Businesses make strides abroad with expansion and acquisitions
Vietnamese businesses are actively expanding abroad and acquiring foreign enterprises in Việt Nam, driven by the desire to enhance their scale, scope and competitiveness in various industries, such as food production, textiles, construction, retail and technology.
Lê Thị Giàu, Chairwoman of the Board of Directors of Bình Tây Food Joint Stock Company (BIFOCO), explained that her company had recently acquired a factory owned by a Taiwanese (Chinese) enterprise in HCM City.
This acquisition aims to increase production capacity while the company is also building a new factory in Đồng Nai province to increase its production output by five times, meeting the growing demand for their products.
Giàu said that approximately 70 per cent of BIFOCO'S output is dedicated to the export market. She expects to export around 1,000 containers of products to various markets in Asia, Europe and North America this year, amounting to approximately US$50 million. This significant growth in exports is projected to increase the company's revenue by between 300 and 400 per cent compared to the previous year.
Amid the challenging global economic landscape, the food production industry has been more robust compared to other sectors. The current abundance of orders presents a great opportunity for businesses, leading them to make bold investments in development. Acquiring existing factories with wellequipped facilities from other enterprises enables immediate production operations, making it an optimal choice, she said.
Another example of expansion in the business sector is the Thành Công Textile and
According to statistics from the Ministry of Planning and Investment, there has been a signi cant increase in outbound investment by Vietnamese investors. In the rst two months of 2024 alone, Vietnamese investors initiated 17 new projects abroad.
Garment Joint Stock Company, which recently announced its plan to invest hundreds of billions of Vietnamese đồng to acquire the SY Vina textile and dyeing factory in Đồng Nai. This acquisition will help the company obtain a dyeing license and expand its product segment to include woven fabrics, thereby generating more valuable garment orders. The products manufactured at the SY Vina factory are expected to be directly exported to the US market.
Coteccons Construction Joint Stock Company has also made significant acquisitions, acquiring 100 per cent of the capital contributions of two foreign-invested companies: Sinh Nam Metal Vietnam Co Ltd and UG M&E Vietnam Co Ltd.
In the retail sector, Thaco, led by billionaire Trần Bá Dương, acquired the hypermarket Emart in 2021. Thaco's member group Thiso has successfully operated and opened two additional Emart hypermarkets in HCM City.
Similarly, the HCM City Trade Co-operative Union (Saigon Co.op) acquired a chain of 18 supermarkets from Auchan (France), demonstrating the growth of Vietnamese businesses.
Prior to the recent wave of domestic enterprises acquiring foreign companies in Việt Nam, several domestic 'giants' such as FPT, Masan, Vinamilk, REE and Nutifood had already pursued successful mergers and acquisitions (M&A) deals outside of Việt Nam in order to expand their customer base, create business opportunities and take advantage of their competitive edge.
Notably, Vinamilk completed the acquisition of all shares of Driftwood Company (US) in 2016, which opened its doors for increased exports of finished milk products to the US.
In 2020, Masan Group's acquisition of the tungsten business platform of H.C. Starck (Germany) positioned the company as a global manufacturer of high-tech industrial materials. Masan specialises in providing source materials for the mechanical engineering, automotive, energy and aviation industries.
FPT Group has also been actively acquiring technology companies abroad. In 2023, FPT purchased 80 per cent of the shares of the French technology consulting company AOSIS, transforming it into a key partner for strengthening FPT'S ability to provide solutions and support customers in their digital transformation journey across Europe and globally.
Prior to the AOSIS acquisition, FPT also made significant investments in Landing AI, an American computer vision and AI software company (October 2023) and acquired Cardinal Peak, a technical services company in the North American market (December 2023).
According to statistics from the Ministry of Planning and Investment, there has been a significant increase in outbound investment by Vietnamese investors. In the first two months of 2024 alone, Vietnamese investors initiated 17 new projects abroad. The most concentrated investment sectors include wholesale and retail industries (39.4 per cent), real estate business activities (21.5 per cent) and construction (20 per cent). The US,
New Zealand, Germany, Laos and China are among the countries that have attracted the most investment from Việt Nam.
Phan Hữu Thắng, former Director of the Foreign Investment Department under the Ministry of Industry and Trade, highlights that investing and doing business abroad, including M&A activities involving foreign enterprises, offer Vietnamese businesses the opportunity to rapidly expand their consumer markets, exploit strategic assets and achieve deeper integration.
Moreover, through these activities, businesses gain valuable management experience and access to advanced technology from foreign countries, enabling them to progress faster and further, he said.
From a business perspective, Nguyễn Đặng Hiến, Vice Chairman of the HCM City Food Association, agreed that the trend of Vietnamese businesses acquiring foreign enterprises is encouraging. With 97 per cent of Vietnamese enterprises classified as small, medium and micro enterprises, the presence of strong Vietnamese enterprises creates a competitive advantage, strengthens Vietnamese products and contributes to the growth of the Vietnamese economy.
Hiển emphasised that in an increasingly fierce market competition, having a robust presence of well-established Vietnamese companies is beneficial for the overall development and success of the country's business landscape.