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Italian investors seek more opportunities
Italian companies have made many visits to Viet Nam looking for business opportunities, with the most recent being a group of seven on a five-day visit that began on Monday. Viet Nam News discusses the economic outlook with Marco Saladini, Italian trade commissioner in Viet Nam.
Italian businesses have paid many visits to Viet Nam. What is the attraction of this market?
In the last two or three years, we have recorded a steep increase in Italian companies' interest in the Vietnamese market. We believe that many are actually discovering Viet Nam, while a few are intensifying their efforts to break through, in the context of tough competition with producers from other countries. The main factors which attract Italian companies to Viet Nam are similar to those drawing the attention of other countries' companies (A dynamic economy, a large population, a reasonably priced and skilled workforce, to mention a few).
But we believe that there are some additional points which do actually allow economic relations to gain momentum. In fact, both countries share a prevalence, within their economic fabric, of micro-, small- and medium-d enterprises and of industries transforming imported raw and intermediate materials into final goods.
Complementarities are very apparent, in those sectors where Italy can provide advanced, capital-intensive goods and services which meet the needs of Vietnamese buyers in labour-intensive industries. This happens to a very large extent in the textile, footwear and chemical sectors. We believe that technologically advanced solutions as those offered by Italian companies can help Vietnamese ones in their rush to acquire a better and more profitable position in the global economic arena.
Which sectors in Viet Nam have Italian companies shown the most interest to?
We have been promoting, with good results in terms of participation and deals, a whole range of new sectors, beyond the traditional but still very important industrial machinery and plants. They include cosmetics, wines, services and supplies for the hospitality industry, and infrastructure works, such as transportation, power and environment, in addition to a cross-cutting activity such as investment facilitation, to which we have dedicated a specific task force operating from our HCM City office.
How do you assess trade relations between Italy and Viet Nam and recent years' trade value? What are the main exports and imports to and from Viet Nam?
Trade relations improved strongly up to 2007 and remained on balance stable thereafter. Our projections for the first 11 months of 2009 indicate that Italy's exports to Viet Nam in the whole year will show a growth of about 7 per cent over 2008, reaching about 450 million euros, of which more than 30 per cent is accounted for by industrial machinery applied in various sectors.
In the wake of increased competition from several other Asian countries and a surge in the euro's exchange rates, we believe this is an encouraging result and we are expecting a new acceleration in 2010. Meanwhile, the main products exported from Viet Nam to Italy include agricultural products, foodstuffs, garment and footwear, which usually account for about 50 per cent of the total export value. Last year, due to the global economic crisis, Viet Nam's exports to Italy slightly dropped about 10 per cent year-on-year, settling around a total value of 700 million euros.
How should you promote bilateral business ties?
In the next few months, we will be carrying out a number of sector-specific initiatives such as sponsoring Italian pavilions at a few trade fairs in Viet Nam, including Propak, Plastics and Rubber, MTA and Elenex. At the same time, we will co-operate with trade fairs organisers to send delegations of Vietnamese companies to important shows in Italy.
We are also setting up trade visits with customised agendas of meetings for groups of companies belonging to specific sectors or geographical regions. One of the important events in this area of work will be the visit by Adolfo Urso, Deputy Minister for Foreign Trade, currently scheduled to take place in May this year. Indeed, he will be accompanied by representatives of a number of companies, including some interested in infrastructure, textile and garments and footwear.
In order to reach out to local consumers, around the Italian national day, which is June 2, we will support an Italian festival together with local traders and Italian invested companies. Last but not least, our website, www.italtrade.com/vietnam, offers some free services to Vietnamese companies willing to do business with Italian counterparts.
And what about investment? It seems that Italian companies do not have investment interest in Viet Nam. Why?
I think you are right to bring up this issue, which we have been trying to confront for a few years now, thanks also to the work of the task force I mentioned before. I believe that besides the obvious geographical factors, there are also cultural differences and a gap in information, which we are trying to help fill with numerous publications and promotional initiatives specifically dedicated to investments.
We had a chance to renew our co-operation with several administrations and associations to this purpose, first and foremost with the Foreign Investment Agency, tied to the Italian Trade Commission by a memorandum of understanding signed in November 2008. In April 2010, we will jointly run a capacity-building seminar for officers in charge of investment promotion at the provincial and State level, in order to equip them with a better knowledge of investment attraction techniques, of the ties between the two countries and of the features of the Italian economic system.
Finally, a stream of visits in both directions is helping to make Italian companies aware of the advantages offered by setting up shop in Viet Nam. We have started seeing some results: the ranking of Italy as compared to other countries has improved, thanks to a spate of recent major investments, such as those by Piaggio (Scooters), Datalogic (Bar code scanners), Bonfiglioli (Gearboxes for industrial machinery), Mastrotto (Leather tanning) and Carvico (High-tech fabrics).
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