Vietnam has drawn a growing number of big Thai corporations to invest in its huge domestic market of 96 million people, a new trend that should be closely watched by Thai economic planners, as stated by The Nation, an English-language daily newspaper in Thailand, in its recently published article, entitled “Why Vietnam is such a magnet for baht”.
The article emphasised that, despite its gross domestic product (GDP) being half the size of Thailand – US$223 billion to US$455 billion in 2017 – Vietnam’s economy has been growing at a much faster rate for years, averaging 6-7 pct per annum.
“Fresh economic and business opportunities beyond borders” are the reasons leading major Thai conglomerates, including CP, ThaiBev, Central, Boon Rawd, PTT and SCG, to line up to invest hundreds of billions of baht into Vietnam, it stated.
The article cited an array of successful business stories of big Thai groups in Vietnam, as well as their plans to pour dozens of billions of baht into various sectors in the S-shaped nation, including ThaiBev in beer and beverages, retail and manufacturing; CP group in food and agriculture; Central, a retail conglomerate, in retail and other sectors; PTT and SCG in heavy industries and the energy and petrochemical sectors; Boon Rawd in the beverage industry; the Amata group in the industrial estate sector; Gulf in the energy sector; the Wha group in industrial estates and B Grimm in renewable energy.
The article also elaborated on why Vietnam has become an attractive destination in the eyes of Thai companies. First, it described Vietnam as a large domestic market of nearly 100 million consumers, which, it said, will fuel consumption and industrial growth in the coming decades. Second, the country has an abundant labour force, both skilled and semi-skilled, which will sustain its export-driven industries, the article added.
It emphasised that political stability with one-party rule, shrinking corruption and more authority being empowered on provincial governments to grant promotional privileges to foreign investors, are also among the big advantages that have made Vietnam more appealing to foreign investors.
Having a sharper focus on high-technology industries and belonging to multiple free-trade-agreement groups are other sources of attraction for the Vietnamese market to Thai and other foreign investors, the article stated.
The Thai entrepreneurs’ growing interest in Vietnam shows their advanced maturity in branching out to overseas markets and seeking new opportunities and profits, it said, noting that an increasingly successful Vietnam also offers Thailand lessons on what is required to make a comeback on the regional stage.