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THE WALL STREET JOURNAL.
Monday, September 24, 2007
A13
Special Advertising Section
v ietnam t oDay
Playing a
Greater role
on a
Global Stage
By Darrell Delamaide
H
o Chi Minh City this week (Sept. 26-27) will
host a meeting organized by the World Wildlife
Fund concerning the environmental and social
impact of catfish farming. Production and export of catfish has skyrocketed in the past few years — to more
than 1 million tons this year from 440,000 tons in
2005 — and Vietnam, which farms 90% of the global
production, has emerged as a leading aquaculture center.
The catfish conference (the politically correct WWF
refers to Pangasius species tra and basa) is one of half a
dozen global conferences organized by the nonprofit to
set standards and coordinate dialogue for aquaculture
products. Other conferences deal with salmon, shrimp,
tilapia, trout and molluscs.
Catfish farming comes naturally to Vietnam, where
the fish has been a staple of the local cuisine. Coffee is
another example of how the country has capitalized on
an existing capacity — coffee was first planted on Vietnam’s central highlands in the 19th century by French
colonists — and bulled its way to the top. Vietnam is
now the world’s second biggest exporter of coffee after
Brazil. The country’s willingness to exploit these readymade niches in world trade is one sign of its emergence
as a full-fledged player in the global economy.
“Vietnam has gone from being not very
much of a factor to being considered one
Above left: The architecture of Ho Chi Minh City offers a blend
of old and new, East and West. Above right: Hanoi’s Temple of
Literature is a living link to Vietnam’s cultural history.
Left: The friendly people of Vietnam welcome their entry onto
the global stage.
of the leaders in the region.” Devin Stewart
There are other signs — from Vietnam’s strong export growth to its high level of foreign investment. This
process, which began in the 1990s with the U.S. lifting
of trade sanctions and establishing diplomatic relations,
has grown as this nation of 85 million people becomes
integrated into the world economic infrastructure.
“Vietnam has gone from being not very much of
a factor to being considered one of the leaders in the
region,” says Devin Stewart, an Asia expert at the Carnegie Council for Ethics in International Affairs, a New
York think tank. In a recent trip through several Asian
nations, Stewart found political and business leaders
speaking of Vietnam’s new leadership role “with optimism, and a bit of surprise.”
Last November, Vietnam hosted the annual summit of the Asia-Pacific Economic Conference, which
groups all the Pacific Rim countries from the United
States to Australia, and formally joined the World Trade
Organization at the beginning of this year, following
the successful completion of the complex negotiations
for accession.
increase of nearly 40%, according to the government.
The country has set a target of $13 billion for the entire
year, compared with $12 billion in 2006.
“They are reaping the rewards of investment,” says
Carnegie Council’s Stewart. Vietnam has the advantage
of being an organized society that has kept its focus on
capital and technology, he says.
South Korea remains the largest foreign investor in
Vietnam with 24.4% of the total FDI inflow, followed
by Singapore with 18.7%, the British Virgin Islands
with 12.1% and Taiwan with 8.4%. Foreign investment
and overseas remittances are key to helping Vietnam
offset its widening trade deficit, which the government
forecast would nearly double this year to $8 billion.
As with China, albeit on a smaller scale, Vietnam’s
growing economic role is also bringing some political
clout. Vietnam has the backing of the 50-nation Asia regional bloc in the United Nations to become a member
of the Security Council for a two-year term when the
successor to Qatar is voted on next month (October). If
it gets the support of two-thirds of the General Assem-
bly, Vietnam will join the five permanent members and
nine other non-permanent members in 2008-09. The
accession of Ban Ki-moon, former foreign minister in
South Korea, as U.N. secretary-general last year shows
Asia’s growing role in the world body.
Vietnam first registered as a candidate for the Security Council in 1997 and has paid its dues over the
past decade by actively working in the U.N. framework
to help with conflict resolution. An election now to the
Security Council would lend further momentum to the
country’s growing role in world affairs.
Darrell Delamaide is a freelance writer based in Washington, D.C. He has been covering international business and politics for more than 30 years for Dow Jones,
Bloomberg and Institutional Investor, among others. He
was the editor of a special publication last year for the
Asia Society’s 50th anniversary, “The Asia Pacific Century: A New Era.”
aSean Charter
This kind of growth is attracting foreign investment.
Vietnam drew an estimated $8.3 billion worth of foreign direct investment through August, a year-on-year
Nguyen Tan Dung, Vietnam’s youngest prime minister since 1975, arrives in New York today for a historic mission: launching Vietnam to the global stage.
He will address the U.N. General Assembly, and his
presence is of great significance for his country. Just
after Vietnam gained independence in 1945, President
Ho Chi Minh quickly expressed his aspiration to join
the United Nations. Vietnam could not join this world
body until September 20, 1977, after 30 years of war.
Today, Vietnam is at another turning point — about
to join the Security Council as a non-permanent member. Together with the five permanent and nine nonpermanent members, Vietnam will debate and decide
important matters relating to world peace and security.
At the time of accession to the United Nations, no Vietnamese could have imagined such a thing.
There is reason to believe that given its new international standing, Vietnam will play a proactive role in
resolving regional and global issues. Vietnam’s success
in hunger eradication and poverty reduction has surprised the United Nations and other members pursuing
the millennium goals. A new foreign policy of openness and engagement has gained Vietnam new friends
and new channels to peacefully resolve conflicts and
disputes.
Vietnam’s enhanced world role is supported by
its dynamic economic growth over the past 20 years
since Vietnam embarked upon renovation (doi moi)
and world integration. Though not an architect of doi
moi, Nguyen Tan Dung has been playing a crucial role
in steering Vietnam’s economy and sustaining the
reform impetus. He possesses a keen understanding
of the country’s economy, which he observed as state
bank governor and, since 1997, as a deputy prime
minister.
With more than a year in office, Dung has proven
to be a man of action. He has groomed talented younger leaders and sent corrupt officials to face justice.
Economically, the past year has seen many records in
foreign direct investment and trade. Last week the
Asian Development Bank forecast a growth rate of 8.8%
for 2007.
Internationally, Nguyen Tan Dung has been
known as a reformer. At last year’s World Economic
Forum, he was in the spotlight of the press and business circles. During a recent tour of Asia and Europe,
Dung brought back to Vietnam several billion dollars
worth of business deals.
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Growth in Foreign investment
Beginning of a new era for
vietnamese Diplomacy
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Another important international forum for Vietnam
is the Association of Southeast Asian Nations. This
coming November, this regional grouping will adopt a
charter for the ASEAN Economic Community to further
integrate the economies in this dynamic region by creating a single market by 2015. The organization — which
groups Vietnam together with Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore and Thailand — has a total population of some
550 million, more than in the European Union.
ASEAN is seeking to capture additional momentum
from the rise of China and India. The rapid economic growth in these two giant countries has stimulated
growth in Southeast Asia as well. ASEAN countries
serve as suppliers to the two giants and increasingly
are getting spillover investment, including investment
from China itself. The region is also profiting from recovery in Japan and growing demand in new markets
in Eastern Europe and the Middle East.
All of this has benefited the Vietnamese economy,
which has been growing at about 8% a year. Exports
have led the growth, increasing at about 20% a year.
Through August of this year, exports rose 19.3% to
$31.2 billion, according to government data, putting the
country on track to hit $48 billion to $50 billion for the
entire year. Vietnam’s key exports include crude oil, textiles, footwear, fish and shrimp and furniture. It is also
the world’s top exporter of black pepper and cashew
nuts and ranks second in sales of coffee and rice.
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Monday, September 24, 2007
THE WALL STREET JOURNAL.
Special Advertising Section
Vietnam Enters the Satellite Age
Energy Industry
Supports
Economy
By Darrell Delamaide
When a young American
Peace Corps volunteer from
Baltimore took up his posting
earlier this year in a Saharan
village in southern Morocco,
he thought he would keep in
touch with home via the Internet. But the closest Internet connection is a day’s walk
away and in fact he communicates frequently with his
parents by cell phone — either by voice or, more often,
text messaging.
The Moroccan telecoms
system, backed by the French
firm Vivendi, covers virtually
the entire population. Numerous developing countries
like Morocco have leapfrogged the costly and arduous
process of laying land lines for telecommunications
and gone straight to wireless, using dedicated stationary satellites to blanket a country.
Vietnam is about to join their number. Last year, the
Southeast Asian nation awarded a contract to Lockheed
Vietnam has become a significant regional oil exporter as production continues to outstrip demand even
with the country’s booming economy. The prospect of
substantial foreign investment and expertise is likely to
increase exploration and development in both oil and gas
sectors, making energy a centerpiece of the economy.
Oil and gas production is all offshore, in fields
colorfully named for lions and tigers and dragons.
Vietnam launched a new licensing round in June for
offshore lots.
Martin’s space and satellite unit to provide a turnkey
satellite system to transmit radio, television and telephone communications to all corners of the country.
The system, dubbed Vinasat-1 and due to begin operation in the second quarter of next year, will improve
the nation’s communication networks infrastructure by
removing dependence on ground networks and allowContinued on next page
Oil production actually declined in 2006 and 2007 as
some of the major producing fields came off their peaks.
In particular, the Bach Ho (White Tiger) field — the country’s largest, accounting for half its production — has been
declining. After running above 400,000 barrels a day in
2004, Vietnamese oil production declined to 362,000 barrels a day in 2006. The U.S. Energy Information Agency
believes production will once again top 400,000 barrels a
day in 2008.
According to the EIA, Vietnam had proven
and probable oil reserves of 560 million barrels and gas reserves of 24 trillion cubic feet as
of January 2007. Because Vietnam’s offshore
CT GROUP
A NEW LIFESTYLE
IN A NEW TIME
territories are relatively underexplored, these
reserves are likely to increase with new finds.
New Licenses Drawing Foreign Investment
The state oil company, Petrovietnam, believes the
Song Hong basin (in the Gulf of Tonkin) could hold
oil and gas reserves of as much as 5 billion barrels
of oil equivalent. The current licensing round includes
seven lots in the basin, due to be awarded next month
(October).
ConocoPhillips is the largest U.S. energy investor in
Vietnam, with investments in excess of $625 million.
The company holds 6 million gross acres (3.2 million
net) in six blocks, and a 16.33% interest in the Nam
Con Son gas project. The company has significantly increased its exploration acreage, production and gas infrastructure in Vietnam over the last several years.
ConocoPhillips is the second biggest investor,
behind Petrovietnam, in Cuu Long Basin. Black Lion,
Golden Lion, White Lion and Brown Lion are the most
active areas for exploration and production activities.
The Su Tu Vang (Golden Lion) field is expected to add
production of 100,000 barrels a day in late 2007 or early
2008. Several other fields in the Cuu Long Basin are expected to come onstream in 2008.
Gas Fields Fuel Power Complex
C.T PLAZA TAN SON NHAT
C.T PLAZA LE THANH TON
While several of Vietnam’s nine producing fields also
produce a significant amount of associated natural gas,
the largest fields to be developed solely for their natural
gas potential are the Lan Tay and Lan Do fields. These
fields are at the heart of the $1.3-billion Nam Con Son
Gas Project, an integrated gas-to-power project that delivers natural gas supplies from the offshore fields to the
Phu My power complex via a 230-mile subsea pipeline.
In an age of $75-a-barrel oil, Vietnam’s
burgeoning energy industry provides a
major support for the economy, saving the
cost of importing oil while also supplying a
major export commodity.
Leading global retailers and investors have been
partnering with the C.T. Group since 1992. From
building office, new urban residential complexes
and department stores to introducing luxury goods
to the Vietnamese market. The C.T. Group has the
experience and knowledge to get things done. If
you are interested in investing in Vietnam, please visit
www.ctgroupvietnam.com.
CT Group Vietnam 144-146-148 Ba Thang Hai Street, Ward12, Dist. 10, Ho Chi Minh City, Vietnam
Tel:+84 8 631680 Fax: +84 8 631682 Email: [email protected]
This special advertising section was coordinated by DC Group
and Partner Concepts and sponsored by CT Group Vietnam.
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LE VAN SY PROJECT
5239146
NGUYEN HONG PROJECT
The project is operated by a consortium consisting of
Petrovietnam, with a 51% stake; BP, with 32.67%; and
ConocoPhillips, with its 16.33% interest. The gas project is the largest foreign investment in Vietnam’s energy
sector to-date. Petrovietnam believes the Lan Tay/Lan
Do fields hold more than 2 Tcf of recoverable natural gas
reserves. Production at the fields is set to rise to 530 million cubic feet per day by the end of 2007, an increase of
14% from current levels.
Two other fields in the Nam Con Son Basin, the
Rong Doi (Twin Dragon) and Rong Doi Tay (Twin Dragon West), commenced production last November. The
fields hold estimated reserves of 856 Bcf, and exploration continues.
In an age of $75-a-barrel oil, Vietnam’s burgeoning
energy industry provides a major support for the economy, saving the cost of importing oil while also supplying a major export commodity. As exploration continues,
the role of energy in the economy could expand even
further.
— Darrell Delamaide
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THE WALL STREET JOURNAL.
Monday, September 24, 2007
A15
Special Advertising Section
Vietnam Enters the
Satellite Age
Continued from previous page
Sizzling Stock Market Gets
Much-Needed Correction
ing 100% of Vietnam’s rural communities and hamlets
to be equipped with telephones and televisions. But it
will also give a boost to the country’s growing role in
the international economy.
“Vinasat-1 will provide state-of-the-art technology
that will help Vietnam enhance its role in modern world
trade,” Ted Gavrilis, president of Lockheed Martin Commercial Space Systems, said when the contract was
signed in May 2006. “As Vietnam continues to improve
its investment and business environment, it will also
enter the communications marketplace using a strong,
reliable telecommunications network with Vinasat-1 as
its anchor.”
of partially privatized state-owned companies that
have been distributed to employees. These are traded
privately much the way goods are traded on eBay or
Craigslist in the United States. Though called a gray
market, this over-the-counter market is quite colorful,
with shares exchanged for cash at tea shops in a way
reminiscent of the coffee shops that gave birth to European exchanges.
While the official stock market has been functioning since 2001, the regulatory infrastructure for both the
exchange and for companies has been catching up. A
securities law was passed only last year. The law covers
the listing and trading securities; the government’s role
in administering and inspecting the securities market;
public offerings of securities; disclosure requirements
and corporate governance of public companies; the
organization of trading markets; depository, clearance
and payment facilities; investment management and
fund companies; inspections and dispute resolution.
VNPT Group Leads Telecoms Expansion
The government contractor for the project is the
Vietnam Posts and Telecommunications Group (VNPT),
which is tasked with the exploration, consultation, design, installation and maintenance of telecommunications and information technology for the nation. VNPT
has organized multiple major business ventures in
primarily the posts, information technology and telecommunications sectors. By mobilizing all economic
segments of the nation, VNPT aims to modernize the
nation’s technological infrastructure by implementing
high-speed, high-capacity and high-quality telecommunications systems.
The VNPT Group itself was formed last year through
a reorganization of the Vietnamese Post and Telecommunications to put it on a more businesslike footing as
it seeks to modernize the country’s telecommunications.
It has been engaged in a flurry of activity since then.
This past summer, VNPT announced plans to extend WiMAX to the country’s two biggest cities, Hanoi
and Ho Chi Minh City, after testing it in the northern
province of Lao Cai. WiMAX stands for Worldwide Interoperability for Microwave Access. It provides fixed,
nomadic, portable and mobile wireless broadband connectivity without the need for direct line-of-sight to a
base station. VNPT Group is also formulating plans to
spend $1 billion on a Next Generation Network — which
allows different service providers the same access to users — and has moved closer to the partial privatization
of its mobile phone subsidiary, MobiFone, through an
IPO next year.
Robust Mobile Phone Industry
Two other state-owned companies are operating in
the telecoms sector — Viettel, a military-owned network,
and EVN, the Vietnam Electricity Telecom Company.
Vietnam already has a robust mobile phone industry. According to industry consultant Paul Ruppert, 7
million people became mobile subscribers last year, a
70% increase that raises the total to 17 million, out of a
population of 84 million.
Market researchers expect Vietnam to have 46 million mobile phone users by 2010, Ruppert says, a 270%
increase from today’s level. The Council of Economic
Policy Research has calculated that a 10% increase in
mobile phone penetration can add 0.59% to economic
growth, so that Vietnam would benefit from additional
GDP growth of 16% over the next 4 years if these forecasts are correct.
Building a Stock Market Culture
By Darrell Delamaide
Vietnam’s sizzling stock market finally cooled off a
bit this summer, as a correction welcomed by financial
professionals showed the masses of retail investors that
stock prices go down as well as up.
Even before global stock exchanges swooned in August amid fallout from the sub prime mortgage crisis in
the United States, Vietnam’s bourses in Ho Chi Minh City
and Hanoi were falling, shedding 8% in June and 11.3%
in July. The main stock index, VNIndex, which had gained
144% in 2006, after the correction over the summer, was
up a more modest 21% this year through August.
While the fall in prices this summer made some
Vietnamese retail investors nervous — they have been
used to stocks only going up — fund investors used the
lower stock prices to do some buying. While the uncertainty in the market put some initial public offerings on
hold, the correction was also welcome to companies
planning IPOs because it provided some room for the
new issues to rise when the market does recover.
The International Monetary Fund warned the Vietnamese government earlier this year that the stock
market was overheated — the 20 top companies, accounting for 99% of market capitalization, had an average price-earnings ratio of 73, indicative of an intensely
speculative market. A stock market collapse could hit
domestic banks hard and lead to an outflow of foreign
capital that could aggravate the country’s current account deficit, the agency warned.
Retail Investors Catch Stock Fever
Vietnam has caught stock market fever in the past
couple of years, with tens of thousands of investors playing the official stock exchanges and perhaps hundreds
of thousands more taking part in unregulated and unsanctioned Internet trading. In a country where monthly
wages are a few hundred dollars and where mopeds
have just replaced bicycles as the affordable transportation, quick gains on the stock market have great appeal.
The Internet market functions primarily with stocks
Since most existing companies are state-owned,
getting companies to market has involved first reducing the number of companies — from about 12,000
to 5,000 — and then “equitizing” (converting to jointstock company format) and restructuring the companies. Vietnam is getting lots of help in this task, with
the World Bank, the IMF and numerous private firms,
including investment banks and international accounting firms, helping the country structure not only a stock
market but a whole corporate culture and system of
free enterprise.
When Vietnamese President Nguyen Minh Triet visited the United States in June, the Ho Chi Minh Stock
Exchange and the New York Stock Exchange signed a
memorandum of understanding for cooperation and assistance. The agreement will pave the way for developing the stock market in Vietnam, training assistance,
information sharing and sharing of expertise in market surveillance. Nasdaq is working on a cooperative
agreement with the Hanoi exchange.
The market’s cooling, along with global market uncertainties, has temporarily dampened the IPO market.
BaoViet, the state insurance corporation and tipped as
the bourse’s next blue chip, had a tepid response to its
IPO in May and an unsuccessful secondary auction. An
auction of 6 million shares by the Song Da Industrial
Zone and Urban Development and Investment JSC in
August left more than 5 million shares unsold.
Other companies have postponed or canceled their
plans to sell shares. Vietcombank did not make its August deadline for an IPO and the timing may be delayed
for other big IPOs in the offing, such as the Bank for
Investment and Development of Viet Nam (BIDV), the
Viet Nam Bank for Foreign Trade and the Viet Nam Mobile Telephone Services Company (MobiFone).
But the long-term prospects remain, as evidenced
by the engagement of U.S. investment banks. Morgan
Stanley is set to launch a joint venture securities firm
in the fourth quarter while Goldman Sachs and Merrill
Lynch have submitted applications to form joint ventures with Vietnamese partners.
getaways. Situated on a spacious 86 acres, the resort
has room for each one of the 60 one-bedroom villas
and 40 pool villas to occupy its own section of landscaped garden with a view of the South China Sea and
the Cham Islands. Designed by Parisian architect Reda
Amalou, the villas feature interiors that are muted,
with dark wood, clean lines and a sense of uncluttered
luxury. The resort is located 18 miles south of Danang
and 7 miles north of historic Hoi An.
Off the southern tip of Vietnam, in the Gulf of Thailand, is Phu Quoc Island, home to La Veranda boutique
resort and spa. Built by Grand Mercure in the style of a
colonial seaside mansion, the hotel is helping transform
the island into a vacation destination. Its 43 rooms, each
with a private balcony, are decorated with locally made
teak furniture in the style of Indochine of the 1920s. The
island, an oasis that remains free from mass tourism, is
an hour’s flight from Ho Chi Minh City.
Resorts Draw International Investment
Coastline Attracts Luxury Resorts
After Six Senses Hotels brought the luxury of a
world-class spa to the idyllic setting of Nha Trang with
the Ana Mandara Resort, the new Evason Hideaway
on a neighboring island in Ninh Van Bay adds another
dimension with its 66 pool villas. Accessible only by
boat, the Evason Hideaway takes full advantage of the
setting — impressive rock formations, the coral reef,
white sand beach, a playful stream and the towering
mountains. Organic fabrics and natural decor reinforce
the simplicity of the setting and provide an atmosphere
for absolute relaxation.
Farther north on the central coast is the scenic Danang-Hoi An corridor. On a prime stretch of the Ha My
beach, the recently opened The Nam Hai resort from
GHM Hotels sets a new benchmark in beach front
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With more than 2,000 miles of coastline, much of
it sheltered by picturesque gulfs and bays, it’s not surprising that Vietnam has become home to some of the
world’s most luxurious resorts.
About 3.6 million foreign visitors came to Vietnam last year, the bulk of them tourists. In the first
six months of this year, occupancy at hotels has run
high, with most high-end hotels full, especially in Ho
Chi Minh City.
Asia travel in general is hot, and Vietnam is becoming a popular vacation destination — whether for seakayaking in Ha Long Bay, a World Heritage site in the
Gulf of Tonkin, cultural attractions in Hue, or the white
sandy beaches of Nha Trang, often called the Riviera of
the South China Sea.
5239147
Ha Long Bay in the Gulf of Tonkin
These world-class resorts are the vanguard of a
tourist culture that is attracting investment from the
major hospitality companies. The trendiest spot now
is the Mui Ne beach in Phan Thiet, a few hours’ drive
from Ho Chi Minh City, which the New York Times
recently called the “Hamptons” of Vietnam because it
is also attracting the nouveau riche from what the natives still call Saigon. Only a few of the 80 resorts cater to foreigners and ex-pats, but development there
is another sign of the vitality of the Vietnamese tourist industry.
The latest indication of Vietnam’s attractiveness
as a resort location are plans by some of the oil-rich
Middle East developers to get involved. Saudi Arabia’s Jehan Holding Group has obtained a license
from the central highlands Lam Dong authorities to
invest $1 billion in a high-end resort in Da Lat. The
resort is to include villas and international-standard
recreation facilities.
Also, Dubai-based Kingdom Hotels Investments
has plans to build the $65 million luxury resort Raffles
Danang. It has acquired a prime beach site in My Khe
for the project, which is due to be completed in 2011.
— Darrell Delamaide
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Monday, September 24, 2007
THE WALL STREET JOURNAL.
Special Advertising Section
Contract
Manufacturing
Gains Momentum
Foxconn wants to invest up to $5 billion in
Vietnam, bolstering the country’s reputation
as the next big contract manufacturing
center in Asia.
By Darrell Delamaide
Vietnamese employees manufacturing high-tech products.
We know that Apple’s iPods are not made in California, Nokia’s cell phones are not made in Finland and
Sony’s laptops are not made in Japan. In fact, they are
not even made by the companies that developed them,
market them and brand them. Most of them, right now,
are made in China under the aegis of the Taiwan company Hon Hai Precision Industry, which operates under
the trade name Foxconn.
Foxconn is the world’s largest contract manufacturer,
exporting some $45 billion in manufactured goods annually, mostly from facilities in China. And now Foxconn wants to invest up to $5 billion in Vietnam, bolstering the country’s reputation as the next big contract
manufacturing center in Asia.
Foxconn is not alone in the rush to take advantage
of the Vietnam workforce, which appears relatively
CT Group – the Claws of the Vietnamese Dragon.
cheaper as surging demand pushes Chinese wages higher. While Vietnam’s minimum wage of about $60 per
month is less than in much of coastal China, however,
China’s extensive network of component suppliers still
gives it the edge. The pace investment in Vietnam may
change that equation in the near future, as suppliers
follow their clients to the new venue.
When Compal Electronics, an original design manufacturer based in Taiwan, announced in June that it
will build notebook PCs in Vietnam, Gold Circuit Electronics, a maker of printed circuit boards, said it would
consider following Compal there. Compal said it would
invest $30 million in the initial stage, with mass production beginning in 2009. The company also plans to
expand into LCD TVs.
Southeast Asia Emerges as Hot Spot
Starting in 1992 as Saigon Trade Company (SGC),
which specialized in consumer goods, CT Group has
expanded into high-end retail, high-end retail infrastructure development, real estate, food and beverage,
plantation and corporate finance. And the business has
grown with dazzling speed and handsome profit.
“What would you think of a country with more than
60% of its population (about 50.4 million people)
under 30 and a practical growth rate of more than
9% ?” Mr. Tran Kim Chung asks.
“No market is better than a comprehensive lifestyle
market,” he asserts.
Chung thinks that investors are in a fever with the
real estate market but real estate is only one part of
a lifestyle market.
”We build and sell not only modern and youthful apart-
CT Group is the sole Vietnamese provider of more
than 20 regional and international brands in fashion, cosmetics, perfume, body care products, leather
wares, footwear and jewelry. The company also is
building luxurious shopping malls, movie theaters,
international schools, a nationwide retail network
and restaurants. In December, CT Group is opening
a department store and a chain of six restaurants in
downtown Ho Chi Minh City. At present, the group is
looking to bring the world’s most popular fast food
brands to Vietnam.
“In a young country like Vietnam, lifestyle is an overwhelming industry,” CT Group’s CEO said.
His group is known in Vietnam not only for huge investment in real estate projects and plantations, but
also for its sole distribution rights of more than 20 big
brands including Calvin Klein Jeans, Calvin Klein Underwear, ck Calvin Klein, Lancel, OPI, Lolita Lempicka,
Laneige, Guess, Renoma and Swarovski (lighting), among
others. The six lines of business are well combined to
generate a highly strategic synergy. CT Group is also
eyeing new ventures in communications, tourism, culture
and investment in rapidly growing foreign countries.
If Vietnam is a soaring dragon, then CT Group a
pioneer in the smokeless industry — can be seen as
the dragon’s claw.
Market research firm iSuppli says China remains
the hub of contract manufacturing, generating more
than 50% of all contract-manufacturing revenues,
but Southeast Asia is emerging as a new hot spot as
manufacturers seek to diversify. A recent iSuppli study
forecasts contract manufacturing revenue in Singapore,
Thailand, Malaysia and Vietnam increasing to $25 billion a year by 2011 from $16 billion in 2006. Vietnam is
seen enjoying the most rapid growth.
A recent iSuppli study forecasts contract
manufacturing revenue in Singapore,
Thailand, Malaysia and Vietnam increasing
to $25 billion a year by 2011 from $16 billion
in 2006. Vietnam is seen enjoying the
most rapid growth.
“iSuppli believes that several factors are triggering
this resurgent growth among Southeast Asia contract
manufacturers, including a backlash against China,”
says Adam Pick, an iSuppli analyst. Original equipment
manufacturers are adapting their strategies given endmarket demand and total landed costs, he says.
Foxconn will be doing its part to contribute to Vietnamese growth in this sector, spreading the wealth
throughout the country. This past summer, the company got approval for its plans to invest $1 billion in
high-tech projects in Ho Chi Minh City. It will build a
500-acre high-tech park at the Tan Phu Trung Industrial
Park in the city’s outlying Cu Chi district as well as a
high-tech commercial service center in District 2’s new
Thu Thiem urban area.
In August, Foxconn opened two new factories in the
northern Bac Ninh province to produce camera modules, main boards and connectors. Often, these projects go beyond just building a factory. Foxconn plans
to build another high-tech park in Bac Ninh, complete
with a new residential township, a golf course, a hospital and a theme park.
The company also entered into a memorandum of
understanding to invest $1 billion in the central province of Binh Dinh. The company also plans to invest
in three projects in the province’s Nhon Hoi Economic
Zone: an industrial park, an apartment building and
recreation area, and a resort. Other contract manufacturing projects include:
• Jabil Circuit, another big electronic contract manufacturer based in St. Petersburg, Fla., in June began
operations at its facility in Saigon Hi-Tech Park in
Ho Chi Minh City, where it makes laser printers for
Hewlett-Packard. Jabil plans to spend up to $100
million on its operations in Vietnam.
• Allied Technologies of Singapore operates three
separate divisions in Vietnam supplying Jabil. In
operation since 2005, it now employs 250 workers in metal stamping, plastic molding and extrusion facilities for parts Jabil uses to produce HP
printers.
• Altera of San Jose, Calif., on June 4 announced it would
establish a technology center in Ho Chi Minh City to
support its global chipset development network.
• Japanese semiconductor design company Renesas
Technology established Renesas Design Vietnam,
which develops large-scale integrated devices for
applications in consumer electronics, mobile products and automobiles.
P2JW267010-0-A01600-1--------XA
But Tran Kim Chung, President and CEO of CT Group
doesn’t follow suit. He keeps riding in an old Lincoln
Town car that has followed him across Vietnam for
many years on important business trips, even as his
staff drive newer cars.
ments to young businessmen but also sell lavish villas
to customers who purchase our luxurious jewelry.”
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Last week, the who’s who of Vietnam were stunned
by the news that a businessman in Ho Chi Minh City
purchased a Rolls Royce for more than $600,000.
The news emboldened other rich businessmen to
ride in luxurious limos, like Maybach, Aston Martin
and Bentley.
BLACK