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Eastern European investors return to Vietnam
After 20 years of absence, a lot of Eastern European investors are returning to Vietnam to seek investment opportunities.
In August 2008, Russia’s Mirax Group opened a representative office in Hanoi and announced big real estate projects in Vietnam.
The construction and real estate group, which had the turnover of $1.3bil in 2007, plans to implement a lot of luxury house and hotel projects in big cities like Hanoi and HCM City. Mirax’s first project in Vietnam, a luxury hotel on the Cam Ranh peninsula, Khanh Hoa province, was given an investment licence on August 8. The capital for the project has not been revealed, but it is believed to be tens of millions of dollars.
Dmitri Lutsenko, representing Mirax Group, said that the opening of the representative office in Vietnam is the first step of the group in its plan to expand the group’s operation in Southeast Asia, which he says is now drawing the attention of Russian citizens and the rest of the world.
Recently, leading Hungarian enterprises joined forces to set up a representative organisation in Vietnam in order to seek business opportunities and execute projects in Vietnam and Indochina. The organisation was established under the mode of a limited company, called AHEAD-Indochina, financially contributed to by trade development and information technology firms.
Joining AHEAD-Indochina, a representative of Hungary Import-Export Bank said that the bank can act as the financial support source and provide financial guarantee for projects in Vietnam.
Another member of the Eastern European bloc, the Czech Republic, surprised many Vietnamese enterprises by committing investment capital of $2.5bil during the visit by the Czech Prime Minister to Vietnam recently.
The two biggest highways in Vietnam are being executed with funds from loan agreements reached between Vietnamese banks and Czech partners. The Bank for Investment and Development of Vietnam and Czech Export-Import Bank reached an agreement on a $720mil loan out of the total $1.2bil needed for the 80 km Trung Luong – My Thuan – Can Tho Highway. The Hanoi – Hai Phong Highway has also got funds of $200mil from the Czech Republic.
BIDV and CEB will also provide syndicated loans to fund a lot of other projects, including a waste treatment plant with the capacity of 1,200-1,300 tonnes/day, and the Binh Duong Brewery Plant with the capacity of 200mil litres/year.
The return of Eastern European investors has surprised many people. However, Le Dao Nguyen, Deputy General Director of BIDV, said that the return was foreseen. The Czech Republic is a new member of the EU, but it has a relatively high development level. The country has the population of 10mil, but its GDP is $200bil.
Nguyen said that BIDV chose the Czech Republic as the site of a representative trade office. This will be a joint-stock company, BIDV Europe Finance & Investment, with the capital of $10mil. The institution, once operational, will provide financial services and act as an intermediary to bridge Vietnamese investors and the Czech market.
VNN
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