Journey "reaching out to the ocean"

However, to have more Vietnamese brands on a global scale, it is time for us to innovate mechanisms and policies related to OFDI.

Vinamilk's Driftwood dairy factory in the US. (Photo: Minh Thi)

Remarkable marks

Looking back at the entire journey of “reaching out to the ocean” since Decree 22/1999/ND-CP (Decree 22) regulating OFDI of Vietnamese enterprises was issued, Dr. Phan Huu Thang, former Director of the Foreign Investment Department (Ministry of Planning and Investment), Chairman of the Board of Directors of the International Investment Research Institute ISC, said that the journey can be divided into four stages.

Specifically, in phase 1 (1999-2004), Vietnam's OFDI activities began to take off. Decree 22 created a legal corridor for enterprises to implement OFDI projects. Phase 2 (2005-2010) was the period of OFDI explosion, after the Investment Law 2005 was passed and Decree No. 78/2006/ND-CP regulating OFDI of Vietnamese enterprises was issued.

During this period, there were 341 projects still in effect, with a total registered capital of nearly 10.1 billion USD, accounting for 46.5% of Vietnam's total OFDI capital. In phase 3 (2010-2016), OFDI continued to remain at a high level, with 512 projects still in effect. In phase 4 (2017-2022), Vietnam's OFDI tended to decline, although the number of OFDI projects increased compared to the previous period, the registered capital only reached 2.73 billion USD...

According to Dr. Phan Huu Thang, over the past 24 years, in addition to efforts to build and perfect the legal corridor and promote foreign direct investment (FDI), Vietnam has allowed domestic enterprises to invest abroad to expand the market for goods consumption, exploit strategic assets, acquire foreign management experience and advanced technology, expand community relations, people-to-people diplomacy, etc., contributing to promoting the socio-economic development of the country in general and the development of Vietnamese enterprises in particular.

On this journey, many businesses have created and gradually affirmed Vietnamese brands in the international arena, contributing to helping Vietnam integrate more deeply and effectively into the world economy, and joining hands with international friends to build a peaceful and prosperous world.

One of the typical enterprises that can be mentioned when talking about OFDI in Vietnam is FPT Corporation (FPT) with a network of 290 headquarters, offices, and branches in four continents, 29 countries and territories worldwide, an important partner of hundreds of large corporations in many fields, a high-level technology partner of Airbus, Siemens, Microsoft, Amazon Web Services...

FPT's revenue in 2022 will reach VND 44,010 billion, of which revenue from foreign markets will contribute 41.2%.

In 2022, FPT will open four new offices in the US, Denmark, Japan and Thailand, own 31 projects worth more than 5 million USD, and have revenue from foreign markets reaching 1 billion USD.

For TH Group, the OFDI journey officially marked an important milestone when TH invested in large-scale agriculture in Russia (May 2016). After more than seven years of implementation, the High-tech Dairy Farming and Milk Processing Complex with a total investment of 2.7 billion USD of TH Group has made important progress.

Hero of Labor Thai Huong, founder and Chairman of the TH Group Strategy Council, shared that in Russia, with gratitude to the great and kind country of Russia, TH has been implementing projects without stopping. We hope that TH products in Russia will be trusted and accepted by consumers as products bearing the national brand of Russia produced by Vietnamese enterprises.

In Australia, TH is also firmly holding the position of the largest Vietnamese investment enterprise in this country...

Not everything is smooth sailing, but with experience, strength in high-tech dairy farming and being a Vietnamese brand with many products that meet international standards, TH is confident in taking firm steps on the OFDI journey.

In fact, the picture of foreign investment by Vietnamese enterprises also has all the shades of light and dark. However, the common point is that business strategies are thoroughly researched by enterprises before implementation to proactively and promptly respond to the unpredictable and complicated geopolitical situation...

“Dual mission” in global integration

As someone who has many years of experience managing, accompanying and supporting Vietnamese enterprises on the journey of "reaching out to the ocean" to create and affirm Vietnamese brands in the international arena, understanding and sharing with enterprises every difficulty and obstacle, Dr. Phan Huu Thang said that OFDI is a journey full of hardships and difficulties.

Besides successful businesses that have firmly affirmed their brand image such as FPT, Viettel, Vinamilk or TH..., there are many businesses facing difficulties, some even having to temporarily suspend operations or dissolve for many reasons such as: inability to adapt, lack of knowledge of laws, market information... of the host country.

Therefore, with the goal of achieving the same efficiency in attracting FDI into Vietnam and promoting Vietnam's OFDI, it is time for us to study more deeply about Vietnam's OFDI. This is the "dual mission" that Vietnam needs to achieve when conducting international investment activities, especially in the context of the global economy facing many uncertainties and complexities as it is today.

This is not the first time Mr. Thang has mentioned this. Remember, at the book launch event “Vietnam’s Direct Investment Abroad and in Myanmar” held on May 31, 2023, Dr. Phan Huu Thang, in his role as Chairman of the Editorial Board of this book, stated that the caution of a developing country, trying to deeply integrate into the regional and world economy, is inevitable.

However, Vietnamese enterprises are still struggling with fear and self-consciousness about the scale of the economy and its level of development. In recent times, over-cautiousness in adjusting the legal system, policies and limitations in state management of OFDI activities have reduced the aspiration of Vietnamese enterprises to "reach out to the ocean" to develop into global enterprises, slowing down the development process and reducing the effectiveness of OFDI.

Therefore, according to Mr. Phan Huu Thang, it is necessary to clarify the reasons leading to success and failure in Vietnam's OFDI through the investment situation, production and business results of enterprises... in order to conduct in-depth research and propose appropriate solutions.

Specifically, published OFDI data lack specific assessments of revenue, financial status, budget contributions of enterprises from OFDI funds, etc., so it is quite difficult for investment research agencies to fully and comprehensively assess the OFDI status of Vietnamese enterprises up to this point.

In addition, it is necessary to clearly analyze the legal framework on OFDI of Vietnam as well as investment recipient countries to point out the advantages and difficulties for enterprises when implementing OFDI in accordance with the country's socio-economic development strategy from now to 2030 and beyond.

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