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|PM Nguyen Xuan Phuc held bilateral talks with Indonesian President Joko Widodo, photo VNA|
Since May this year, Real Estate Indonesia (REI) has been seeking opportunities to pour hundreds of millions of US dollars into property projects in Vietnam, such as hotels and resorts. REI is a nationwide group with more than 5,000 members across Indonesia, including developers of all sizes.
Indonesian Ambassador to Vietnam Ibnu Hadi told VIR that both countries are boosting co-operation in the construction industry. Many construction and property businesses have been showing great interest in the Vietnamese market, where they see the growing demand for investment. Among them are Ciputra Group, Semen Indonesia, PT. Wijaya Karya (Persero) Tbk, and PT. PP (Persero) Tbk.
According to Budiarsa Sastrawinata, general director of Ciputra Westlake City Development Co., Ltd., Hanoi is a potential market for complex investment projects, while Ho Chi Minh City is also a major property market – though the competition among those seeking to invest there is currently far tougher. “Hanoi is a developing city and therefore investment in major development projects around the capital is promising,” Sastrawinata said.
Last week Prime Minister Nguyen Xuan Phuc paid a working visit to Indonesia. He held talks with Indonesian President Joko Widodo, with both sides vowing to continue facilitating enterprises of both countries to do business in their respective territories. This is aimed at boosting investment ties and reaching a bilateral trade turnover of at least $10 billion by 2020.
During this visit, Nikko Indonesia and Vietnam’s Licogi 16 inked a co-operation deal on infrastructure development. Under the deal, both companies will construct in Indonesia a 6.7 kilometre expressway worth $200 million and a $50 million project to build a financial centre building. These are the first infrastructure projects that a Vietnamese company will implement in Indonesia.
Nikko will also invest into Licogi 16’s 50 megawatt, $50 million solar power project in the central region of Vietnam. All these three projects are expected to begin construction in early 2019.
However, besides property and construction, Indonesian investors also want to do business in Vietnam in many other sectors. Those include fertilizer producer Pupuk Indonesia, Telekomunikasi Indonesia, pharmaceutical Kimia Farma oil and gas group Pertamina, Bukit Asam mining company, and even aircraft manufacturer Dirgantara Indonesia. Vietnam and Indonesia have also considered digital technology one of the latest co-operative sectors for both countries. Last month, Indonesian ride-hailing firm Go-Jek launched its services in Hanoi under the brand Go-Viet, as part of its $500 million international expansion. The on-demand Go-Viet app – driven by a Vietnamese company and with Go-Jek providing the technology, expertise and investment – offers services ranging from transport and logistics to food-delivery and mobile payments.
Earlier, Go-Jek began its plan to raise its rivalry with Grab in Vietnam by expanding operation to Ho Chi Minh City.
A year ago, Intra Asia Indonesia signed a memorandum of understanding on coal trading and seaport investment with Vietnam’s Hong Phat Group. Intra Asia Indonesia wants to build a $1 billion coal port in Vietnam’s central region.
Director Samal Abdul Nasir Bamadhaj told VIR that Vietnam’s free trade agreements, fast economic growth, stable political climate, improved business environment, and large demand for infrastructure are “greatly attracting not only Intra Asia Indonesia, but also many other Indonesian investors.”
A new action plan for a Vietnam-Indonesia strategic partnership for 2019-2023 was inked by the two countries last month. The plan covers many co-operative sectors such as politics, economics, trade, investment, culture, the society, and maritime issues. More recent and modern sectors are also included in the plan, such as digital technology, intellectual property, and connectivity in seaports and airports. Vietnam and Indonesia have also committed to effectively deploying a deal in farm produce and will consider founding new joint ventures in aquaculture, wood processing and furniture export, and expanding tourism co-operation, especially sea and island tourism.
Vietnam-Indonesia trade turnover hit $5.3 billion in the first eight months of this year – up 27 per cent year-on-year – and Ambassador Hadi expects the figure to reach $8 billion for the year as a whole, $9.2-$9.3 billion next year, and over $10 billion in 2020. Currently, Vietnam has 72 Indonesian investment projects registered at $583.28 million.