Sydney (VNA) – Vietnam is on the risefor Australian investors, said an article published on the Australian FinancialReview ahead of Prime Minister Scott Morrison’s upcoming visit to the SoutheastAsian nation.

The article, by Michael Smith, said Prime Minister Scott Morrison arrives inVietnam, a booming nation of 97 million where growth has remained strong.

Vietnam is on track to this year keep up the GDP growth rate of over 6 percentthat it has maintained since 2000.

Cheap labour, a young population, high education standards, and governmentpolicies which offer tax breaks and other incentives for international firmshave seen a surge in foreign direct investment, according to the article.

Vietnam granted investment licences to more than 1720 projects in the first sixmonths of the year, up 26 percent.

The country, best known to Australians as a laid-back holidays destination, isnow on the radar for big business attracted by its open investment policies,cheap labour and young workforce.

Wes Maas, a former South Sydney rugby league player who founded NSW-basedconstruction materials, equipment and services company Maas Group, first sawthe potential in Vietnam several years ago, the article said.

The company he runs out of Dubbo had already been buying equipment from Vietnamfor 18 years. But when its local partner was taken over, Maas decided to go italone.

Thecompany fast-tracked an initial three-stage plan to build a factory which wouldmake underground mining equipment. Instead, it built the 30,000 square metreplant in one go.

Maas is among the Australians who are also returning to Vietnam, attracted bythe government’s open-door policy, free trade agreements and cheap andefficient labour.

The 315 million AUD plant, which has 320 staff including 45 engineers, openedlast month. Maas said the biggest attraction was finding a skilled workforce topre-build, prepare and manufacture the underground mining equipment it exportsout of Vietnam around the world.

Australia’s SunRice Group acquired a Vietnamese processing mill inthe country's south last year and has established breeding programmes and workswith local farmers to introduce more sustainable and advanced growingpractices.

While Vietnam is an attractive alternative to NSW’s drought-ravaged Riverinawhere SunRice is based, the company was also attracted by its free tradepolicies.

“By inserting ourselves in an integrated supply chain in Vietnam it gives usaccess to markets that we can’t get to from Australia currently,” the articlequoted SunRice Chief Executive Rob Gordon as saying.

Gordon said its 260,000 paddy tonne mill in Vietnam now plays a key role in thecompany's plans to increase global demand for its branded rice product.

Vietnam’s booming tourist trade and rising middle classes means demand forAustralian produce is also on the rise.

 In District 2, a short drive from Ho ChoMinh City's bustling centre, Robert Ameln, whomoved his family from Sweden to Vietnam because they liked the country whiletravelling, runs the local operations for Food Source International, a MiddleEastern-based group importing Australian produce.

The company sells 70 tonnes of Australian produceto Vietnam each year, according to the article.

Australian logistics giant Linfox is also investing in Vietnam. The company,which has had a presence in Vietnam for 13 years, opened a 100,000-square-metresite earlier this year in the country's north. It is one of the largestwarehouse and distribution centres in northern Vietnam. It is double the size ofanything Linfox has in Australia.

There are pros and cons, though, as the country’s infrastructure struggles tokeep pace with the demands of a growing middle class.

As more manufacturing comes in they will have to spend more money oninfrastructure and the port bottlenecks will free up over time. On the flipsideas more manufacturing gets diverted to Vietnam it does put more pressure on theinfrastructure and power, the article said.

Australia exported 5 billion AUD of goods to Vietnam in 2018, making it the14th largest destination. It imported 6.1 billion USD of goods in the sameyear.

According to ANZ, Vietnam accounts for 0.1 percent of total Australianinvestment abroad.-VNA