September 12, 2012

Big Thai companies remain confident in expanding their investment in Vietnam due to its market size and expected stronger purchasing power despite the current economic slowdown and high inflation.

Sooksan Jiumjaiswanglert, executive vice president of Charoen Pokphand (CP) Vietnam Corp, said that although many foreign investors were eyeing up Myanmar for investment, his company expected Vietnam to experience stronger economic growth and be better placed to serve as a springboard for expanding investment to Laos, Cambodia and southern China.

"Because of its closer connection with other countries, the Vietnamese market is in effect larger than just its 90 million-strong population. Investors there could have a better opportunity to expand their businesses to neighbouring countries of Vietnam," he said.

He acknowledged, however, that there were some limitations to investment because of the country's laws and regulations, which the government is always changing.

CP Vietnam plans to expand the production capacity of its processed-food plant, where 80-90% of the output is currently allocated to feed meal. A capacity increase will also increase the opportunity for Charoen Pokphand to build up its CP brand in the local market, he added.

Over the past five years, CP Vietnam's revenue has increased by an average of 29% annually, a level that Sooksan expects to exceed this year.

He said the Vietnamese economy had fluctuated considerably during the past five years. For example, inflation stood at 19.9% in 2008, but then dropped to 6.5% because the government accelerated economic-growth policies. The local currency, the dong, has also been devalued several times over the past few years.