During the official visit to Thailand by Vietnamese State President Nguyen Xuan Phuc, the two nations last week signed a Plan of Action on Implementing the Thailand-Vietnam Strengthened Strategic Partnership which covers until 2027 and which will guide the strategic partnership between the two countries into the next decade.

Vietnamese President Nguyen Xuan Phuc met Thai PM Prayut Chan-o-cha last week, photo VNA

A joint statement released last week said, “With a view to promoting greater trade and investment between the two countries, both leaders [President Phuc and Thai Prime Minister Prayut Chan-o-cha] tasked relevant agencies to simplify import-export procedures; facilitate cross-border trade and transit of goods to third countries; address investment obstacles; and explore new areas of opportunities, especially the digital economy and e-commerce.”

Last week also saw the launch of a cross-border QR payment link aimed at facilitating tourism and the use of local currencies, as well as promoting the digitalisation of both countries.

The pair also inked a trade and investment facilitation agreement between Export-Import Bank of Thailand and Vietcombank with a targeted first year trade volume of up to ฿10 billion ($250 million). Vietnam and Thailand also aim to reach a bilateral trade turnover of $25 billion in 2025, from about $19 billion this year.

Currently, Thailand remains the largest trading partner of Vietnam in ASEAN. In 2021, the two countries’ trade turnover reached the highest-ever level of $18.8 billion, up 18 per cent on-year. The figure in the first nine months of this year hit $16.1 billion, up 17.2 per cent over the same period in 2021 - in which Vietnam’s exports were worth $5.6 billion, up 26.9 per cent and imports of $10.5 billion, up 12.7 per cent.

According to the Vietnamese Ministry of Industry and Trade, it would be favourable for businesses from both countries to physically explore further trade cooperation.

In a specific case, Thailand’s Doay Ruksy Company is preparing to participate in a large-scale Thai goods exhibition in Hanoi.

“We want to market our high-quality herbal products across Vietnam, as demand for them is rising. After that, we would consider direct investment in the country,” the company’s representative Gronhong Maneesin said.

This will be the eighth time this company will join Thai goods exhibitions in Vietnam over the past few years. In the last two exhibitions – one in the northern city of Haiphong in 2018 and Hanoi the following year – the firm reaped a revenue of double digits from the Vietnamese market.

“Since early 2020 we have been unable to attend any exhibitions, so now is the time we have to seek more customers and partners in Vietnam where demand for Thai goods is strongly increasing,” Maneesin said.

Piyapong Jriyasetapong, chairman of Thai Chamber of Commerce and Industry in Vietnam told VIR, “The Vietnamese economy is continuing to rebound and Thai companies plan to expand their trade and production activities in Vietnam in order to take advantage of opportunities provided by free trade agreements (FTAs) to which Vietnam is a signatory.”

He also said that the Vietnamese market is significant to Thai businesses and investors. “The Vietnamese market has been a hotspot for Thai investors for over a decade. All the top Thai conglomerates have already set up operations in Vietnam with more and more investment in the years to come,” Jriyasetapong said.

This is, he said, thanks to growing local consumption from growing wealth of a young population, and the proximity to Thailand has made it easier to travel, with competitive production costs owing to abundant agricultural raw materials and Vietnam’s FTAs supported for exports.

“Thai investors are interested in conducting business in a series of sectors in Vietnam,” Jriyasetapong said. “They include feed and farming, renewable energy, packaging, retail and distribution, petrochemicals, foodstuff processing, plastic products, and energy drinks. Growing local consumption in Vietnam will be one of the key drivers of economic growth.”

Roongrote Rangsiyopash, president and CEO of cement, packaging and petrochemicals group SCG, said that Vietnam is a prioritised investment location for the company in ASEAN.

“Currently, SCG is building the national key project of the Long Son petrochemicals complex in the southern province of Ba Ria-Vung Tau. It will be the first integrated petrochemical complex in the country once it is commercially commissioned in Q1/2023,” Rangsiyopash said. The project is being developed with an estimated $5.4 billion by Long Son Petrochemicals, formed by SCG.

According to the Vietnamese Ministry of Planning and Investment, as of October 20, Thailand had 671 valid investment projects in Vietnam registered at $13.1 billion – making Thailand the ninth-largest foreign investor in Vietnam and the second-biggest ASEAN investor of Vietnam.

In the January-October 20 period, newly registered capital, stake acquisition, and capital contributions from Thai investors in Vietnam were all worth $257.2 million, with 30 newly licensed projects.