Home » Features » Exploring One ASEAN

Exploring One ASEAN

(Second of three parts)

MANILA, Nov 8 – Ho Chi Minh City Infrastructure Investment JSC (CII), one of the largest infrastructure builders in Vietnam, is among the local companies that have had ample experience in dealing with business partners from the Philippines.

Over the past 16 years, CII has built four core businesses: bridge and road infrastructure, water infrastructure, construction and real estate. To fund expansion, it has taken in foreign investors both at the parent company and subsidiary levels.

“We commonly choose a foreign partner based on either their reputation [expertise] or financing capability or both,” Le Trung Hieu, deputy director of capital management at CII, said in an e-mail interview with the Inquirer.

Foreign ownership at CII has so far reached 63 percent, attracting capital from the likes of Vietnam Oman Investment Fund, Ayala Corp., Goldman Sachs, Dragon Capital and PYN Elite, Hieu said.

In 2012, Ayala Corp. invested $21 million to acquire 49 percent of CII Water via Manila Water aside from investing $14 million for a 10-percent direct equity in CII. In 2015, Metro Pacific Tollway Corp. purchased a mix of $75 million of shares and convertible bonds in CII Bridge and Road.

“Regarding the partnership between CII and Manila Water, Manila Water is a strong partner in the water sector not only because of their financing capability but also their experience and expertise derived from their successful water business in the Philippines. This is critical to CII because we are quite new to the whole water sector,” Hieu said.


Asked why many Philippine companies have been attracted to Vietnam, Hieu said there could be many factors “from the top to the bottom.”

“At the top level, Vietnam’s macro [economy] is quite good. Political situation is quite stable. We have a young, dynamic and constantly growing population of currently more than 90 million people. At the bottom level, there are many investment opportunities across many sectors. The government is also trying to improve the legal framework to welcome foreign investment,” Hieu said.

“Furthermore, we feel that the [Filipinos] and Vietnamese are quite similar in their ‘consuming’ behavior. That could also be a reason why many Filipino firms are interested in establishing businesses in Vietnam,” Hieu said.

Asked about key factors that could make partnerships with foreign companies successful, Hieu said mutual understanding was key.

“There are and will be many differences between partners. That is why it is important to have a mutual understanding of these differences and respect the value that each partner brings to the partnership. For example, foreign [companies] may have a strong financing capability and reputable brand names. However, they lack relationships with the local government and understanding about the local market, which are what their local partners are good at,” he said.

Asked why many Philippine companies have been attracted to Vietnam, Vietnamese business man Le Trung Hieu said there could be many factors “from the top to the bottom.”


The Aboitiz group, one of the big conglomerates that recently started regionalizing its business, is among those that have chosen Vietnam as their first host country.

“It has a lot of demographic similarities to the Philippines, nearly a hundred million young population. You’d think it’s a communist country but it’s very business friendly,” said Erramon Aboitiz, president and chief executive officer of Aboitiz Equity Ventures (AEV). “It’s the same story in Indonesia, except that it’s so much bigger (with 260 million people).”

The first business that the Aboitiz group brought overseas was Pilmico Foods Corp., which is into the commodities and food business.

In 2014, Pilmico set up its first Southeast Asian representative office in Jakarta, followed by the creation of another representative office in Ho Chi Minh City in March 2015.

Pilmico was thus able to build its export market, successfully distributing its flour products to Hong Kong, Vietnam, Myanmar, Thailand, Malaysia and Indonesia.


In 2014, AEV also created Pilmico International Pte. Ltd., marking its foray into the overseas feeds business. This unit acquired a 70 percent equity interest in Pilmico VHF Joint Stock Co. (Pilmico VHF), operator of an aqua feed mill in Dong Thap Province in Vietnam.

That same year, Pilmico International also acquired a 70 percent equity stake in feed mill operator, VIN Hoan 1 Feed JSC (VHF) from its parent company, Vinh-Hoan Corp. (VHC) and is set to purchase the remaining shares within five years.

VHF has since then been officially renamed Pilmico VHF Joint Stock Co. It is the fourth largest pangasius aqua feeds producer in Vietnam, with a capacity of 165,000 metric tons (MT) per year. Pilmico VHF’s capacity was ramped up to 270,000 MT in April 2016.

Most recently, Pilmico International acquired a 70-percent stake in feeds company Eurofeed for $3.2 million.

The investment in Pilmico VHF is expected to pave the way for investments in other Asean countries like Thailand, Laos and Cambodia.

Indonesia is next on the Aboitiz group’s expansion program, particularly for its flagship business of power generation.

Aboitiz agrees that it’s better to enter any new overseas market with local partners. “Just like people who come to the Philippines, they look for partners,” Aboitiz said.


Last year, Phinma Education opened Phinma Training Center in Yangon, Myanmar. This is a joint venture with a local partner, Victoria Hospital, one of Myanmar’s leading private medical facilities.

The center—which offers courses on child caregiving, elderly caregiving and special care assistance—was in response to the shortage of healthcare professionals. It is expected to create more job opportunities for Myanmar’s young people.

Phinma Education’s foray into Myanmar was one of the case studies featured by PwC in its latest research on Asean partnerships.

In the research, Phinma Corp. chief executive officer Ramon del Rosario Jr. shared his learnings from this foray: “First, identify your strengths and see if there’s a market for it. Next, study the regulatory environment. One should look into the investment policies of a particular market, and confirm that the market is receptive to investments by Filipinos. Third, choose the right person to manage the business for you.”

Del Rosario said the ball carrier should not only be a technical expert but must also have the personality and self-confidence.

“The ball carrier should be one of your most competent people who can deal with different cultures. Most important, find the right partner. Partners are very critical not so much because of their ability to contribute capital, but because of their ability to share their knowledge about local conditions, market, regulations and experience in maneuvering through the bureaucracy,” he said.

(To be concluded)

This feature was produced as part of the Reporting ASEAN programme (www.reportingasean.net), hosted by Probe Media Foundation Inc. with the support of the ASEAN Foundation.

Read the first of this three-part series: https://www.reportingasean.net/asean-cross-border-partnerships/

Read the third of this three-part series: https://www.reportingasean.net/building-alliance-culture-asean/

Read more: http://business.inquirer.net/240272/exploring-one-asean#ixzz4yZnZ5600


Leave a Comment

© 2024 Reporting ASEAN – Voices and views from within Southeast Asia. All Rights Reserved.

Scroll to top