A technician and workers of the Vietnamese telecom group Viettel work on a project in Cameroon
Local companies and groups say their overseas investments have begun to pay off and that they plan to devote more resources to such ventures.
Since the first overseas operation was reported in 1989, Vietnamese businesses have invested in 720 projects in 60 countries and territories. Eighty percent of these projects were launched in the past six years.
These companies repatriated US$430 million in total profits last year with the telecom, rubber, and oil and gas exploration industries being major profit earners.
Overseas investments, so far estimated at $15 billion, have significantly increased over the last few years with Laos being the top destination, according to the Foreign Investment Agency (FIA) at the Ministry of Investment and Planning.
Last year, such investments increased 30 percent over 2011 to reach $1.2 billion and are expected to be between $1 billion and $1.5 billion this year.
The telecommunication group Viettel last month reported that profits remitted from its overseas operations last year reached $76 million, almost doubling the 2011's figure.
Nguyen Manh Hung, vice chief executive officer, said overseas investment was necessary despite the risk of competing global groups. The local market was like a "tight shirt" and, even with population of more than 80 million, would at some point stop expanding, Hung told ICT news recently.
The company made its first overseas foray in 2006, establishing a telecom network in Cambodia. The subsidiary soon became the biggest network in the country, according to Viettel's Vice CEO Le Dang Dung.
Viettel now has projects in Laos, Cambodia, East Timor, Haiti, Peru, Mozambique and Cameroon. It has also announced plans to enter Myanmar and Thailand.
Viettel's local competitor FPT also reported a 30 percent increase in revenues to $90 million from its overseas investments. The group expects this source of income to increase further to account for 30 percent of its overall profits by 2015. It is present in 11 overseas markets producing software and providing telecom services.
FIA Director Do Nhat Hoang said neighboring Laos and Cambodia remained the "suitable places" for most Vietnamese investors, who have registered more than $3.8 billion in ventures in Laos and $1.5 billion in Cambodia. His agency was preparing special mechanisms to encourage further investments in these countries, Hoang said last month.
The Vietnam Rubber Group reported $1.8 million in profit from two rubber production projects in Cambodia and Laos. The group plans to expand the plantations from the current 173,000 acres to 247,000 acres by 2014.
The Hoang Anh Gia Lai group, which has multiple interests, will launch a rubber processing plant in Laos late this month. Its rubber plantations in Laos and Cambodia cover 60,000 and 23,000 acres respectively.
The group's chairman, Doan Nguyen Duc, was quoted in a statement released last April as saying the company would start earning revenues from its rubber and sugarcane investments starting this year.
It has also announced the launch of a sugarcane industrial complex, an ethanol factory and a fertilizer factory in Laos later this year.
The Five Star International Group, headquartered in Ho Chi Minh City, last year inaugurated an $80 million fertilizer plant in Cambodia. The project, managed by a joint venture in which the group holds a 90 percent stake, is designed to produce 350,000 tons of fertilizer per day in the first phase and take 40 percent of the market share in the neighboring kingdom.
Tran Van Muoi, chairman of the group, said they have great profit expectations from the plant because it will be the biggest and most modern in Southeast Asia.
Oil and gas exploration is said to be among the most profitable operations for Vietnamese companies operating abroad.
The state-owned oil and gas group PetroVietnam (PVN) last year remitted $360 million to make up over 80 percent of the overall repatriation of profits. The group said it has pumped more than $1.8 billion abroad, out of its committed $5.28 billion overseas investments.
In 2010, it joined a local company in Russia to explore and exploit oil and gas fields. The group has a total of 13 overseas projects in several countries including Laos, Cambodia and Russia.
PVN-owned oil and gas ventures worth more than $350 million in total also made up half of Vietnam's investments in Africa.
Oil and gas, telecoms and industrial plantations are the "strategic fields" of Vietnamese investors, FIA's Hoang said.
However, he admitted that overseas investments were still hindered by insufficient and at times contradicting regulations, and cumbersome procedures. Some investors were slow in implementing their projects, he added.
His agency has proposed to the ministry solutions that would improve policies to support and strengthen oversight of overseas investments, Hoang said.
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