US groups getting busy in the ASEAN

07:00 | 04/03/2020
American corporations are pushing trade and investment into Southeast Asia, especially Vietnam, enhancing bilateral economic ties.
us groups getting busy in the asean
US groups getting busy in the ASEAN

The US-ASEAN Business Council (USABC) has just announced that a 40-strong business delegation from the United States will launch an investment promotion programme in Vietnam on March 3-6, aiming to expand trade and investment co-operation in the Southeast Asian country.

Meanwhile, 460 US corporations have been allowed to export meat to Vietnam, according to Vietnam’s Deputy Minister of Agriculture and Rural Development Le Quoc Doanh, who was at a roundtable with representatives of associations and US investors in Washington D.C. on February 24. “Currently, there are 210 others registering to export seafood to Vietnam,” he said.

Over the years, the US has been Vietnam’s third-biggest trade partner while Vietnam is the 16th biggest for the US.

According to the General Department of Vietnam Customs, in January Vietnam’s total value of exports to the US reached $4.7 billion while the US exported to Vietnam $988 million in goods. In 2019, the numbers were $61.35 billion and $14.37 billion, an increase 29.1 and 12.7 per cent respectively compared to 2018.

Meanwhile, according to the USABC, the ASEAN ranks fourth as a goods export market for the US, while the US is also the fourth-largest trading partner for the ASEAN. The US exported $75 billion in goods and $31 billion in services to the ASEAN last year, up 59 per cent over a decade. The total value of US-ASEAN bilateral trade has increased 28 per cent, from $177 billion to $227 billion in a decade.

Along with trade, the number of US investors choosing the ASEAN for their long term operations has increased recently.

Last week, GE Renewable Energy signed a contract with Angat Hydropower Corporation to rehabilitate the 218MW Angat plant located in the Philippines to limit power outage of the 53-year-old plant as much as possible. Once fully upgraded in 2023, the power output of the plant will increase by around 4 per cent, bringing it to 226.6MW, supplying more than 90 per cent of Metro Manila’s potable water needs and supporting the irrigation of 25,000 hectares of farmland.

Meanwhile in Singapore, by the end of last year GE had invested $60 million over 10 years in its current Global Repair Service Center to create a new high efficiency air-cooled (HA) global repair engineering and development centre to add approximately 160 highly skilled jobs and provide local support for HA power plant operators in Asia. It will become GE’s largest gas turbine repair site, servicing its HA and aero-derivative gas turbines.

Earlier, in a meeting with Vietnam’s Deputy Minister of Planning and Investment Vu Dai Thang, Wouter Van Wersch, chairman cum CEO of GE ASEAN said that the group plans to expand investment into important fields which contribute to development of socio-economy in Vietnam such as energy, renewable energy, solar power, electrification and liquefied electrification.

GE currently has a presence in all ASEAN member states, excepting Laos, becoming a partner for dynamic growth in the region.

Google is another case planning to land in the Southeast Asia. According to Nikkei, so far the giant has been also moving aggressively to shift production of its Pixel smartphone from China to Vietnam where the corporation will build a low-cost supply chain in region that will serve as a springboard for its growing hardware ambitions.

Accordingly, Google will raise production capacity to 8-10 million smartphones this year, double that of last year.

Not only Google, the US car rental group Hertz with more than 10,000 branches in the world in last August announced its entry into the Vietnamese market through its domestic franchise partner, New City Rent A Car, to provide guests with a range of moving services and convenient car delivery system.

Eoin MacNeill, vice president of Hertz Asia-Pacific, emphasised that Vietnam had been evaluated as a country with a high growth rate in terms of both economy and tourism so opportunities for groups like Hertz are vast. Along with this fast and vibrant development, the demand for car rental businesses is increasing, and the demand for professional service quality is also greater.

Data from the Foreign Investment Agency under the Ministry of Planning and Investment shows that from the start of the year to February 20, the US has 18 new projects registered at $8.5 million. Total US newly-registered, newly added, and stake acquisition investment was $42.19 million.

Meanwhile the United Nations Conference on Trade and Development’s ASEAN Investment Report 2019 indicated that although the total capital poured into the region from the US declined compared to the previous year, the ASEAN was still the first selection for many US investors, with Singapore and Indonesia named the most attractive destinations.

By Phuong Hao

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