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Feb 10, 2023 / 22:11

Vietnamese, Singaporean firms ink agreements to bolster economic relations

Singapore’s FDI into Vietnam in 2022 amounted to nearly US$6.46 billion, making it the largest foreign investor for that year.

Vietnamese and Singaporean companies ratified cooperation agreements on February 10, showing the substantive economic relations between the two countries.

Vietnamese Prime Minister Pham Minh Chinh (center) attends the Vietnam-Singapore Business Forum on February 10. Photo: VNA

Singapore’s Sembcorp agreed with Vietnamese industrial park developer Becamex to build five new industrial clusters worth US$1 billion in Vietnam.

Sembcorp said these would be smart and sustainable Vietnam-Singapore industrial parks (VSIPs) with low carbon emissions.

The Singaporean enterprise said these industrial parks would use real-time monitors to provide distant supervision of energy, water, waste consumption, transportation, and security.
There are now 12 VSIPs in Vietnam, drawing $18.4 billion worth of operating projects and creating more than 288,300 jobs for local people.

Sembcorp Utilities, a member business of Sembcorp, reached an agreement with the Vietnam Oil and Gas Group (PetroVietnam) to develop offshore wind power projects and construct an underwater power grid to export electricity from Vietnam to Singapore.

In a press release, PetroVietnam said that the agreement with Sembcorp Utilities will bolster the development of wind power farms that supply 2.3 gigawatts in 2030.

Furthermore, Singaporean real estate corporation Keppel Land and the HCM City-based Khang Dien Group consented to launch sustainable urban area projects in HCM City.

Vietnam’s national flag carrier Vietnam Airlines and Singapore Airlines also signed a Memorandum of Understanding (MoU) to explore further cooperative opportunities in the aviation industry.

Meanwhile, the Sherpa Company Limited, a subsidiary of Vietnam’s consumer group Masan, received a license that enables the company to invest in Singapore. With the permit, Sherpa will be able to buy a 25% share ownership or nearly 9.4 million shares in the local tech firm Trust IQ Pte. Ltd.

The agreements were signed at the Vietnam-Singapore Business Forum as a part of the official three-day visit of Vietnam’s Prime Minister Pham Minh Chinh to Singapore.

Representative executive of consumer group Masan receives the license to buy shares in Singaporean tech firm Trust IQ, worth US$150 million. Photo: VNA

According to Standard Chartered, the number of Singaporean investors seeking supportive solutions for their Vietnam-based projects has increased by 40% compared to that in 2020, particularly for the efforts made by the Vietnamese Government and businesses to adapt to the digitalization world.

The mutual trust and respect have built a firm foundation for the two countries and their enterprises to set up relations, Michele Wee, CEO of Standard Chartered Vietnam, said.

She added that the two nations' people are very hard-working and share similar cultural characteristics, which will facilitate future cooperation between Vietnam and Singapore.
"Our economic relations with Vietnam are strong, substantive and underscored by multi-faceted cooperation in diversified sectors," Tan See Leng, Singapore's Minister for Manpower cum Second Minister for Trade and Industry, told the forum.

"This is evidenced by trade and investment figures that have grown steadily over the past decade, riding on the stellar growth of Vietnam and vast opportunities presented by a young and vibrant market," he said.

As of May 2022, Singapore was the second largest cumulative foreign investor, with a stock investment amount of $68.7 billion. Singapore's FDI into Vietnam in 2022 amounted to nearly $6.46 billion, making Singapore the largest foreign investor for that year. Bilateral trade increased 16.4% year-on-year to reach $31.3 billion in 2022, demonstrating resilience in the face of the Covid-19 pandemic.

Prime Minister Pham Minh Chinh said that bilateral partnerships prove the two nations have gained better trust in each other, especially in the year that Vietnam and Singapore will celebrate their 50th anniversary of diplomatic relations and the 10th anniversary of strategic partnership.

"The modern development of Singapore is an inspiring story for Vietnam to develop," he said, believing that bilateral relations will further develop.

"I am happy to see the strong turnout of Singapore and Vietnamese businesses today, which speaks volumes on the potential of further partnerships," Singaporean minister Tan said.
"I would also like to take this opportunity to encourage businesses from both sides to forge closer ties and mutually beneficial collaboration, particularly in emerging areas of shared interest."