Expanding economic cooperation with Saudi Arabia

Increased imports, expanded investment

On October 18, in Riyadh – the capital of Saudi Arabia, Minister Dien attended PM Chinh’s meetings with the leaders of three major groups of Saudi Arabia and the Gulf region: Zamil, Lulu, and Ajlan & Bros.

At the meetings, PM Chinh affirmed that political and diplomatic relations between Vietnam and Saudi Arabia have developed based on mutual trust, and that there’s still room for increased bilateral economic cooperation. “Vietnam is willing to create the most favorable conditions for Saudi Arabian businesses to expand operations in the country according to the law,” he emphasized.

Minister of Industry and Trade Nguyen Hong Dien attends the meeting between PM Pham Minh Chinh and the Chairman of Zamil Group

PM Chinh encouraged the three Saudi Arabian groups to expand investment to new areas, increase the localization rate and modernize production with sustainable and environmentally friendly technology.

Shehim Kottilingal, Director of the Lulu Group, shared its plan to build new factories and storage facilities in Vietnam. He said that the group will increase imports from Vietnam by two to three times, including cashew, fish, high-quality rice, textiles, garments, leather and footwear.

The PM requested Lulu to cooperate with Vietnamese partners to expand its supermarket chain in Vietnam – a market with about 100 million consumers, as well as to penetrate the ASEAN market through Vietnam.

The leader of the Vietnamese Government agreed with Lulu’s proposal for the opening of a direct flight route between Vietnam and Saudi Arabia to facilitate bilateral trade and investment.

Creating impetus for economic cooperation

On October 19, Minister Dien accompanied PM Chinh to attend a Vietnam-Saudi Arabia business forum at the headquarters of the Federation of Saudi Chambers of Commerce and Industry. Dien spoke of the fruitful results of bilateral cooperation over the past 25 years, especially in the field of trade.

Trade between Vietnam and Saudi Arabia has grown continuously during the past decade and exceeded US$2.7 billion in 2022, a 32.4 percent increase compared with 2021. Minister Dien affirmed that Saudi Arabia is currently one of Vietnam’s major partners in the Middle East region.

Dien said that Saudi Arabia is the largest economy in the GCC region, while Vietnam has become the third largest economy in ASEAN with the annual gross domestic product (GDP) of nearly US$410 billion and a top-20 economy in terms of international trade with annual import-export value of approximately US$735 billion. Vietnam is a full member of 16 free trade agreements involving most major economies in the world.

Minister of Industry and Trade Nguyen Hong Dien addresses the Vietnam-Saudi Arabia business forum - photo: Ministry of Industry and Trade

Vietnam has become a safe and attractive investment destination with nearly 36,000 projects with the total registered capital of more than US$435 billion of foreign investors from 141 countries and territories. Given these results, the United Nations Conference on Trade and Development has listed Vietnam among the world’s top 20 countries in terms of foreign direct investment (FDI) attraction.

Minister Dien affirmed that there’s still much room for Vietnam and Saudi Arabia to increase investment and business cooperation. Saudi Arabia can import from Vietnam a wide range of products such as electronics, textiles and garments, leather and footwear, farm produce, seafood, processed food, consumer goods, construction materials, furniture, handicrafts, and export to Vietnam petroleum and petrochemicals. Saudi Arabia can also cooperate with Vietnam in the fields of services, oil and gas exploitation, and finance.

Saudi Arabian companies can explore opportunities to invest in Vietnam in the fields of energy (oil and gas, clean energy, renewable energy, smart energy, energy infrastructure development, and green energy transition), industries (engineering, processing and manufacturing, new materials, electronics, chemicals, support industries), and services in the fields of finance, banking, and logistics.

In the framework of the forum, Minister Dien and PM Chinh witnessed the signing of some cooperation documents between institutions and businesses of the two countries.