Vietnam_German_Investments_August 2022

Images: Freepik (pressfoto)

Overview of

GERMAN INVESTMENTS IN VIETNAM
&

THE LINKS WITH VIETNAMESE BUSINESSES
Status: August 2022


Overview

German Investments

2


OVERVIEW – GERMAN INVESTMENTS IN VIETNAM

GERMAN INVESTMENT OVER TIME

1988: FDI made legally
possible
1992: First German
investments of Bültel
(Binh Duong) and
Tatonka (HCMC)

60

No. of invest projects p.a.

1986: Vietnam
officially starts
reforming its economy
with “Doi Moi” reforms

50
40

2007: WTO ascension
leads to an increase in
investments

2011: Angela Merkel
visits Vietnam; start of
“Strategic
Partnership”

2020: The Free Trade
Agreement between
Vietnam and EU came
into effect

Today: Roughly 500
companies from
Germany invested in
Vietnam

30

20
10

2015: New enterprise
and investment law
makes foreign
company foundation
easier

0

Definitions
The data in this report represents local legal entities (LLCs, JVs etc.) as well as representative offices (RO). It not only reflects direct bilateral
investments from Germany but also transactions from third-country subsidiaries of German companies to Vietnam. A “company” is defined as a
legal entity such as an LLC or an RO. A company is “German” if it either has a mother company with headquarters in Germany or a German
national as its main investor. While we tried our best to research all German companies in Vietnam and to sort non-active companies out of
public sources, we cannot guarantee for the accuracy of the numbers stated in this report.


OVERVIEW – GERMAN INVESTMENTS IN VIETNAM

Centers of German Activity

GERMAN INVEST FAST FACTS
2,000 Germans, most in HCMC
500

Hanoi – Haiphong
Economic Corridor

investment projects in Vietnam, over 50% in HCMC

81 manufacturing companies, predominantly in the

Da Nang – Quang
Nam – Quang Ngai

Greater HCMC Region and Hanoi-Haiphong Corridor

Phu Yen – Binh Dinh
Roughly

Over

50,000 jobs created by German investors

2.9 billion USD invested

Images: flaticon.com (freepik, srip, DinosoftLabs, Pause09, smashicons), map from Openstreetmaps

Greater HCMC
Region


OVERVIEW – GERMAN INVESTMENTS IN VIETNAM

INVESTMENTS BY INDUSTRY
1/3 of investments with service background (see services,
BPO, logistics)

Because of low labor costs / high workforce quality
companies have settled down in Vietnam

60 BPO

9%

Industry and construction is expanding
p.a. luring in
providers of building technologies, chemicals and machinery.
While traditionally apparel OEMs used to invest in Vietnam, the
past years have seen textile suppliers also settling down.


OVERVIEW – GERMAN INVESTMENTS IN VIETNAM

INVESTMENTS BY FUNCTION

Sales/Service Entities by Industry
Building Industry,
Building Materials
10%

Electronics
7%

Machinery and
Appliances
31%

Medical Appliances,
Healthcare
15%

Chemicals
15%

Logistics
15%

Includes engineering
companies (such as
Fichtner) and building
planners (such as InrosLackner) as well as QC
companies (TÜV
Rheinland/TÜV Süd)

Sourcing offices partly for big German
corporates (e.g. Kaufland) or trading houses
serving German retailers (e.g. Delta-Sport)

Programming and post-processing is mostly
BPO e.g. programming of websites and
applications or post-processing of digital
images (e.g. Digi-Texx, Hella).

Biggest sales operation led by Zott with 750
employees. The company bought its local distributor
in 2017 and is now serving the Vietnamese retail with
products such as „Monte“ pudding.

INVESTMENTS BY REGION
Number of Investment Projects by Province/City
(Selection)

HCMC
255

North
22%
South
69%

CENTER

Center
9%

Da Nang Others
74
Dong Nai 11
13
Binh Duong
16
Hanoi
69

Share of Investment Projects by Region

NORTH

OVERVIEW – GERMAN INVESTMENTS IN VIETNAM

•

First economic reforms in the 1980s/1990s have been rolled out here and led to cluster
effects

•

Stronger economic development and higher GDP/capita leading to many companies
starting sales/sourcing operations here

•

Perceived higher openness of population/business partners than in the rest of the country

SOUTH

Most German investments are located in Southern Vietnam/HCMC because of the following
reasons:


OVERVIEW – GERMAN INVESTMENTS IN VIETNAM

SPOTLIGHT: GREATER HCMC REGION
Greater HCMC Region comprised of 3 provinces + HCMC

Binh Duong

German Invest Functions Greater HCMC Region
Others
Sourcing

Dong Nai

Most investments within
40 km of HCMC center

Long An

HCMC Region contributes ca.
to the national GDP

echnical
Consulting

40%

GDP/capita (USD)

75% share of

invests in Vietnam
Sales Ser ice

Programming
Post
Processing

Manufacturing

HCMC
Image: Openstreetmap

78% share

CMC Region

Vietnam

57% share
The HCMC megalopolis has about

16 million residents.
Population is growing by 6% p.a.
Image: Pixabay (Quangpraha)


OVERVIEW – GERMAN INVESTMENTS IN VIETNAM

SPOTLIGHT: GERMAN ITO IN VIETNAM*
HCMC

Da Nang

*Selection of companies with evidence of operation
(e.g. running website)

Hanoi

Pictures by Pixabay (QuangPraha, Gamovn)


OVERVIEW – BILATERAL INVESTS

SPOTLIGHT: GERMAN M&A IN VIETNAM
165,000,000 USD

??? USD
STD & S
Co., Ltd.
Took over local distributor
and integrated her into own
VN LLC. Turnover: EUR 4.5m
in 2020, 13 employees

Took over local distributor
for better market access

30,000,000 USD

Bought competitor to
obtain key personnel

Holds majority share of
PetroVietnam Insurance

Holds majority of 2nd largest
local pharma generics

producer Pymepharco

250,000,000 USD

Delys Group
Pictures by Pixabay (Gamovn)


OVERVIEW – BILATERAL INVESTS

SPOTLIGHT: VIETNAMESE INVESTS IN GERMANY

Indefol GmbH
Subsidiary of leading VN
rooftop PV developer

H.C. Starck Tungsten GmbH
Takeover of tungsten
powder manufacturer
☺ 300

150 m EUR

Goslar

Berlin

☺ ???

???

Essen

FPT Deutschland GmbH
Programming Operations
☺ 30

8 m EUR

Frankfurt

Vietinbank - Filialen
Deutschland
Banking subsidiaries
☺ ???

???

Pictures by Freepik (Freepik, Gamovn)


OVERVIEW – GERMAN INVESTMENTS IN VIETNAM

NO OF INVESTMENTS BY GERMAN STATE
aden
rttemberg

Others

amburg

ordrhein
estfalen

essen
ayern

TOP 10 IHK DISTRICTS

*These numbers only represent investments with German mother companies.


Investments in

MANUFACTURING

13


MANUFACTURING

INVESTMENTS BY INDUSTRY

Please note: Some companies operate more than
one production facility in Vietnam. The number of
companies stated beneath, and the number of
logos therefore diverge in some cases.

81 manufacturing plants from
Germany in Vietnam
United

Potteries


NORTH

MANUFACTURING

INVESTMENTS BY REGION
Number of Investment Projects by Province/City
(Selection)

Centers of German Invest
Haiphong

Hanoi

Dong ai

uang am
aiphong

Long An
anoi

CMC

Share of Investment Projects by Region

Center

Quang Nam
Phu Yen/Binh
Dinh
Binh Duong

orth

South

SOUTH

Others

CENTER

inh Duong

HCMC

Dong Nai


MANUFACTURING

INVESTMENTS IN NORTHERN VIETNAM

Hanoi

Haiphong

Map by OpenStreetMaps


MANUFACTURING

INVESTMENTS IN GREATER DA NANG AREA

Danang

Map by OpenStreetMaps


MANUFACTURING

INVESTMENTS IN SOUTH CENTRAL VIETNAM
Quy Nhon

Tuy Hoa

Map by OpenStreetMaps


MANUFACTURING

INVESTMENTS IN SOUTHERN VIETNAM

United Potteries

HCMC

German invests concentrated
30 to 40 km around HCMC
Map by OpenStreetMaps


MANUFACTURING

TOP 3 MANUFACTURING INVESTS BY CHARTER CAPITAL
Charter capital: 350 million USD
Main locations: Dong Nai, HCMC
Main activities: Production of Pushbelts, R&D
No. of employees: 4,000

Charter capital: 228 million USD
Main locations: Hai Duong, Quang Ngai
Main activities: Production of gases for
industrial clients
No. of employees: 700

Approximate M&A value: 250 million USD
Main locations: Phu Yen
Main activities: Production of pharmaceuticals
No. of employees: 2,000

Images: flaticon.com (smashicons)


Images: Pixabay (Free-Photos)

LOOKING INTO THE CRYSTAL BALL

GERMAN CONFIDENCE INDEX

21


AHK World Business Outlook 2022 Spring - A barometer of the business confidence among German companies

BUSINESS SITUATION
80

70

61
60

50
41
40

36
33

33

30

26

20

10
7

3

0
2018

2019

2020 Spring

2020 Fall
tốt

better

2021 Spring

hài lịng

khơng tốt

same

worse

2021 Fall

2022 Spring


AHK World Business Outlook 2022 Spring - A barometer of the business confidence among German companies

BUSINESS EXPECTATION
80

74

72
70

64

60

55

57

50
40
30

20
12

7

10
0
2018

2019

2020 Spring

2020 Fall

2021 Spring

-10
-20
tốt

better

hài lịng

same

khơng tốt

worse

2021 Fall

2022 Spring

AHK World Business Outlook 2022 Spring - A barometer of the business confidence among German companies

ECONOMIC EXPECTATION
80

70

70

67

60

66

60
50

53

43

50

40

40
33

30

30

26
20

19

20

10

10

0

10

0
2018

2019

2020 Spring

2020 Fall
tốt

better

2021 Spring

hài lịng

khơng tốt

same

worse

2021 Fall

2022 Spring


AHK World Business Outlook 2022 Spring - A barometer of the business confidence among German companies

LEVERAGING ON FTAS IN VIETNAM
0

10

20

30

EVFTA

40

50

60

70

80

73

ASEAN-China Free Trade Agreement (ACFTA)

25

Comprehensive and Progressive Agreement for Transpacific
Partnership (CPTPP)

19

ASEAN-Japan Free Trade Agreement (AJCEP)

16

ASEAN-Korea Free Trade Agreement (AKFTA)

16

Regional Comprehensive Economic Partnership (RCEP)

10

ASEAN-India Free Trade Agreement (AIFTA)

6

ASEAN-Australia-New Zealand Free Trade Agreement
(AANZFTA)

6