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Vo Quang Hue, managing director of Robert Bosch Vietnam, talks with VIR about the firm’s further expansion plans.
What are some highlights Robert Bosch has enjoyed in Vietnam, especially in 2012 ?
Robert Bosch has been one of a few foreign-invested companies to strongly develop sales and production, as well as research and development (R&D) in Vietnam. We also expanded our product portfolio across all of our various business divisions which are Automotive Aftermarket, Drive and Control Technology, Power Tools, Security Systems, Solar Energy, and Thermotechnology in order to support the sales in Vietnam. Moreover, Bosch has invested into two big projects in Vietnam - a pushbelt manufacturing factory in Dong Nai province and a R&D centre in Ho Chi Minh City that provides hi-tech solutions such as embedded software, mechanism design and information technology services.
In 2012, we focused on these two projects. However, we did not forget other important duties. While we introduced new products in Vietnam, we also expanded our distribution network and opened a new office in central Da Nang city. Apart from that, we opened an after-sales service center for hydraulic products in Ho Chi Minh City. Despite the economic challenges in 2012, Robert Bosch still grew positively. The business performance of Bosch in Vietnam for the fiscal year 2012 will be announced at a later date sometime in the middle of this year.
So, what is your plan this year?
We want to expand our distribution network and introduce many new products into Vietnam, especially in the automotive aftermarket where we want to cooperate with local partners to set up more Bosch Car Services and Express Car Services nationwide. In addition, Robert Bosch will continue to increase investments into the hi-tech plant in Dong Nai by constructing a new workshop and setting up new production lines in order to increase the output capacity and to meet the growing demand in the market.
Vietnam is a new and dynamic market with huge growth potential for Bosch . Thus, we will continuously expand our business and investment here, not only in 2013 but also in upcoming years. Apart from increasing investment capital in Dong Nai, we will continue expanding the R&D centre in Ho Chi Minh City that is to recruit more than 2,020 engineers by 2020. To meet this goal, the recruitment and training of local talents are essential activities for Robert Bosch in Vietnam. We are also planning to build a vocational training centre at the plant.
Specifically, on January 27, Bosch Vietnam and LILAMA 2 Technical and Technology College agreed on cooperating in the setting up of an apprenticeship programme to provide Technical Industrial Apprenticeships according to German vocational training standards to Vietnamese students. This collaboration reflects a strategic avenue for us to source for highly skilled talent to join our hi-tech plant in Dong Nai in the future.
Robert Bosch announced a plan to raise its investment capital in Vietnam to €230 million by 2015. What will you do with this sum?
We are glad that Bosch is taken as a good example for fulfilling all investment commitments under its investment registration. The total disbursed investment until the end of 2012 was approximately €100 million which in fact was three years earlier than the initial commitment.
For 2013 and 2014 we are planning to construct new production workshops as well as to import new equipment and machinery which will enable us to expand production to producing 5.7 million units per year. In other words, we are ready to increase investment capital in the hi-tech plant to €230 million by 2015.
To expand investment in Vietnam, Robert Bosch proposed the Vietnamese government recognise your company as a hi-tech enterprise that will give it more preferential incentives. Have you received positive signals from the Vietnamese government?
The prime minister last year assigned the Ministry of Planning and Investment (MPI) to cooperate with other governmental authorities to study and appraise our hi-tech plant in Dong Nai. This brought a positive result as the Ministry of Science and Technology sent us a document on December 11, 2012 saying that Robert Bosch investment in Dong Nai meets all criteria of being a hi-tech project. We learned that the MPI collected recommendations from other authorities and sent a petition to the Prime Minister for granting incentives to our expansion investment in Dong Nai. We expect to obtain an approval from the Prime Minister for granting incentives to our expansion investment in a short time. We will file an application for receiving the investment certificate as committed.
How should the Vietnamese government adjust its tax policy to encourage more foreign hi-tech investors?
I learned that the Vietnamese government is going to propose to the National Assembly to allow foreign investors to enjoy tax incentives. This is a positive policy that foreign companies, especially European companies, proposed in a White Book 2013 issued by the European Chamber of Commerce. Vietnam should not only encourage new investment, but also encourage foreign investors to expand existing projects, particularly in the manufacturing industry. I believe the new tax policy, once it takes effect, will enhance Vietnam’s competitiveness of being an attractive destination for manufacturing investments.
Besides that, the automotive industry is a particularly important strategic sector that Vietnam should focus on. The country should have a special policy to boost the development of the automotive supporting industries to support growth in this sector in the next two decades. Given our experiences in Vietnam over the past years, we believe that the Vietnamese government will continue to strongly support companies in hi-tech industries.