The Vietnam Experience If Timing is Everything, Then Now is the Time: Understanding Vietnam s Three Act Play. Walter Blocker Managing Director

Transcription

1 The Vietnam Experience If Timing is Everything, Then Now is the Time: Understanding Vietnam s Three Act Play Walter Blocker Managing Director

2 Presentation Overview Brief Introduction to Vietnam s Three Act Play

3 The GANNON Group is a 100% US FIE with 5 operating companies: Consumer Products Warehousing/Logistics/Asset Management Premium Floor covering and Hospitality Security Solutions UHT Beverage Manufacturing domestic/export Industrial Development

4 Headquartered in Ho Chi Minh City Manufacturing in Dong Nai Province Logistics Center at Saigon Port Branch Office in Hanoi 350 employees One of Vietnam s largest private American Investors

5 Consumer Products L Oreal Diageo

6 Raw material Supply Chain/Asset Management Rohm and Haas Dow BF Goodrich Eastman

7 Premium Flooring/Hospitality Security Solutions Mohawk Industries Ving Card Elsafe Brintons

8 GANNON Beverages: Designed and operated as Asia s premier, high quality contract manufacturer of UHT milk, juice, tea, and yogurt

9 Tetra Pak Aseptic System with capacity of 60M liters/yr Nestle Uni-President Hanoi Milk Misa

10 Industrial Development Turnkey, custom built facilities for manufacturing and storage in Dong Nai Industrial Zones

11 GANNON Power Gannon is completing the feasibility in conjunction with the Vietnamese government to build a three phase, $750M gas fired power plant to service industry in Dong Nai Province. This will be the largest American investment to date in Vietnam.

12 Understanding Vietnam is like a Three Act Play ACT I The world raced to Vietnam ACT II The world raced out of Vietnam ACT III Vietnam: A safe platform for risk Present

13 ACT I Irrational Exuberance In 1994, Vietnam became one of the fastest growing economy in the world Foreign Investors saw unstoppable growth and spared no expense to get ahead (Tiger Syndrome) (after all ) Vietnam would reform quickly to adapt to these market indicators There were no warning signs in Vietnam in 1994

14 ACT I Irrational Exuberance Vietnam was not ready to interface with private enterprise Bureaucracy was cumbersome and not always corrupt Workforce was not prepared for commercial activities World Bank

15 ACT I Irrational Exuberance All Vietnamese will own a new car by Year 2000 I know I can make these numbers somehow Business plans were miscalculated and based on speculation as there were no fundamentals to study. This proved frustrating and stressful for investors

16 ACT I Irrational Exuberance And..government reforms were slower than expect Plus Who predicted a devastating currency crisis? Now everyone was frustrated..

17 ACT II Reconsideration and Reflection So companies started to rethink their strategies. Many left altogether Vietnam s reputation suffered.

18 ACT II Reconsideration and Reflection Meanwhile, the leadership in Vietnam went to work behind the scenes to develop the right strategy for Vietnam s market economy

19 ACT II Reconsideration and Reflection And many foreign investors found new ways to succeed and thrive despite the downturn. After all Crisis can be translated as Opportunity

20 ACT II Reconsideration and Reflection VIETNAM BUSINESS FORUM New lines of communication were opened between investors and the government. Some even called it a model for other developing nations

21 ACT II Reconsideration and Reflection In July 2000, Vietnam took the bold step to sign the VN/US Bi-Lateral Trade Agreement

22 ACT III A Safe Platform for Risk With the ratification of the VN/US BTA in December of 2001, Vietnam began an earnest path toward WTO accession. The domestic private sector began to mobilize funds more efficiently. Impressive increases in exports to the US proved that indeed a rising tide lifts all ships

23 Vietnam/US Trade Growth

24

25 U.S.-Related Investment

26 ACT III A Safe Platform for Risk Getting started in Vietnam is easier, because the country is adapting to the needs of private enterprise: both foreign and domestic. Foreign Investors need the support of reliable domestic service providers.

27 In 2006, Foreign Direct Investment in Vietnam is estimated to reach $5.0 Billion

28 Intel chose Vietnam for $300mm semiconductor assembly and test factory

29 ACT III A Safe Platform for Risk Dong Nai Province ( Deerfield ) is the Number #1 destination for US Manufacturing Investment in Vietnam.

30 ACT III A Safe Platform for Risk Vietnamese workers are perfect for structured work requirements. GANNON Beverages staff were ready for 95% plant utilization within 90 days of commissioning our factory.

31 ACT III A Safe Platform for Risk New investors can take advantage of the platform created over the last 10 years. Vietnam has a clear path forward and the future is easier to forecast. Success still not easy, but manageable and supported by a maturing workforce, infrastructure, and a reliable service base.

32 Dong Nai is Sincere Support Services are ready to assist Infrastructure is good and is continuously improving Leaders listen to investors in an open dialogue

33 American Chamber of Commerce in Vietnam 420 Member Companies 900 executives, both expat and Vietnamese One of Asia s largest and most active Chambers

34 Cam On!