Swedish businesses are eyeing more investment in Vietnam

Despite the slowdown in 2023, Swedish companies are optimistic about Vietnam's economic outlook for the coming 12 months.

According to a business climate survey by Business Sweden and the Swedish Embassy in Vietnam, 44 per cent of the surveyed companies planned to increase their investment in the country.

There were 36 Swedish companies in Vietnam who chose to participate in this year’s survey. This does not give a complete picture, but the participating companies do represent a broad spectrum.

In the professional services area, no companies are planning to leave the market, while 56 per cent reported having expansion plans in the nation.

However, companies in the consumer segment showed the most pessimistic outlook, as only 25 per cent of them had plans to further invest in Vietnam, and 17 per cent were planning to leave the market.

In addition, 61 per cent of Swedish companies participating in the survey also reported a profitable financial year in 2022, with 27 per cent reporting break-even or losses – compared to 63 per cent and 30 per cent respectively in 2021.

Though the number of profitable firms showed a slight decrease, companies recording a loss only accounted for eight per cent in 2022, which is the smallest proportion seen in the last three years.

Medium-sized companies performed especially well during 2022, with 100 per cent reporting a profitable year, while small companies suffered the most, with 17 per cent reporting losses.

Newcomers seemed to have a successful year in 2022, as 67 per cent enjoyed profits and no firms experienced losses.

In line with the conservative forecasts for Vietnam's economy in 2023, Swedish companies expressed their concern about their business in Vietnam, with only 47 per cent expecting a higher turnover, compared to last year’s responses of 70 per cent.

At the same time, 39 per cent of Swedish companies anticipate a loss in 2023, which is triple last year’s figures. While some uncertainties remain, businesses are still hoping for better performance in the second half of the year now China has relaxed its lockdown policy.

Numerous prominent Swedish companies, such as ABB, AstraZeneca, Atlas Copco, Electrolux, Ericsson, IKEA, Oriflame, SKF, Volvo, and Tetra Pak, have all established a presence in Vietnam.

With the signing of the European Union-Vietnam Free Trade Agreement, Swedish companies are increasingly showing a keen interest in the country, considering it an important destination for their investment expansion plans.

Statistics from the Foreign Investment Agency under the Ministry of Planning and Investment show that Swedish investors poured nearly $168 million into Vietnam in the first half of 2023, including five newly registered projects worth $154.6 million.

Innovations from Sweden are increasingly prevalent in Vietnam, with climate change forcing a sustainable shift towards new high-tech and digitalised offerings.

Companies are betting on digital transformation and 5G to increase operational efficiency, competitiveness, and sustainability. David Lidén, trade commissioner of Sweden to Vietnam, talked to VIR’s Bich Thuy about the lessons from Sweden in the twin green and digital transition.

Vietnamese innovation leaders JunctionX and BKHolding with the support of the Swedish Embassy in Hanoi are joining the Innovation Pioneers Summit 2020 themed "Changing the way we collaborate”.