African and Middle East Markets: Doors Opened for Vietnamese Companies

Vietnamese goods, particularly rice, have secured a strong foothold in African and Middle Eastern markets and won the trust of consumers there. Some Vietnamese companies are opening the way to African countries with direct investments. A typical example is the military-run telecom Viettel Group. Its affiliate Viettel Global set up Movitel joint venture with Mozambican partner SPI&Invespar where the former keeps 70 percent of the stake and the latter owns 30 percent. To promote trade and investment ties with these potential markets, the formation of the Vietnam - Africa - Middle East Business Forum is the right step to realise the policy of the Vietnamese Government. In order to gain a deeper insight into the action plans of the Forum, Vietnam Business Forum conducts a face to face interview with Mr Le Dang Dung, Chairman of the Vietnam - Africa - Middle East Business Forum and Deputy General Director of Viettel Group. Do Anh Son reports.

 

I am now sure that Africa and the Middle East are potential markets for Vietnamese companies for the following reasons. First, this is a huge consumer market with a population of about 1.3 billion people (1 billion people in Africa and 300 million people in the Middle East). Particularly, Africa is a continent that is very rich in natural resources and is a virgin market for Vietnam, and the Middle East is an upscale market with abundant financial resources.

 

These markets also have high potential because they very suitable for Vietnam, as consumers there have good feelings for Vietnam. They admire Vietnam for its victories in two world-acclaimed resistance wars and its achievements in national construction. Importantly, Vietnam has set up political relations and signed many bilateral agreements with many African and Middle Eastern countries.

 

At present, export turnover in each market has soared to US$2 billion a year. However, apart from trade, there is vast room in the African market for Vietnamese companies, particularly in telecommunications, construction, agriculture and forestry. Vietnamese companies can also search for financial sources in the Middle East market.

 

First of all, the Forum plays an important role in providing information. Businesses have to spend much time seeking information although their results are not always accurate. Therefore, the Forum needs to focus on building an information base to help businesses and the launch of a website portal is key for this. The Forum will organise seminars and business meetings to provide multi-dimensional information.

 

Second, the Forum will guide and encourage companies to make bold investment decisions. Currently, many of them are still sceptical about these two markets. Besides, the Forum will necessarily establish a senior advisory council soon to provide professional, legal, financial and other supports for enterprises, aiming to make them confident enough to set up relations with these markets.

 

Another important target is to set up relations with governments. The Forum will play a catalytic role and exert influence on governments to adopt policies in support of trade and investment.

 

I think the Forum will have to do some tasks immediately: Building the new website with the following criteria of usefulness (more information), diversity, accessibility and attractiveness (with entertaining and relaxing columns); Building industry-specific and market-specific approach strategies; Reforming meetings and visits to boost efficiency; and increasing influence on governments with the purpose of creating business-supporting policies.

 

Any business wants to exist forever right from the moment of incorporation. To exist, it must have a market. The domestic market is just for short-term objectives. To have a vast and long-term market, it must go worldwide. Viettel defines foreign investment as a long-term goal to ensure its sustainable development.

 

Currently, in addition to the Vietnamese market, Viettel has invested in five other countries: Laos, Cambodia, Haiti, Peru and Mozambique. By 2015, Viettel expects to have a vast investment market with a total population of 300 to 400 million people, standing among the Top 10 foreign investors in the world. At that time, overseas revenues will exceed domestic revenues.

 

Many have asked me why Viettel has to invest abroad. Viettel’s answer is: Viettel wants to lift Vietnam's position in the world. The world surprises and admires Viettel, as it dares to invest in the countries where other companies in the world hesitate, e.g. Haiti, or in countries richer than Vietnam like Peru. Viettel wants to compete directly with world-leading rivals like Vodafone, Orange and Telefonica. Moreover, overseas investment increases the value of the Viettel brand. Actually, as soon as Viettel invests in foreign countries, its brand value increases.

 

To date, Viettel has won a lot of international awards thanks to its reputation in overseas investment. And, overseas investment is an effective method to train human resources for Viettel. An overseas working environment which is different in culture, language and marketing strategies provides valuable experience for Viettel staff.

 

I can summarise the success of Viettel and, I think, it is probably a lesson for other businesses to refer to before investing abroad: “Think big - Go straight - Find opportunity - Decide investment - Succeed."

 

Viettel also knows risks in the African market and manages to address them. The risks arise from political instability: Multiparty; cultural difference; harsh climate; operating conditions (shortage of electricity and infrastructure), unclear telecommunications and investment policies.

 

However, I believe that Vietnamese enterprises will be successful in this market if they identify their overseas investment strategies, survey the market carefully (the Forum can help with information and industry-specific strategies); and set up high-level government relations (they can seek assistance from the Forum, Vietnam Chamber of Commerce and Industry (VCCI), the Ministry of Foreign Affairs (MOFA) and other agencies). Especially, according to Viettel’s experience, investment decisions must be made quickly and resolutely. They should not rely too much on their partners.

 

I think the African and Middle Eastern markets have opened the door to all Vietnamese enterprises. And, I hope Africa and the Middle East will become as familiar as home markets for Vietnamese companies by the end of my first term at the Forum. Currently, very few Vietnamese companies invest abroad like Viettel. I hope to see a brighter outlook for Vietnamese investors in African and the Middle Eastern markets.