German Firms more Interested in Investing in Vietnam, Says GIC Trade Officer

Vietnam Business Forum has an interview with Mr Wolfgang Ehmann, Chief Representative of Trade Officer German Industry and Commerce in Vietnam (AHK), on the occasion of the 6^th Germany-Vietnam Dialogue Forum to be held in Chief Representative of Trade Officer German Industry and Commerce in Vietnam (AHK), on the occasion of the 6 Germany-Vietnam Dialogue Forum to be held in Hanoi on 27 March 2006.

Could you tell us about the main purpose and activities of the Trade Officer for
German Industry and Commerce Vietnam?

German Industry and Commerce Vietnam (GIC) is a member of the worldwide network of some 120 overseas bi-national German Chambers of Industry and Commerce (AHK) in more than 80 countries under the umbrella of the Association of German Chambers of Industry and Commerce (DIHK) in Berlin. We have been present in Hanoi since 1993, and in Ho Chi Minh City since 2005. We are a private, neutral and non-political organization with the public mandate to promote bilateral trade and investment between Germany and our host countries. Our services focus on business consultation, business partner search, event organization, publications, market intelligence, database research, trade fair related services, trade enquiries and mediation of commercial disputes.

 

I have the statistics, Germany is ranked 19th. We have about 300 million US dollars invested in Vietnam. However the number does not really completely reflect the investment activities of German companies in Vietnam because some of the investments are directed through third countries like Holland, Singapore, and Hong Kong, so probably our position is better than number 19, but that's where we are standing today.

 

Definitely yes. First of all you have to bear in mind that investment follows trade. The companies that are coming here want to see whether there is a market for their products. They want to see if they can do business here, if and how they can do business in Vietnam, and once they are comfortable they will think about investments. Secondly, in the region, China is the undisputed number one investment destination. You have in one year as much as 50 billion dollars a year in investments, which is the total investment in Vietnam since 1988. So, that means China can absorb in one year what Vietnam has in the last 15 years. Of course you are a smaller country but also a very promising country, a very promising market. We see that particularly for our clients who are mostly small and medium size companies, Vietnam with its environment, we have a lot of German speaking Vietnamese living here, in many ways it is easy for them to do business here because it's smaller and its orientation seems to be easier.

 

Yes, we have this kind of event quite regularly. Last year, we had four or five matchmaking events. We will have the next two delegations coming at the end of March; we have one in April and one in May, and again in September. Sometimes they come on short notice and so Vietnam is definitely high on the list of priorities, companies are very keen to know about the opportunities here. For the last two years we have seen a dramatic increase in activities; foreign investment is returning. But compared to the years between 1996 to 2002 it was extremely quiet as far as visitors and delegations from Germany were concerned. Of course during the Asian crisis it was a very different situation, but for the last two years have had very good response. The Vietnam-related events in Germany are receiving good responses; we had Vietnam day last year in November in Berlin with about 200 participants. We do country presentations quite regularly; we have about 20 Vietnam events every year. So the organizers are quite keen because they have so many China-related events that they are quite happy that there is somebody else coming. There is great interest in Vietnam.

German Industry and Commerce Vietnam is proud to make the announcement of the visit of two German business delegations to Vietnam from 26 to 30 March 2006. The delegations will be led by the German Federation of Industrial Research Associations “Otto von Guericke” (AiF) and the International Trade Marketing GmbH (ITM). The group of eighteen companies operating in the fields of construction, engineering, trading, energy, environment, electric/electronics will present their products in individual meetings. The matchmaking days in Hanoi (27 March 2006) and in Ho Chi Minh City (29 March 2006) will bring German and Vietnamese companies together to explore opportunities for business and mutually beneficial cooperation. The visit coincides with the 6^th German Vietnam Dialogue Forum to be held in Hanoi on 27 March 2006.

 

They should have someone who speaks a foreign language; that's just one condition. The company should have some exposure to international business. It's extremely difficult to establish cooperation between two companies that have no international experience for example if they participate in exhibitions abroad, if they know how to do international business they have to have some concept. Communication is extremely important. Financing is an important factor, and we know that it is difficult for the Vietnamese companies – although for German companies it is the same - to obtain finance from the bank. For Vietnamese companies here it is maybe more difficult. But most importantly I believe both parties have to be willing to cooperate. We have a saying that "where there is a will there is a way" and then you can achieve practically anything. What I see here is that there are quite a few companies who have the beginnings of a business relationship, and I am quite confident that we will see more of them coming back. It's important that companies come to visit Vietnam. They need to talk to the companies here. You can do some by remote email, telephone, fax and so on, but they need to see country, the people and the companies. It's a matter of building confidence on both sides.

 

There is no other country in the region that has such a high density of German speakers, and such a close relationship because of the history with the former GDR. Tens of thousands of Vietnamese lived in Germany, were educated there, contract workers who lived there, and many German-educated Vietnamese are in high positions in the Vietnamese administration. This is definitely a big bonus for Germans doing business here. The language, the culture, the brand names, you don't have to explain that. They know that, they know German companies, and this is a big bonus. But we are still doing business and the Vietnamese companies are doing business, so they look at the prices, delivery service - assuming they buy something from a German company - and we as Germans are in competition with suppliers from Asia, from Europe, and worldwide. And particularly in the field of industrial goods it's often the Asian competition that can give much better prices. But we know, and our Vietnamese friends here always tell us, that they like German products they want to buy from us, they would like us to invest in Vietnam, so we have a very close friendly relationship.