ASEAN KEY DESTINATIONS
Vietnam develops ports to draw Chinese exports
Vietnam is pouring $21 billion into building ports for the world’s largest container ships in a drive to draw export industries from China.
The investment may propel the port complex near Ho Chi Minh City into the ranks of the world’s top 15 ports within a decade, said Malcolm Gregory, chief commercial officer at the $270 million Cai Mep International Terminal Co. His optimism underlines the former Saigon’s transformation less than four decades after being overrun by Communist forces.
Companies from Nokia Oyj to Intel Corp. are shifting production to Vietnam, lured by cheaper labor compared with China and deeper ports for container vessels sailing directly to the U.S., Europe and Asia. The government aims to boost shipping volume more than 400 percent this decade in the quest for economic growth. Exports make up about 75 percent of Vietnam’s gross domestic product.
“Vietnam is so heavily dependent on external demand that getting the entire system to work, not just ports, but roads and railways too, and making customs work faster, is a big part of the story,” said Jonathan Pincus, the dean of the Harvard Kennedy School’s Fulbright Economics Teaching Program in Ho Chi Minh City.
Port manager Vietnam Container Shipping Joint-Stock Co. is among stocks worth buying, says Cha Kyung Jin, the Seoul-based head of investment at Golden Bridge Asset Management Co. He pointed to the untapped potential in a nation that last year exported less than half as much as Thailand, whose population is about a quarter smaller.
“We want to increase our investment in Vietnamese companies, including Vietnam Container Shipping,” he said. “Their port industry offers a lot of potential as their international trade is growing.”
Shares in the Vietnamese company, based in Haiphong, east of Hanoi, have risen 1.6 percent this year. Another shipping enterprise, General Forwarding & Agency Joint-Stock Co., is a “good buy” after sliding since 2009, said Ho Chi Minh City- based Nguyen Hoai Nam, an analyst at Kim Eng Vietnam Securities.
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