with each other – a situation we have never had," Binh said.
As Viet Nam has been deeply and widely integrating into the world economy, many Vietnamese have joined the trend of spending billions of dollars abroad. Vietnamese dairy firm TH True Milk last year opened a $1 billion dairy farm in a Moscow suburb. The plant specialises in producing animal feed, breeding dairy cattle and producing milk.
Another major milk maker, Viet Nam Dairy Products Joint Stock Company (Vinamilk), has earned billions of dong from its investments abroad and from exports. In 2015, the company earned more than VND40 trillion ($1.79 billion) and after-tax profit of nearly VND7.8 trillion ($349.3 million). Of the former, revenue from foreign markets was VND8 trillion ($358.2 million), 39 per cent higher than the previous year.
Vinamilk launched its strategy to invest abroad by co-operating with Miraka to build a milk processing plant in New Zealand. The plant became operational in August 2011 and reached full capacity for production in August 2012. Vinamilk's total investment in Miraka has risen to more than $13 million, and its stake there has increased from 19.3 per cent to 22.8 per cent. In 2014, it also poured money into a business in Cambodia to supply milk for that market.
In 2013, Vinamilk invested $23 million in a joint venture in Cambodia with Angkor Dairy Products and spent $7 million on a 70 per cent stake in Driftwood Dairy Holding in California.
Taking the lead in overseas investment in mineral exploitation is Vietnam Oil and Gas Group, or PetroVietnam (PVN).
At a press conference, held in the middle of last year, Director of PVN's Overseas Project Management Department Vu Van Nghiem said the company had invested in 17 overseas projects, mainly dealing with exploration and exploitation of oil and gas, at a total value of $2.6 billion. PVN had, at that point, exploited 5.4 million tonnes of oil and gas, earning a profit of $470 million.
Masan Group last year made a $1.1 billion landmark partnership deal with Thailand's Singha Group to better serve the 250 million consumers in the ASEAN with a broader portfolio of branded food and beverage products. As part of the agreement, Singha agreed to invest $1.05 billion in Masan Consumer Holdings for a 25 per cent stake in the company and another $50 million in Masan Brewery for a 33.3 per cent stake.
A number of banks, such as Vietinbank, the Bank for Investment and Development of Viet Nam and the Bank for Agriculture and Rural Development, have combined their efforts to expand their overseas branches, especially in the ASEAN.
According to the Ministry of Planning and Investment's Foreign Investment Agency, Vietnamese businesses have invested nearly $20.5 billion in the fields of natural mineral exploitation, agriculture and telecommunications in foreign markets, including Laos, Cambodia, Africa and the United States. — VNS