Impressive economic growth after more than three decades of opening up, growing affluent class and purchasing power are factors behind the fresh investment wave from Sweden.
Leaders from more than 50 Swedish companies and trade supporting organizations will arrive in Vietnam next week to explore business opportunities in one of the fastest-growing economies in Asia as a landmark free trade deal between Vietnam and the EU is poised to take effect soon.
The Swedish business delegation, the largest ever and led by Minister for Foreign Trade Ann Linde, will also include officials from Business Sweden and the Swedish Institute. They will join the Sweden-Vietnam Business Summit on May 7 in Hanoi.
The summit is designed to strengthen the position of Sweden and Swedish companies in Vietnam and to showcase Swedish companies’ products, solutions and ethical behavior and their positive effect for Vietnam. With the participation of major names such as ABB, Astra Zeneca, Atlas Copco, Ericsson, Electrolux, IKEA, Oriflame, SAAB, and Volvo Buses, the event will highlight world-class Swedish solutions in manufacturing, smart cities, smart living, transportation, energy, health, education and sustainability.
At the summit, there will be two exhibitions, with one showcasing individual companies and their products and solutions. The other exhibition by the Swedish Institute will focus on Swedish innovative and creative solutions in a number of fields.
The event will be opened by Crown Princess Victoria of Sweden, who will pay an official visit to Vietnam on May 6-8 on the occasion of the 50th anniversary of bilateral diplomatic relations.
In 1969, Sweden became the first Western country to establish diplomatic ties with Vietnam, which was in the middle of a bloody war to fight foreign invaders and reunify the divided nation.
In 2004, King Carl XVI Gustaf and Queen Silvia of Sweden made the first state visit of a Swedish head of state to Vietnam. The royal figures visited Hanoi, Ho Chi Minh City, Hue, Ha Long Bay and Phu Tho province where Vietnam’s first paper mill was built with Sweden’s assistance. The Queen also made a special visit to the National Hospital for Pediatrics in Hanoi.
Thriving economic links
As two complementary economies, Sweden and Vietnam are looking to enhance trade and investment relations.
The two countries signed the bilateral investment treaty in 1994, aiming to create fair and equal terms and opportunities for investments between the two countries. However, Swedish investment in Vietnam remains modest, with US$365 million in 68 projects to date, putting the European country at the 33rd place among 131 countries and territories investing in Vietnam, according to statistics of the Ministry of Planning and Investment.
With a population of nearly 100 million and the rapidly-rising middle-income class, Vietnam is an attractive market in the eyes of any foreign business, and Swedish companies don’t want to miss the huge opportunities here.
Apart from ABB, Electrolux and Ericsson, which have set their foothold in Vietnam for decades, a bunch of manufacturing and consumer goods companies have been pouring money in Vietnam, forming the second wave of investment from the Nordic country, particularly in the consumer goods industries.
Volvo started to bring its high-end cars to Vietnam in 2016 and is advancing plans to sell trucks and busses in this country. Meanwhile, fashion chain H&M has opened six stores in Hanoi and Ho Chi Minh City and has over 30 suppliers after two years of setting foot in Vietnam.
Well-known home furnishings retailer IKEA has shown rising interest here with plans to build a retail center and warehouse system in Hanoi with an investment of US$450 million, Nguyen Duc Chung, chairman of the Hanoi People’s Committee, said in January.
Tetra Pak, another Swedish giant, in 2016 started building another packaging plant worth US$110 million in Southern Vietnam. It is providing carton packs for major milk producers in Vietnam namely Vinamilk, TH True Milk and Vinasoy.
Impressive economic growth after more than three decades of opening up, growing affluent class and purchasing power are factors behind the fresh investment wave from Sweden, said Swedish Ambassador to Vietnam Pereric Hogberg.
Swedish Ambassador to Vietnam Pereric Hogberg has been active in promoting presence of Swedish businesses in Vietnam. Photo: Tech2.org.
That Vietnam moves up the value chain will also open up new chances for innovative Swedish companies, the ambassador added.
Higher interest from Swedish businesses also stems from the EU–Vietnam Free Trade Agreement (EVFTA), which is the most comprehensive free trade agreement that the EU has ever concluded with a developing country. The FTA is expected to be ratified later this year and come into force in the beginning of 2020, removing the majority of tariffs on imports between the two economies.