My Thuan Bridge in Vietnam.—File Photo

By Jason Clout

SYDNEY — Australia's assistance in the construction of the My Thuan Bridge in Viet Nam still resonates in commercial dealings in the rapidly developing country.

The bridge project and Australia's reputation as a quality supplier have helped companies gain a foothold in Viet Nam, but Australian SMEs do need to understand local conditions and customs to prosper.

With a population of around 90 million, strong economic growth and its proximity to China, Viet Nam is one of the more appealing markets in Asia.

Good name in Viet Nam

The development director at Lobana, Nigel Macdonald, says the bridge over the Mekong River, which was completed more than decade ago and was a joint venture between the Australian and Vietnamese governments, has helped Australia's commercial reputation.

"Australia has a good name in Vietnam. It's amazing how often the bridge is referred to by locals – it comes up all the time."

Lobana has two arms to its operation – a development business which makes residential and commercial buildings in Viet Nam, and a trading division which deals in aluminium, coffee and fruit juice, among other products.

"A brand which is recognisably from Australia, such as having a kangaroo brand on fruit juice, is likely to be well received in Viet Nam," Macdonald says.

Lobana's property projects include apartments for the rising Vietnamese middle class and expatriates, and low-cost accommodation for the expected influx of workers to areas designated for heavy industry.

Local knowledge

However, he says despite the willingness to trade with Australia there are aspects of the local business culture which should be understood.

Lobana's directors include chairman Young Dung Song, who started trading in seafood and has 30 years of experience in Asia, and Van Thi Nguyen, who has spent time in Viet Nam and abroad.

"They have given us an insight into the culture and language of Viet Nam. Clearly it can be hard to do business through an interpreter, so having language skills is important," Macdonald says.

"Some laws are similar but there are differences of course as well, such as there isn't really the concept of freehold land. You must be prepared to have multiple meetings, but you can also be forced to respond on the spot.

"We had just over two days to make a presentation of what is equivalent to a DA here, but it went well."

Head of global trade at HSBC, Andrew Skinner, says Viet Nam is expected to have an even faster rate of trade growth than China.

"We think it will eclipse the growth in China trade with Australia next decade, growing at around 8 per cent by 2030."

Viet Nam is a low-cost manufacturer and also has a young population – unlike some other countries in the region – which should help its growth, Skinner says. — The Australian Financial Review