German Investors Seek Opportunities to Expand Operations in Vietnam

Vietnam is considered as a promising and reliable investment destination for German businesses in their investment diversification strategy.
August 12, 2023 | 14:22
German Investors Seek Opportunities to Expand Operations in Vietnam
Photo: baodautu

According to German Industry and Commerce Vietnam's (AHK) World Business Outlook Spring 2023, about 91% of German companies expressed their intention to continue investing or expanding production in Vietnam.

In addition, about 40% of surveyed businesses plan to increase their workforce in the next 12 months. These figures show the attractiveness and potential of the Vietnamese market for German investors.

Despite challenges related to inflation, instability of the global economy and growing political influence on supply chains, Vietnam is forecast to recover economic growth in the medium term.

This will be driven by many factors, such as free trade agreements, the China Plus One strategy, global trends in shifting and diversifying manufacturing supply chains to competitive hubs in Southeast Asia and green investment flows.

Up to this point, there are about 500 companies that invested about US$2.9 billion in Vietnam. Most of the projects are concentrated in the South (60%) and the North (22%), mainly in Ho Chi Minh City (280 projects) and Hanoi (75 projects). German investors created about 50,000 jobs, thereby making positive contributions to bilateral economic relations.

German businesses expressed high expectations for business development prospects, and strong commitment when investing in Vietnam.

In July 2023, Ziehl-Abegg, a company specializing in electric motors, air conditioning equipment and fans, announced a plan to put into operation a factory producing windpipe related products in Vietnam, with an investment capital of about US$20 million.

This move marks an important step towards expanding Ziehl-Abegg's global presence and demonstrates a commitment to sustainable development through the responsible use of natural resources.

German Investors Seek Opportunities to Expand Operations in Vietnam
German enterprises in Vietnam want to expand their investment in Vietnam. Photo: baodautu

In addition, Deutsche Bank revealed its plan to invest another US$100 million in its branch in Ho Chi Minh City in May 2023.

On August 9, pharmaceutical manufacturer STADA Vietnam established a new office in Ho Chi Minh City, underscoring its commitment to improving the quality of healthcare in Vietnam.

Investment from Germany into Vietnam in the first 7 months of 2023 shows the positive momentum and increasing confidence of German businesses.

As of July 20, the total newly registered capital, additional investmen,t and contributed capital and shares of German investors in Vietnam was nearly US$197 million, including 21 new projects, mainly focusing on the field of construction industry and building materials.

To further improve investment activities in Vietnam and enhance the attractiveness of this market as a destination for foreign investors, the Government of Vietnam should continue to make efforts to simplify administrative procedures, invest in infrastructure development, especially in transportation and logistics.

Enhancing the competitiveness of domestic enterprises, strongly developing industrial clusters, training intensive workforce, complying with international standards and ensuring stable electricity supply for sustainable development are also important solutions to enhance the investment attractiveness of Vietnam.

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