Interview with Tomaso Andreatta

Why is Vietnam the ideal destination for Italian exports? Quanto è cambiato il Paese, e quanto uscirà rafforzato dalla pandemia rispetto alle altre nazioni dell’area ASEAN? Octagona asked these questions to Tomaso Andreatta, who has lived in Vietnam for over 12 years:, Indochina Chief Representative of Intesa Sanpaolo Bank, who offered very interesting insights and data on business opportunities in Vietnam with his direct experience.

Born in Milan, Andreatta ha frequentato la UWC of the Atlantic nel Regno Unito, l’Università di Bologna (Bachelor's degree with honors in Pure Economics) and UCLA (MBA in Finanza e Strategia). Dal 1985 al 1998 ha lavorato sulla progettazione di prodotti derivati e nel debito mercati dei capitali con varie banche d’investimento, poi con istituzioni finanziarie M&A in Europa, Argentina e Hong Kong. Since 2008, he has been with Intesa Sanpaolo; he was also the founding president of Icham, the Italian Chamber of Commerce in Vietnam.; Finally, since 2013 he has been Vice President of EuroCham and became co-chairman of VBF in 2018.

Through this great experience, Tomaso Andreatta thus offered us a comprehensive view of the important developments Vietnam has been experiencing in recent years, its relations with other states, and sulle maggiori opportunità per l’export italiano: riportiamo di seguito, in esclusiva, l’intervista integrale.

Dr. Andreatta, you who have lived in Vietnam for many years, what do you think have been the biggest changes in the country?

I've been here since 2008, and some of the changes are clearly visible: the skyline of Ho Chi Minh City, the country's economic capital, has changed from horizontal to vertical; the roads have been widened and enhanced with overpasses to make way for cars that are increasingly replacing motorcycles; from just one bridge over the Saigon River, there are now four visible from my window. At the same time, the country has changed its level: it has become the main recipient of productive investments in ASEAN, it has more than doubled its GDP and even more its foreign trade, è accettato come Paese leader e buon “cittadino del mondo”, come ha dimostrato gestendo il seggio nel Consiglio di Sicurezza dell’ONU e la presidenza ASEAN. Dopo la crisi finanziaria del 2008 ha ristrutturato l’economia, che comunque da oltre 20 anni Continues to grow at annual rates exceeding 6%. Even in 2020, Covid year, GDP grew to nearly 31% in Q3, and is expected to rebound to over 61% this year.
All this while maintaining stability in the economy and society.

How would you define Vietnam's relations with other states in the ASEAN region?

Vietnam has gone from being a “young” country in the treaty to one of the economic and political leaders. It is increasingly involved in positive proposals for the development of the economic area and has become the main attractor of FDI. Foreign Direct Investments) of the area. Vietnam's multilateralist conviction has shaped many of its policies towards ASEAN partners and is key to managing complex issues such as territorial waters in the South China Sea. Relations with its Indochinese neighbors, traditionally excellent as Vietnam placed elites in power in the 1980s who still manage Laos and Cambodia today, suffer because Vietnam cannot balance the resources China invests in the area, making it an increasingly privileged partner.

This year, the Free Trade Agreement between Vietnam and the European Union, the EVFTA, entered into force. How do you believe this Treaty could have an impact, and what are the sectors where Italian companies have the greatest opportunities in terms of exports to Vietnam?

In this initial period, there has been a drop in European exports to Vietnam, particularly in the industrial machinery sector, due to logistical difficulties and a reduced propensity to invest during the crisis, which also affected Vietnamese companies. We expect a strong rebound after the emergency ends., provided that our companies make an extra commercial effort: in Asia, you cannot sell from afar or with a trip of a few days, and you must have a stable on-site organization for both sales and after-sales service.

The most promising sectors are agri-food, packaging, machinery and construction materials, and pharmaceuticals., but also everything related to personal care, increasingly important in Vietnamese culture, and the’goldsmithing, it is enough to remember that Vietnam is the country in the world with the highest per capita gold ownership. environmental sustainability it becomes more and more important and our companies in the industry can offer machines, products and services in this area in strong growth. Italian agricultural and livestock products could have a good market, but a very long authorization process is necessary to open it: the first container of apples from Tyrol received approval after five years of work, and even in the wine sector, every new label has a very long process.

What about in terms of imports?

In the first six months of the treaty's impact Vietnamese exports increased compared to the same period last year.. Almost 65,000 certificates of origin for all types of products. In particular, for shrimp, it was a triumph. Being able to offer goods with a clear certificate of origin and gradually a quality ever closer to that requested by European consumers will favor traditional Vietnamese products, generating either higher margins for Italian distribution or savings for our consumers. There are few goods currently produced in Vietnam that directly compete with Italian ones, so the effect will be positive. And for rice, the indica variety that so worries Lombardy producers, we are well protected by quotas.

Vietnam is often described as a country that will emerge stronger from the COVID-19 crisis that is affecting all countries and their economies. How do you assess the Vietnamese government's management of the emergency, and in what sense do you believe the country can emerge stronger from it?

The whole world envied the freedom of movement without negative consequences that Vietnam offered its inhabitants as soon as the first wave of Covid-19 ended in the spring of 2020. In the second quarter of last year Vietnam's economy suffered like its neighbors, but starting in the summer, there was a recovery that allowed it to end the year with enviable growth compared to all other countries.. La velocità di decisione, forse ispirata dalle raccomandazioni di Carlo Urbano durante la crisi della SARS, l’implementazione chiara e coerente delle misure di protezione, prima fra tutte la chiusura delle frontiere, sono state estremamente efficaci. Certo, non avendo sofferto direttamente, il governo vietnamita sembra avere meno fretta degli altri nei suoi obiettivi di vaccinazione della popolazione, il che potrebbe ridurre la mobilità esterna nel prossimo futuro. Il XIII Congresso del Partito Comunista del Vietnam ha scelto i leader per i prossimi 5 anni all’insegna della stabilità: rinnovando alcune cariche fondamentali ma riconfermando molte persone di esperienza e proponendo una continuità di governo che potrebbe permettere un celere avanzamento delle riforme già impostate.

What would you recommend right now to Italian companies looking at Vietnam?

First, to study the’Strategic opportunity to open a market where they didn't have it or it was limited, to understand that in Asia You don't do business in appreciable volumes without a local presence that provides visibility., credibility and substance to companies wanting to enter these markets. Vietnam should not be seen solely as an outlet market in itself, but It's an extraordinary platform for selling in ASEAN and, with a little effort, in Japan, China, and South Korea. Many Italian technology companies sell globally because they are part of Germany's value chain, which possesses international finance and distribution capabilities unmatched in our country of SMEs. It's the same in Asia, but the value chains that matter for distribution are those of Japan and Korea. By doing so, Italian companies could also implement a defensive strategy that would protect them in the medium term from the risk of their products being developed in this region by local companies. Investment in a plant in Vietnam is lower than in almost all other countries with comparable productivity, and it's in a part of the world that continues to grow at a faster pace than its neighbors. 

Let's talk about the bank you represent in Vietnam, Intesa Sanpaolo, and the activities you carry out: how can Italian companies be supported thanks to your local presence?

Intesa Sanpaolo's local presence enables unparalleled understanding and monitoring of Vietnam. Being here allows us to distinguish and choose our partners well and to judge those that Italian companies consider. We have some top-quality local credit institutions as our banking counterparties that take excellent care of our clients.

From here we realize which strategies work in this market and which ones work less. Our cooperation with the Italian Chamber of Commerce in Vietnam, with the European Chamber, and with the Vietnam Business Forum, which represents all global chambers of commerce present in Vietnam, offers us different and complementary contacts, opportunities, and perspectives.

From the branches in Singapore and Hong Kong we can offer financing in offshore hard currency to Italian companies and clients worldwide, commercial financing with letters of credit, discounts and confirmations, bid and performance bonds, project finance.

As a bank increasingly recognized globally for its sustainable and green profile, we can offer advantageous products designed for companies investing in the circular economy and energy efficiency. This is a new front of growing and significant importance, so much so that Vietnam last year passed a historic law on environmental protection. Finally, we pay the utmost attention to innovation and growing entrepreneurship in sectors such as IT and the Web.

Octagona thanks Tomaso Andreatta for his willingness to answer our questions.