Why Vietnam is such a magnet for baht

[webfact]

Why Vietnam is such a magnet for baht

By The Nation

 

 

Thailand is being left behind when it should be learning from the success story to its east

 

Vietnam has attracted a growing number of big Thai corporations to invest in its huge domestic market of 96 million people, a new trend that should be closely watched by Thai economic planners. While Vietnam’s GDP is half the size of Thailand’s – US$223 billion to $455 billion in 2017 – its economy has for years been growing at a much faster rate, averaging 6-7 per cent per annum. 

 

Given fresh economic and business opportunities beyond our borders, major Thai conglomerates including CP, ThaiBev, Central, Boon Rawd, PTT and SCG have lined up to invest hundreds of billions of baht in Vietnam. 

 

ThaiBev, for example, recently announced plans to invest a combined Bt200 billion-plus in various sectors there, from beer and other beverages to retail and manufacturing. Its biggest investment, Bt156 billion, is in Saigon Beer, in which ThaiBev acquired a 56-per-cent equity stake. That was followed by a Bt28-billion investment in a major Vietnamese cash-and-carry retail chain. Berli Jucker, a unit of ThaiBev, has meanwhile invested in a multibillion-baht glass-bottle plant and other ventures in Vietnam.

 

CP group is expanding its food and agriculture business in Vietnam with a US$250-million investment plan for chicken farming and processing, among other ventures. Central, the retail conglomerate, has designated Vietnam as its “second home” market after investing a combined Bt50 billion over the past few years. Its latest investment plans, covering 2018-2022 and focusing on retail and other sectors, are worth Bt16.5 billion.

 

PTT and SCG have boosted their investment in heavy industries as well as the energy and petrochemical sectors, while Boon Rawd has invested Bt40 billion in Vietnam’s beverage industry. Other major Thai investors include the Amata group in the industrial estate sector; Gulf in the energy sector, the Wha group in industrial estates and B Grimm in renewable energy.

 

Obviously, Vietnam in the eyes of these Thai companies has a bright future, having opened up its economy to the rest of world just a couple of decades ago. First, it has a large domestic market of nearly 100 million consumers, which will fuel consumption and industrial growth in coming decades. Second, the country has a sizeable pool of labour, both skilled and semi-skilled, which will sustain its export-driven industries.

Thailand, on the other hand, is facing a rapidly ageing society and a workforce crisis stemming from decades of family planning and low birth rates. Together these will result in a steady decline in the number of workers and growing dependence on migrant labour.

 

Vietnam has also benefited from decades of relative political stability with its one-party rule, whereas Thailand has weathered years of political infighting that contributed to a slowdown in economic growth and private investment. At the same time, systematic corruption in Vietnam is said to be shrinking, and its provincial administrations have more authority than their counterparts in Thailand to grant promotional privileges to foreign investors.

 

Finally, Vietnam has a sharper focus on high-technology industries and belongs to multiple free-trade-agreement groups. 

 

The upshot of all of this is that it makes sense for Thai and other foreign investors to boost their presence in Vietnam. Thai entrepreneurs’ growing interest in Vietnam underlines their advanced maturity in branching out to overseas markets and seeking new opportunities and profits. Yet an increasingly successful Vietnam also offers Thailand several lessons on what it takes to make a comeback on the regional stage.

 

Source: http://www.nationmultimedia.com/detail/today_editorial/30355371

 

-- © Copyright The Nation 2018-09-28

[Samui Bodoh]

I was going to write a long, detailed blueprint for Thailand's future prosperity, but what is the point?

 

There are many, many reforms that are needed in Thailand, but in my eyes they all begin with getting the military back to the barracks for good; a country does not have a serious future if every few years the military walks in and steals power.

 

There is your starting point. Get that done and then work on the rest...

 

 

[PREM-R]

I wonder how many of the owners/major share holders in the Thai companies named in the OP are members of the, mostly Sino-Thai, families who are allegedly behind the repeated coups that have done so much damage to the Thai economy over many decades.

Edited September 27, 2018 by PREM-R

[zzaa09]

4 minutes ago, PREM-R said:

I wonder how many of the owners/major share holders in the Thai companies named in the OP are members of the, mostly Sino-Thai, families who are allegedly behind the repeated coups that have done so much damage to the Thai economy over many decades.

 

 

Shhhhh...

Don't spoil the fun, mate.

????

[shaurene]

Ye, many China companies are moving to Vietnam and setting up.

i love Vietnam, nice friendly people even the Police are very friendly and helpful.

[scorecard]

1 hour ago, PREM-R said:

I wonder how many of the owners/major share holders in the Thai companies named in the OP are members of the, mostly Sino-Thai, families who are allegedly behind the repeated coups that have done so much damage to the Thai economy over many decades.

 

And I wonder if some of the posters need to broaden their thoughts...

 

In regard to one giant Thai conglomerate (not Chinese-Thai owned) which already has massive and profitable activities in many sectors in Vietnam the Thai company is so impressed with the Vietnamese management that they have brought several of them to Thailand to lead sister companies / departments here in Thailand.

 

I've taught many of these folks in an executive MBA program in both Ha noi and HCMC, they are impressive, pleasant, polite, focused, achievement oriented, never afraid to discuss, advanced to perfect English. Run rings around 95% of the Thais in  local MBA programs. 

 

  

Edited September 28, 2018 by scorecard

[Eric Loh]

21 minutes ago, scorecard said:

 

And I wonder if some of the posters need to broaden their thoughts...

 

In regard to one giant Thai conglomerate (not Chinese-Thai owned) which already has massive and profitable activities in many sectors in Vietnam the Thai company is so impressed with the Vietnamese management that they have brought several of them to Thailand to lead sister companies / departments here in Thailand.

 

I've taught many of these folks in an executive MBA program in both Ha noi and HCMC, they are impressive, pleasant, polite, focused, achievement oriented, never afraid to discuss, advanced to perfect English. Run rings around 95% of the Thais in  local MBA programs. 

 

  

Having done business in Vietnam for many years, I do agree with you that the Vietnamese's work ethics and their desire for learning are heads above the Thais. My only disappointment are their corrupt public services sector and complying with burdensome and most times inefficient and also the excessive regulations and high number of regulatory inspections. Most times you have to grease the palms of the inspectors to get things moving. I personally have torrid times getting my chemical products registered.  

[Burma Bill]

Let us hope Thai Bev will reciprocate by selling BEER HANOI and BEER SAIGON in Thailand which, in my opinion, are far nicer than Chang and Leo. I bet they will not - protectionism. 

[Kaoboi Bebobp]

20 minutes ago, Burma Bill said:

Let us hope Thai Bev will reciprocate by selling BEER HANOI and BEER SAIGON in Thailand which, in my opinion, are far nicer than Chang and Leo. I bet they will not - protectionism. 

 

A few weeks ago I saw Hanoi beer on a promo card at Retox in Pattaya. Unfortunately, I was on the way out of Pats after breakfast so didn't have a chance to try it. Even though I live in VN, I haven't tried Hanoi beer since I haven't seen it in my small city on the southeast coast.

Edited September 28, 2018 by Kaoboi Bebobp

[Burma Bill]

3 minutes ago, Kaoboi Bebobp said:

 

A few weeks ago I saw Hanoi beer on a promo card at Retox in Pattaya. Unfortunately, I was on the way out of Pats after breakfast so didn't have a chance to try it. Even though I live in VN, I haven't tried Hanoi beer since I haven't seen it in my small city on the southeast coast.

Thanks for this and maybe a ray of hope. Both VN beers are similar based on French brewing recipes from colonial days.

[Kaoboi Bebobp]

On the main topic: more and more foreigners, particularly Aussies, have started major businesses and minor ones in Vietnam. What is helping a lot is the Vietnamese are becoming middle class and have a lot of money to spend. Where I live, more small hotels, shops and restaurants are going up, such that I can't keep up with all the new places. 

[NanLaew]

2 hours ago, shaurene said:

...even the Police are very friendly and helpful.

Are they buggery. They are even more corrupt than the tightshirts of LOS, and cost more too.

 

And the traffic cops use those swagger sticks regardless of you being a local or a visitor.

[NanLaew]

Compared with Thailand, Vietnam is a fiscal basket case. The fact that half a dozen Thai conglomerates are making money there is NOT indicative of any overall favorable Vietnamese investment climate.

 

Big fish, small pond syndrome.

 

I wonder why the Nation wrote this puff-piece for CP, ThaiBev, Central, Boon Rawd, PTT and SCG?

[CGW]

Just now, NanLaew said:

Compared with Thailand, Vietnam is a fiscal basket case. The fact that half a dozen Thai conglomerates are making money there is NOT indicative of any overall favorable Vietnamese investment climate.

This is my understanding also, everyone I have known that has invested and set up business in Vietnam has pulled out after a few years due to the excessive demands of the corrupt ................. There quote were that at least in Thailand they leave you some profit for yourself, in Vietnam they want it all! 

[NanLaew]

2 hours ago, scorecard said:

... I've taught many of these folks in an executive MBA program in both Ha noi and HCMC, they are impressive, pleasant, polite, focused, achievement oriented, never afraid to discuss, advanced to perfect English. Run rings around 95% of the Thais in  local MBA programs. 

And I have worked with and mentored many Vietnamese since 2005 and I agree that the brightest, most impressive ones that perform the best tend to perform even better outside Vietnam.

[NanLaew]

1 minute ago, CGW said:

This is my understanding also, everyone I have known that has invested and set up business in Vietnam has pulled out after a few years due to the excessive demands of the corrupt ................. There quote were that at least in Thailand they leave you some profit for yourself, in Vietnam they want it all! 

Well, they are just southern Chinese after all.

 

I was discussing this with a few guys who share a similar working, living and business negotiating experience in Vietnam. With the current gerontocracy of their politburo, stifling of dissent and vacillating over the South China Sea issue, China will find some sort of excuse to reclaim their southern states in around 25 to 30 years time.

[simoh1490]

17 minutes ago, NanLaew said:

Compared with Thailand, Vietnam is a fiscal basket case. The fact that half a dozen Thai conglomerates are making money there is NOT indicative of any overall favorable Vietnamese investment climate.

 

Big fish, small pond syndrome.

 

I wonder why the Nation wrote this puff-piece for CP, ThaiBev, Central, Boon Rawd, PTT and SCG?

I agree, their GDP performance has been very inconsistent since 2010.

https://tradingeconomics.com/vietnam/gdp-growth

[Cadbury]

An excellent article with a big message for Thailand. Unfortunately the uneducated muddle-headed military types live in some fantasy dream world of submarines, economic corridors and HS trains. I can think of one in particular who can't even put a coherent sentence together.

Thailand's big disadvantage over Vietnam (and some other ASEAN countries) is it's rapidly declining education standards which will further take its toll as time passes. By contrast the young people of Vietnam are striving hard to gain internationally recognised qualifications; not those types of Thai qualifications where "every player wins a prize" or "the more you pay the higher the qualification". Even Thai employers now have little respect for many of the dime dozen valueless academic qualifications.

I work in tourism in both Thailand and Vietnam and I can't even begin to compare the high work ethic of the Vietnamese to that of the Thais. They are poles apart.

I have just employed a young lady in Hanoi to work in my team. She has two degrees, one in Hospitality and Tourism and one in Economics. She is as sharp as a tack and sets demanding standards for herself. 

I am amazed at the transformation and growth of Vietnam over the last 10 years compared to that of Thailand. Thailand is losing serious investment and economic ground to Vietnam. Vietnam is busting at the seams with Taiwan and South Korean factories which could have gone to Thailand but didn't.

When Thai companies prefer to invest outside their own country but prefer instead to put their money into neighbouring countries the writing is on the wall. Economic growth in Thailand is stagnant due to population and education limitations and things are only going to get worse. Foreign investment with foreign labour is it’s only hope.

 

[connda]

Pretty sad when corporations in a 'developing' country are offshoring their businesses to a neighboring country.  I'd say that doesn't bode well for Thailand.

[Kaoboi Bebobp]

I live in a middle class neighbourhood in Vung Tau. The young kids on my little street are out running around, riding their bikes, bouncing basketballs, lifting weights, playing badminton -- so very active, smiling and laughing. I see in their faces a determination to learn, enthusiasm to go to school. There's one about a 100 metres behind me.

 

Many of them, only 5-7 years old, already know a little bit of English and always give me a smile, a wave and hello. Even a "how are you?" Walking past the school, they wave and say "good morning," "where do you come from." They're outgoing in a way that puts Thai kids in the shade.

 

Absolutely none of these kids are sitting on their butts staring into a smartphone. They go to school 7 days a week, English on weekends. Teacher friends report their kids in the language classes are engaged and rapt in their attention to the instruction. Feels good to be among them. At no time did I feel this in Thailand.

[Lacessit]

On a holiday for two weeks in Vietnam, I was impressed by how business-like the Vietnamese are. The travel agent that organized the holiday for us from Hanoi was brilliant. The contradiction for me was most apparent in the differences in police and army presence. In Vietnam, supposedly a Communist dictatorship, the police and army were nearly invisible. In Thailand, supposedly a democracy, the police and army - well, say no more.

[scorecard]

1 hour ago, Kaoboi Bebobp said:

I live in a middle class neighbourhood in Vung Tau. The young kids on my little street are out running around, riding their bikes, bouncing basketballs, lifting weights, playing badminton -- so very active, smiling and laughing. I see in their faces a determination to learn, enthusiasm to go to school. There's one about a 100 metres behind me.

 

Many of them, only 5-7 years old, already know a little bit of English and always give me a smile, a wave and hello. Even a "how are you?" Walking past the school, they wave and say "good morning," "where do you come from." They're outgoing in a way that puts Thai kids in the shade.

 

Absolutely none of these kids are sitting on their butts staring into a smartphone. They go to school 7 days a week, English on weekends. Teacher friends report their kids in the language classes are engaged and rapt in their attention to the instruction. Feels good to be among them. At no time did I feel this in Thailand.

 

There's a primary / high school just a bit down the road from my uni in HCMC,

 

Quite often there's a full  class of kids on the footpath under the shady trees (various ages) groups of 2, in a column.

 

As soon as a western person comes along they are politely asked 'can I help you sir/madam?

 

They can cope with numerous questions and not afraid to talk / answer etc. Then this pair go to the back of the column for the next pair to talk to some westerners.

 

I checked, their English conversation teachers are Vietnamese. 

 

Three or four times a senior small groups of final year high school kids sit in the back of our MBA English program class rooms for an hour. They are not allowed to speak during the lessons but the lecturers stay to spend an extra approx. 30 minutes with the kids.

 

They are just full of good questions, always polite and full of life, so keen to learn. One senior boy asked me to explain again the concept of 'competitive advantage'. Then he said without any hesitation, in clear English 'now I can be a businessman!'

 

One comment that comes up with 99% of the western lecturers - 'can you please be my profesor when I start university?'.  The other kids all laugh, great moments.

 

 

 

 

 

 

Edited September 28, 2018 by scorecard

[oldrunner]

Trade Thai lady boys for Vietnamese ladies.

[DrTuner]

7 hours ago, Kaoboi Bebobp said:

I live in a middle class neighbourhood in Vung Tau. The young kids on my little street are out running around, riding their bikes, bouncing basketballs, lifting weights, playing badminton -- so very active, smiling and laughing. I see in their faces a determination to learn, enthusiasm to go to school. There's one about a 100 metres behind me.

 

Many of them, only 5-7 years old, already know a little bit of English and always give me a smile, a wave and hello. Even a "how are you?" Walking past the school, they wave and say "good morning," "where do you come from." They're outgoing in a way that puts Thai kids in the shade.

 

Absolutely none of these kids are sitting on their butts staring into a smartphone. They go to school 7 days a week, English on weekends. Teacher friends report their kids in the language classes are engaged and rapt in their attention to the instruction. Feels good to be among them. At no time did I feel this in Thailand.

This also means they'll trample over Thais in SEA with very little effort in 10-15 years. Just about in time when China appoints slots for their vassals, Thailand is going to get the short stick and end up as a garbage dump. 

[marcusarelus]

23 minutes ago, DrTuner said:

This also means they'll trample over Thais in SEA with very little effort in 10-15 years. Just about in time when China appoints slots for their vassals, Thailand is going to get the short stick and end up as a garbage dump. 

Vietnam 30% inflation in 2008 and 2012

[The manic]

12 hours ago, Lacessit said:

On a holiday for two weeks in Vietnam, I was impressed by how business-like the Vietnamese are. The travel agent that organized the holiday for us from Hanoi was brilliant. The contradiction for me was most apparent in the differences in police and army presence. In Vietnam, supposedly a Communist dictatorship, the police and army were nearly invisible. In Thailand, supposedly a democracy, the police and army - well, say no more.

Thailand is not a democracy but I know what you mean. I was in Saigon..no police presence..people hanging out, smoking dope, taking NO2, music , food, freedom...like Thailand used to be but Hanoi was wrapped up tight...all bars closed by 11pm..

 

[stbkk]

I seem to remember also that in Vietnam a foreign investor can own their Company 100%, as opposed to Thailand. If I remember correctly when this law came into force a few years back several Thai companies re-located at least some of their operation to VN.

 

 

[NanLaew]

1 hour ago, stbkk said:

I seem to remember also that in Vietnam a foreign investor can own their Company 100%, as opposed to Thailand. If I remember correctly when this law came into force a few years back several Thai companies re-located at least some of their operation to VN.

 

 

...and most if not all still don't have all that legalization paperwork all signed off yet.

[candide]

On 9/28/2018 at 7:10 AM, Cadbury said:

An excellent article with a big message for Thailand. Unfortunately the uneducated muddle-headed military types live in some fantasy dream world of submarines, economic corridors and HS trains. I can think of one in particular who can't even put a coherent sentence together.

Thailand's big disadvantage over Vietnam (and some other ASEAN countries) is it's rapidly declining education standards which will further take its toll as time passes. By contrast the young people of Vietnam are striving hard to gain internationally recognised qualifications; not those types of Thai qualifications where "every player wins a prize" or "the more you pay the higher the qualification". Even Thai employers now have little respect for many of the dime dozen valueless academic qualifications.

I work in tourism in both Thailand and Vietnam and I can't even begin to compare the high work ethic of the Vietnamese to that of the Thais. They are poles apart.

I have just employed a young lady in Hanoi to work in my team. She has two degrees, one in Hospitality and Tourism and one in Economics. She is as sharp as a tack and sets demanding standards for herself. 

I am amazed at the transformation and growth of Vietnam over the last 10 years compared to that of Thailand. Thailand is losing serious investment and economic ground to Vietnam. Vietnam is busting at the seams with Taiwan and South Korean factories which could have gone to Thailand but didn't.

When Thai companies prefer to invest outside their own country but prefer instead to put their money into neighbouring countries the writing is on the wall. Economic growth in Thailand is stagnant due to population and education limitations and things are only going to get worse. Foreign investment with foreign labour is it’s only hope.

 

Vietnam has inherited French education traditions from the colonial time, so the education system tends to be quite good by SEA standards. As in China, education is often considered as a core value by families. On top of it, they are smart, and can be hard-working when it's worth. They can also be quite flexible when there are no constraining bureaucratic rules (or despite rules).

 

When I was there, the problem was more at the lower levels and not so different from Thailand (it was in South Vietnam, the culture is different in the North): necessity to check everything, no concern for safety, no attention put to maintenance, limited honesty of employees who tend to take a cut when they can, etc...

 

[Machiavelli]

On 9/28/2018 at 2:25 PM, Kaoboi Bebobp said:

I live in a middle class neighbourhood in Vung Tau. The young kids on my little street are out running around, riding their bikes, bouncing basketballs, lifting weights, playing badminton -- so very active, smiling and laughing. I see in their faces a determination to learn, enthusiasm to go to school. There's one about a 100 metres behind me.

 

Many of them, only 5-7 years old, already know a little bit of English and always give me a smile, a wave and hello. Even a "how are you?" Walking past the school, they wave and say "good morning," "where do you come from." They're outgoing in a way that puts Thai kids in the shade.

 

Absolutely none of these kids are sitting on their butts staring into a smartphone. They go to school 7 days a week, English on weekends. Teacher friends report their kids in the language classes are engaged and rapt in their attention to the instruction. Feels good to be among them. At no time did I feel this in Thailand.

All work and no play will make the vietkid dumb. ????