Hoang Mai Huong, managing director of Saatchi & Saatchi Vietnam, says shewas delighted with the recent Ministry of Planning and Investment decision.
Under the agreement, Saatchi is to team up with local partner Sao Hom for a period of five years. Saatchi will have a 70% stake in the $300,000venture.
She predicts other international agencies will follow suit, adding thereare particular benefits in joint venture status for agencies in Vietnam."Sao Hom will gain better access to our company's technology, expertise and customers. While we will gain valuable insight into Vietnamese ways byworking together with a local partner."
The joint venture should help Saatchi win business from purely Vietnamesecorporations, as accounts could now be billed in the local currency (dong), rather than in U.S. dollars as in the past.
The Vietnamese government has at last been swayed by the argument that more direct foreign investment in advertising could help improve the country's deteriorating investment levels. Though still viewed as a pilot project by officials, the Saatchi joint venture should clear a path for other agencies to follow.
Until now, foreign ad agencies in Vietnam have been limited torepresentative office status, although last year an exception was made forLeo Burnett Co., when it was allowed to enter into a business co-operationcontract (BCC) with Vietnamese partner, MT advertising.
Most of the larger agencies however, have criticized the scope of BCC's asbeing far too limited.
Copyright December 1999, Crain Communications Inc.