Germany's Metro AG to crack Vietnam wholesale market

The 120-million-dollar project by Metro's Cash & Carry division would be the first foreign-owned trading, distribution and wholesaling operation in Vietnam.

"We have assurance from the Ministry of Planning and Investment (MPI) that if we submit final papers, they will issue our licence by December 31," Metro Cash & Carry's Vietnam managing director Anastasios Michaelidis told Deutsche Presse-Agentur, dpa.

Last-minute details on land leasing are being finalized, he said. A German official in Ho Chi Minh City, where the firm intends to base its operations, said the Metro licence was "imminent." The MPI declined to discuss Metro's pending licence.

The first of the project's two phases would see construction of three cash-and-carry wholesale complexes - two in Ho Chi Minh City and one in Hanoi - with a subsequent complex built each year for the next five years, Michaelidis said.

Metro is also to assist in the processing of agriculture and aquaculture products such as seafood, as well as the improvement of farmer-to-market distribution networks, cooling and storage.

"We are going to assist in the restructure of the wholesale distribution system," Michaelidis said. Such a move is vital, observers have said, as Vietnam has made commitments to open its trading and distribution sectors to foreign investment and competition in the sweeping bilateral trade agreement it signed earlier this year with the United States.

Michaelidis said the quick 10 months it took from initial negotiations to a pending December licencing was "benchmark" for a 100 per cent foreign firm. "They need to develop this here, and the government realizes it," he said. Germany is currently the 17th largest foreign investor in Vietnam, according to official figures.

Only two other projects this year are expected to eclipse Metro's deal, including a 1.48-billion-dollar integrated gas project with British Petroleum and other investors, and a mobile phone network worth 230 million dollars for Korea's SLD Telecom. Both are to be signed this month, Vietnam has said.

(klei/dpa)