Thai ‘investment wave’ in Vietnam getting stronger
Thai investors are expected to increase their presence in Vietnam through capital contribution and M&A deals, analysts say. This will pose a challenge for Vietnamese goods.
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The first Thai investors came to Vietnam in 1992 and poured US$50 million into Vietnam after the first two years.
However, the Thai investment has become stronger in the last few years. Thai investments can be seen in nearly all important business fields.
A report found that Thai FDI (foreign direct investment) to Vietnam began increasing significantly in 1995, after Vietnam officially joined ASEAN.
By March 2018, Thailand had registered US$9.3 billion worth of FDI capital to implement 490 projects.
Thailand now ranks 10th among 126 countries and territories which have FDI in Vietnam.
In March, Thai investors registered total capital of US$30.16 million, including US$17 million injected into capital contribution deals.
Most recently, Nawaplastic Industries, a subsidiary of SCG, bought more shares of Binh Minh Plastics (BMP), raising its ownership ratio in BMP to 50.9%. With the ownership ratio of over 50%, BMP is now in Thai hands.
SCG, a conglomerate from Thailand, has invested in 21 companies in Vietnam, up to billions of dollars. However, SCG is still eyeing more businesses for its M&A plans.
An analyst commented that most of the big M&A deals made recently included Thai investors. These included the acquisition of 51% of Sabeco shares by TCC Holdings. It was TCC Holdings which took over Metro Vietnam and renamed it as MM Mega Market.
The group took over Phu Thai Group, is holding 19% of Vinamilk shares and owns many properties in Vietnam.
TCC and SCG are not alone. Analysts say that many other Thai investors are eyeing the Vietnamese market.
The participants at a 2017 M&A Forum all mentioned Thailand’s ‘quick-win’ strategy. Thai businesses have capital and are willing to pay a lot to buy Vietnamese enterprises with great development potential.
The Vietnamese enterprises targeted by Thai investors are mostly corporations which hold large market share. In general, retail and consumer goods are the business fields that Thai investors target. Besides, they have also been eyeing other promising industries.
Vietnam has remained an attractive destination for foreign investors with total foreign direct investment FDI capital hitting US$36 billion in 2017, a record over the past 10 years.
