Vietnam - Netherlands: Natural Partners in Many Fields

The Netherlands and Vietnam established diplomatic relationship in 1973. Recently in 2013, the two countries celebrated 40 years of diplomatic relations. However, as far as we have recorded, the Dutch were trading with central and northern Vietnam as early as the 17^th century. The Dutch East India Company (VOC) established a trading post in Hoi An in 1632, and another in what was then Pho Hien (between Hanoi and Haiphong) in 1637. Taking these above as examples, I would like to highlight that besides the diplomatic point of view, the two countries’ relations are backed up by long trading history. This could be explained by the similarities that the two countries boast: We are both top exporters of agricultural products. We are both strategically located coastal states with a strong position in shipbuilding and logistics. We both face challenges of climate change as delta countries. We are also energy rich countries. No wonder the Netherlands is Vietnam’s largest EU investor and third largest EU trading partner. In 2013, two-way trade totalled US$3.6 billion. By the same year, the Netherlands ranked 11th among 96 countries and territories investing in Vietnam with 192 projects worth nearly US$6.3 billion.

 

From my point of view as Chief Representative of ING Bank N.V. Hanoi, Chairman of Dutch Business Association in Vietnam (DBAV) and Deputy Chairman of European Chamber of Commerce in Vietnam (EuroCham) – because that was your question – Vietnam-Netherlands bilateral relations will develop rapidly in the upcoming years as Vietnam is at very exciting period of growth, and the relationship should benefit from the FTA which is expected to be signed in 2015. Strategically located in the region, Vietnam serves as the gateway to other regional markets in South East Asia. Your country also boasts a 90 million-strong, young, brand-aware population. As the largest European Union investor in Vietnam, with a good reputation, Dutch companies can benefit strongly from your country’s growth. Especially, once the EU-VN FTA is signed in 2015, it will give a fresh impetus to the relations between Vietnam and European countries. This will increase the opportunities for the Netherlands even more.

 

Agri-food and horticulture, delta and water management, ship-building, energy, transport and logistic are major sectors that I would like to emphasize.

 

First of all, agri-food and horticulture is one of the most important cooperation sectors of the two countries. An agriculture and food security partnership agreement was signed during our Prime Minister's visit to Vietnam in June 2014. Business opportunities are abundant at all levels of the value chain. Especially, once the EU-VN FTA is signed, the qualities of Vietnamese agricultural products exported to EU will be guaranteed with stricter standards. So far, a number of Dutch companies in the sector have achieved successes in Vietnam, including De Heus, Fresh Studio, Friesland Campina, DSM and Nutreco, to name a few.

 

In terms of delta and water management, both countries are working together on the development plan called ‘Ho Chi Minh City moving towards the sea with climate change adaption’. The implementation of these plans do provide interesting business leads for Dutch companies with expertise on delta technology, urban water management, water technology and capacity building. Another example is the cooperation with the City of Rotterdam, which allowed Ho Chi Minh City to develop its own climate adaptation strategy in 2013.

 

Besides, Vietnam’s shipbuilding sector is an interesting location for Dutch shipbuilding companies. The state-of-the-art Damen Song Cam shipyard in Haiphong, which is reported to produce about 80 ships per year, providing jobs and income to thousands Vietnamese, and the C. Steinweg Bonded Logistics Hub, are a few excellent examples of Dutch and Vietnamese joint venturing in the industry.

 

In terms of energy, Vietnam’s growing energy sector expansion with improved energy infrastructure, is providing interesting business opportunities for Dutch companies active in the oil and gas sector, water sector and related areas. Some big Dutch firms like Royal Dutch Shell, Royal Haskoning and Van Oord Dredging, Witteveen + Bos, Evides Water re important partners of key projects in Vietnam. Another example is ING Bank which was the mandated lead arranger for Vietnam’s largest private sector power project - Mong Duong 2. ING established a Representative Office in Hanoi in 2012 to facilitate the cross-border commercial banking needs of its multinational and local Vietnamese clients looking to expand beyond their domestic markets.

Besides the above mentioned companies specializing in the major sectors of cooperation, many Dutch foreign direct invested companies have gained achievements in expanding their presences in Vietnam. Their brands have also become welcome to Vietnamese such as Philips, Akzo Nobel, Unilever, Heineken and TNT.

 

The similarities between our countries not only make us natural partners in many fields, but also constitute an advantage for Dutch businesses when investing or setting up their business in Vietnam. Also, both the Netherlands Embassy in Hanoi and the Consulate General in Ho Chi Minh City are very active in supporting Dutch companies. So far, Dutch companies have received great support from a wide range of instruments developed by our Government while they do business in Vietnam.

 

However, it is still true that the figures of investment in Vietnam remain modest compared to the potential between the two countries. The reasons could be partly explained by the challenges that our businesses face when operating in Vietnam. For instance, while Vietnam is known for its political stability, the legal system still lacks transparency; The demographic differences across regions, for instance, the North and the South; urban and rural areas are also a challenge. Moreover, the underdeveloped infrastructure and energy supply affect sectors where Dutch companies excel. In my opinion, more favourable conditions for Dutch projects created by Vietnam’s Government would help introduce Vietnam to other investors in the Netherlands.

 

The Dutch Business Association in Vietnam (DBAV) is an independent and non-profit organisation active since 1999. We actively promote stronger business relationships between the Dutch and Vietnamese business communities through events and collaboration. So far we have maintained very close links with the Netherlands Embassy in Hanoi and the Consulate General of the Netherlands in Ho Chi Minh City. DBAV is also a partner of European Chamber of Commerce in Vietnam (EuroCham). Through business and community activities, we provide support for our members for their business successes in Vietnam.

 

At the same time, DBAV is very active in supporting Dutch companies who have plans to invest in Vietnam or are considering starting activities in the country, with advice on market insights, opportunities that Vietnam economy offers, how to succeed in Vietnam, and more. For new market entrants, we work closely with our Embassy and Consulate General which are both very active in supporting the Dutch business community and, if and when required, with the Vietnam Chamber of Commerce and other business chambers to advise these companies on their moving plans, providing them with local set-up guidance and experiences of doing business in local market.

 

As mentioned, the upcoming EU-VN FTA will open up even more opportunities for Dutch investors, as Dutch companies will benefit strongly from your country’s growth. That’s why we collaborate with the Vietnam Chamber of Commerce in the Netherlands to attract even more attention from Dutch companies to the market.

 

In 2012, DBAV introduced the new concept of business networking called NetPlus (a joint European business network). The series of NetPlus events have been very well-received among the European business community in Vietnam. Therefore, in 2015, besides NetPlus activities, further seminars/talks on doing business in Vietnam will hopefully be organised in collaboration with other chambers.

 

Our Double Dutch publication will be available in a digital version, and we will also invest in further engagement with our members. One of our initiatives in 2014, to engage with our members through the monthly newsletter, has been very well-received by members. The newsletter collates important news that is of interest to Dutch companies, as well as updates readers with our members’ big events and announcements.

For CSR activity, we started Dutch Open, a business golf tournament, 6 years ago and positioned it as one of the most unique prestigious business golf tournament in Vietnam. Now it is a charity-driven event. In 2014, we raised more than VND210 million for underprivileged children. In 2015, we aim for another successful Dutch Open to raise even more money for Vietnamese children.