New Cooperation Fields Open to Vietnamese, Sri Lankan Businesses

 

The Ceylon Chamber of Commerce’s business delegation, led by Mr Anton Godfrey, Chairman of Sri Lanka - Vietnam Business Council, consisted of 15 members. The visit aimed to have direct meeting, exchange information and seek import opportunities in Vietnam, as well as create opportunities for the two business communities to cooperate in the fields of medicine, health care, real estate, seafood, agricultural machinery, automobile, information technology, chemical, paper, confectionery, general trading, and others.

Speaking at the forum, Mr Hoang Van Dung, Standing Vice President of VCCI, said: The working visit by the business delegation organised by the Sri Lanka National Chamber of Commerce and Industry was the first step to boost two-way trade in the coming time. The presence of nearly 80 Vietnamese enterprises operating in different industries showed their keen interest in the Sri Lanka market. “They want to directly exchange information and look for opportunities to do business with Sri Lankan companies,” he said.

 

Mr Asoka Hettigoda, President of the National Chamber of Commerce and Industry of Sri Lanka, said that Sri Lankan businesses are strong in tea, pepper and spice products. They wanted to seek opportunities to import goods from Vietnam, as well as opportunities to invest and cooperate with Vietnam enterprises in the fields of medical equipment, hospital, hotel, pharmaceutical, garment - textile, coconut, tea, rubber, precious stone, cable, iron sheet and others.

 

He asserted that the National Chamber of Commerce and Industry of Sri Lanka, the leading trade promotion agency in Sri Lanka, is committed to creating conditions to support the businesses of both sides to promote two-way trade growth.

 

According to an official from the Africa, West Asia, and South Asia Markets Department under the Ministry of Industry and Trade, Vietnam and Sri Lanka established formal diplomatic relations in 1970. The two countries signed many cooperation agreements and documents such as Trade Agreement; Agreement on Double Taxation Avoidance; Agreement on Investment Promotion and Protection; Memorandum of Understanding on Machine Manufacturing between the Vietnamese Ministry of Industry and Trade and the Sri Lanka Ministry of Agriculture and Commerce; Memorandum of Understanding on Oil and Gas Cooperation between the Vietnamese Ministry of Industry and Trade and Sri Lanka Ministry of Industry and Prime Minister’s Secretary Office; and the Memorandum of Understanding on Bilateral Investment Encouragement between the Vietnam Foreign Investment Agency and the Sri Lanka Foreign Investment Agency.

 

Economic and commercial cooperation ties, especially industrial and commercial cooperation, have developed rapidly in recent years. The Vietnam - Sri Lanka Joint Committee was established in 2003 and the latest meeting was held in Colombo City, Sri Lanka in 2009. Currently, Sri Lanka has some investment projects in Vietnam, although of small scale, including desiccated coconut factories, textile factories and cement plants. Vietnam also has investment projects in Sri Lanka, including tractor, agricultural machine and parts manufacturing plants. Lately, Vietnam’s PV Oil reached an oil purchase agreement with Sri Lankan partners.

 

By implementing the above agreements and memorandums, bilateral trade has expanded rapidly and sustainably. The two-way trade turnover increased from US$53.7 million in 2007 to US$113.3 million in 2011, up 22 percent from 2010, of which Vietnam’s exports were worth US$83.4 million, up 34 percent, and Sri Lanka’ exports valued US$29.9 million, down 3.36 percent.

 

Some commodities made breakthroughs in 2011, especially fertiliser, the biggest export of Vietnam to Sri Lank in the year. Other fast-growing exports included computers and electronics products, clinker (up 226 percent), and chemical products (over 300 percent). In addition, beer was exported to this market for the first time and revenues reached US$6.5 million, ranking fifth among Vietnam’s exports to this market.

 

On the import side, in 2011, animal feed and raw materials were the biggest import of Vietnam from Sri Lanka, with US$24 million, up 13.52 percent over 2010, and equal to 80 percent of Vietnam’s imports from the Asian market. Other commodities also had high growth rates in the year but revenues were still very low. Cloth import turnover shrank over 85 percent.

 

In October 2011, at the invitation of the Sri Lanka President, Vietnamese President Truong Tan Sang paid a State-level visit to Sri Lanka. The two leaders agreed on the goals that the two countries will strive to achieve in the coming years, including bringing bilateral trade turnover to US$1 billion by 2015; organising shuttle delegations to study a preferential trade agreement (PTA); facilitating trade, including the determination and eradication of non-tariff barriers and simplifying mutually recognised standards; and developing comprehensive energy cooperation, including exploring, exploiting, and sharing technology and experience.

 

According to the Vietnamese Ministry of Industry and Trade, to realise these objectives to boost two-way economic and commercial development cooperation, business communities of the two sides need to utilise such information channels like the Sri Lanka - Vietnam Business Council, embassies and other entities. The two sides must step up the search for investment cooperation opportunities in advantageous fields like oil and gas, machinery and equipment manufacturing, agriculture, fisheries and construction material.

Besides, according to the ministry, the two sides need to organise more workshops and symposiums for authorities and businesses to exchange information and experience of business cooperation, and organise trade promotion and market research activities in each country.