Opportunities in Vietnam Vietnam is Canada’s 6th-largest export market in ASEAN but the fastest growing of these, exports having expanded 18% per year – and almost doubled – over the last four years. As with the entire Southeast Asian region, exports continue to grow. Canadian exports to Vietnam reached $656.6m at the close of 2015, $321.3 million higher than they were in 2011. With imports from Vietnam expanding even faster, Vietnam has become Canada’s largest bilateral trading partner in ASEAN, with total trade now standing at $5 billion. Agriculture & Agri-Food Agri-food and seafood continues to be an important sector for Canada in Vietnam, occupying an increasing share in Canada's exports to Vietnam. In 2015, agri-food and seafood exports to Vietnam totalled C$353.6 million, up 48.1% from 2014. Vietnam is now ranked the second export destination for Canada in this sector within ASEAN (after Indonesia). Top agri-food & seafood exports to Vietnam include fish & seafood, grains, oilseeds, fur-skins, food industry residues/fodder, pulses, meat & edible meat offal, fruit & nuts. Improved living standards, coupled with a growing and more affluent middle class, present growth opportunities for premium Canadian food products. Vietnamese consumers are shifting their shopping from traditional markets to supermarkets, especially in urban areas. There is potential in the food service sector linked to the growth of the tourism market in Vietnam. A more and more sophisticated retail food economy shows an increasing demand of Vietnamese middle class consumers for Canadian imported products. The on-going restructuring of Vietnam’s agriculture sector, with a focus on added value and sustainability, is a priority locally. This is leading to investment in productivity and efficiency improvement, which should open further trade/service opportunities. On a larger scale, investment is taking place in cattle farming, swine breeding and grain processing, generating more opportunities in live breeding animals, animal genetics, feed ingredients, and grain export. The Government of Vietnam is also investing in animal genetics improvement research which should lead to opportunities in the field of genetics. Defence and Security Vietnam is one of the world’s fastest-growing defence markets and is expected to spend $18.8 billion on its armed forces during the 2013-2017 period. It is expected that Vietnam will continue to modernise its naval and air forces, including with radar systems, frigates, patrol vessels, jet fighters, transport and surveillance aircraft, missiles and armoured vehicles. Immediate areas of opportunity in the Defence sector are related to maritime surveillance with the Navy and the Coast Guard. Opportunities have been identified in the areas of long endurance maritime air surveillance capability, modern C3 (command, control, communications) gear to coordinate the situation off the coast; and modern sensors for maritime surveillance partly to equip newly acquired ships and aircraft with appropriate technology. Vietnam is also hoping to diversify its procurement towards Europe or other Western countries, including the U.S. and Canada. On the Aerospace and Security front, opportunities exist in the area of civil aviation and aircraft, airport security and flight training. Vietnam’s aviation industry has seen strong growth in the past five years with the expansion of young and modern fleets. The rapid growth of the country’s airlines has resulted in a relative shortage of commercial pilots and the need for regional aircraft. Education Canada’s education profile in Vietnam keeps growing. There are roughly 5,000 Vietnamese students currently studying in Canada, contributing upward of $150 million to the Canadian economy and ranking Vietnam high as a source country for international students (number one source country in ASEAN). In addition to recruitment, Canadian educational institutions and associations have shown increased interest in developing partnerships with Vietnam to co-deliver programs and curriculum, set up articulation/pathway

programs, as well as to collaborate in student/faculty exchanges for research purposes. There are currently 5 successful partnerships delivering Canadian programs locally and more partnerships are foreseen in the near future. Forest Products

Vietnamese furniture and wood export turnover in 2014 was US$6.23 billion, an 11.5% increase compared to 2013. As of November 2015, Vietnam’s exports in this sector reached US$6.1 billion, an increase of 9.5% yearon-year. Vietnam is now the 6th largest wooden furniture exporter in the world and the 2nd largest in Asia, behind China. Over the last 7 years, turnover of wood exports has increased by an average of 15% annually. Its most notable markets are the U.S., Japan and Europe, which together account for 80% of exports. The Vietnamese domestic market has also expanded rapidly, growing 40% over the last five years, reaching a value of US$2.25 billion. With the TPP and Vietnam-EU FTA, this growth is expected to continue. These growing furniture exports have translated into substantial demand for legal hardwood and softwood materials, which the domestic market cannot, or can no longer, supply. As of November 2015, Vietnam’s imports of raw lumber reached US$ 1.86 billion. Large manufacturers and distributors recognise the value of Canadian wood products and are more and more turning to Canada to supply high quality hardwoods. Information and Communications Technologies Thanks to international investment in the area of high-tech manufacturing, ICT has become a key industrial sector in Vietnam, contributing 7% to Vietnam's GDP annually. Telecoms revenue growth rate for 2016 is estimated at 8.5% y-o-y whilst Vietnam's average annual growth rate in the ICT sector is around 23%. It is not only an stand-alone industry but also forms a critical input into other sectors. Total estimated revenue of the industry in 2015 is estimated at US$16.7 billion, an increase of 8% y-o-y. Vietnam aims to develop to bring its communication technology infrastructure on par with regional and global standards. Vietnam's telecommunications sector is still among the world's fastest growing, harboring significant potential given that the bulk of consumers are using basic, low-value services. As of December 2015, Vietnam had 36 million subscribers of 3G. In 2016, 4G is being introduced in major cities. Leading 4G services such as video on demand and video streaming are already developing in anticipation of the network upgrade. In addition to 4G, technologies of interest to Vietnamese companies include: internet of things, machine to machine (M2M), big data & analytics, fin-tech, applications for healthcare, education and oil & gas. Oil and Gas As the third largest oil producer in Southeast Asia, Vietnam’s oil production has been maintained at between 310,000 to 400,000 barrels per day. New discoveries in 2011 have increased the country’s proven reserves to 4.4 billion barrels, one of the largest in Asia after China and India. PetroVietnam, a state-owned company, is involved in all oil and gas production via its subsidiary, PVEP (PetroVietnam Exploration and Production) and its joint ventures with international oil companies. Repsol, Exxon Mobil and Zarubezhneft are some of the largest international producers operating in Vietnam. The oil and gas industry in Vietnam has been developing for more than 25 years, yet still offers great opportunities for suppliers of both services and equipment, in all segments of the market, from upstream to midstream and downstream, such as:       

Enhanced oil recovery equipment and solution; Deep water drilling and production; Solutions for the management from back office to exploration and production; Equipment and services for refineries; Equipment and services for LNG terminals; LNG supplies; and Popular products for upstream and downstream operation such as valves, pumps, pipes etc.