Vietnamese State President Nguyen Xuan Phuc and his Indonesian counterpart Joko Widodo recently reaffirmed their strong commitment to elevate ties via a series of new measures including facilitation of enterprises to diversify investment and business forms in their respective markets, including in the digital economy, digital transformation, green economy, and renewable energy.

Presidents Nguyen Xuan Phuc (L) and Joko Widodo at the welcome ceremony for the Vietnamese leader in Bogor city, West Java province, on December 22 (Photo: VNA)

“Vietnam continues to be an attractive destination for our enterprises. Vietnam’s position is considered strategic for the enhancement of mutually beneficial economic cooperation,” Denny Abdi, Indonesian Ambassador to Vietnam, told VIR.

He said that Vietnam can serve as an entry point for Indonesian investors to the 98 million people of the country’s domestic market, as well as to surrounding ASEAN countries such as Laos and Cambodia; and to Vietnam’s third-largest trading partner countries such as the US, EU, Eurasian Economic Union, and China as Vietnam’s trade relations with these countries are significant.

“Indonesia and Vietnam share several conditions that can support in enhancing the economic relationship, such as a huge population, increasing economic achievements, rising purchasing power parity, geographical closeness, and ASEAN relations,” Ambassador Abdi said.

According to Vietnam’s Ministry of Planning and Investment, as of December 20, Vietnam had 106 valid investment projects by Indonesian companies registered at $638.9 million. Vietnam also boasts 17 valid investment projects registered at $59 million in Indonesia, operating in commerce, IT, agriculture, and industry.

A few weeks back, 12 Indonesian companies came to Vietnam to showcase products in medical equipment and devices, hospital beds, food supplements, and herbal medicines.

Indonesia’s mobile on-demand platform Gojek, meanwhile, has been growing from strength to strength since its inception in Vietnam in 2018.

In Vietnam, Gojek now offers four services in Ho Chi Minh City and Hanoi – GoRide and GoCar ride-hailers, GoFood online delivery, and GoSend package delivery – all of which help to make life easier for consumers while improving income opportunities for its driver-partners and small restaurants and eateries.

According to the Indonesian Embassy to Vietnam, many businesses are targeting Vietnam that operate in many sectors such as coal, education, car components, infrastructure, property, consumer products, agriculture, and more. Many Indonesian companies have been successfully operating in Vietnam, including Thang Long Cement, Ciputra Group, Dynaplast Vietnam, Japfa Comfeed, Akebono Brake Astra Vietnam, and Vietmindo Energitama.

“Indonesian investors are keen on the infrastructure and property sector. The Vietnamese government is also seriously undertaking promotional activities to attract foreign investors in the development of the property sector by facilitating construction, allocation of land, and stabilisation of land prices, and especially improving the transparency and simplification of administrative procedures,” Ambassador Abdi said.

Elsewhere, Indonesia’s coal miner Intra Asia Indonesia is reported to be working with Vietnamese authorities on a plan to construct a $1 billion coal port in Vietnam’s central region. A few years ago, the group inked an MoU on forging cooperation in coal trading and seaport investment with a Vietnamese company, but delays in implementation were ascribed to some difficulties in procedures.

In another case, Indonesian animal feed producer Japfa Comfeed Vietnam is expected to continue investing in Vietnam. In late 2020, the company was licensed to invest more than $40 million into an animal livestock production project worth $230 million in the southern province of Binh Phuoc.

Additionally, Japfa Comfeed has also been cooperating with companies in breed genetic technology, building and developing a system of breeding farms to create sources suitable for local conditions with competitive price in Binh Phuoc. The number of employees by 2025 is set to be over 1,000.

Japfa Comfeed Vietnam general director Arif Widjaja told VIR, “This project demonstrates our long-term commitment in business and investment in Vietnam. Being one of Japfa’s three key markets in Asia, Vietnam is always our prime priority in the group’s expansion strategy.”

Over a fortnight ago, Japfa Comfeed Vietnam officially put into operation a poultry hatchery in the Central Highlands province of Dak Lak, the company’s fourth factory in Vietnam following three others in Thai Binh, Binh Duong, and Dong Nai.

According to the Consulate General of Indonesia, there are more than 40 Indonesian companies in Vietnam, and most are located in the southern region. The sectors range from manufacturing products, fast-moving consumer goods, chemicals, and pharmaceuticals to transportation, travel, and logistics. These companies produce goods and services for the Vietnamese market, as well as for export.

“As one of the fastest-growing economies in the region, driven by export-oriented manufacturing, foreign direct investment, and increasingly strong domestic demand, Vietnam is attracting the attention of investors. Vietnam has become a strategic place for many foreign entrepreneurs to invest and set up a company,” the Consulate General said.

Both countries’ bilateral trade turnover soared from $5.6 billion in 2014 to $11.5 billion last year – up 40 per cent against 2020 and exceeding the target of $10 billion set in their 2019-2023 action plan. The figure sat at nearly $13 billion in the first 11 months of 2022. Both sides aim for the figure to reach over $25 billion a year before 2028.