General

Eagles takes billions of US dollars to Vietnam

Trường Lăng

July 5, 2022

General

Eagles takes billions of US dollars to Vietnam

Trường Lăng

July 5, 2022

According to Vietnam Industry Spotlight report, Vietnam will continue be the destination for many foreign investors in 2022.

Industry and manufacturing are still Vietnamese economy’s key sectors. If it is compared to the figure of 2021, FDI market share of the industry is still stable, reaching 60% in the first three months of the year. Total investment capital in the first quarter of 2022 is valued USD 5.3 billion.

In which, newly registered capital is USD 2.1 billion from 84 projects and adjusted capital is USD 2.8 billion from 150 projects in the market.

For capital sources, Singapore and Taiwan continue to be the two countries with the leading total investment in the market, accounting for 18% and 6% market share, respectively. 

Thanks to Lego Group’s development project valued USD 1.3 billion in Binh Duong, Denmark became the leading country in total registered investment capital in Vietnamese manufacturing industry in the first three months of the year.

The Southern key economic region is the nation leading in total newly registered capital of processing and manufacturing plant projects with USD 1.9 billion. This figure is nearly 4 times higher than the total capital of the North.

The statistic figure from the Ministry of Planning and Investment shows that 3 out of 5 production projects with the largest investment scale in the first quarter derived from traditional industries. 

Tay Ninh city has granted the investment certificate to Libra International Investment (Singapore) with a high-class fabric manufacturing project in Thanh Cong industrial park, valued USD 210 million.

Followed by Coca-Cola’s investment of USD 136 million to develop a beverage factory in Phu An Thanh Long An industrial park. 

In addition, Ba Ria – Vung Tau province also received USD 85 million from Shinkong Synethetic Fibers Corporation, an enterprise with the key operation in the production of yarn, weaving and other fields.

Meanwhile, the North continued to develop by producing the goods with high added value. Although there are no significant new registered projects in the first three months of the year, the Northern key economic region has added a large amount of adjusted capital from ongoing projects in the market. 

Typically, the construction project of urban infrastructure and VSIP services is adjusted by Singapore to increase the investment capital by nearly USD 941 million. In addition, Hong Kong adjusted to increase investment capital by nearly USD 306 million at Goertek Vina factory to promote the production of electronic equipment, network equipment. 

South Korea also increased investment capital of USD 920 million for Samsung Electro-Mechanics project in Thai Nguyen city. Thanks to the above investments, Bac Ninh and Thai Nguyen are currently the two regions receiving the second and third highest FDI inflows in the North, accounting for 15.9% and 10.5% of total FDI respectively.

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Improving to attract investment

Assessed Mr. John Campbell, Deputy Director, Savills Vietnam Industrial Services Department, Vietnamese government has done well in encouraging companies to move to Vietnam, especially in high value-added industries for the past years. Vietnam also offers tax incentives for the companies engaged in technology or R&D, renewable energy and smart agriculture. 

“So it can be seen that Vietnamese market’s potential is great. The market has not been absolutely perfect, there is a long way ahead but it is positive to see that the market has attracted more high value-added manufacturing and logistics sectors than the past.” said Mr. John.

Moreover, the shortage of workers because workers are infected with Covid-19 and the backlog of jobs from September 2021. The epidemic situation and the conflict between Russia – Ukraine have also affected the delivery process, speeded up the transporting time to the highest level from October last year until now. Inflation also became a big challenge as input costs increased strongest in nearly 11 years. Prices for oil, gas, raw materials and transportation costs are also increased.

Said Mr. Matthew Powell, Director of Savills Hanoi, the areas with great potential for industrial development in Vietnam, Vietnamese market contains many attractive investment factors. However, enterprises are facing high competition to find the right location. 

Industrial real estate is still concentrated in the areas adjacent to such large urban areas as Hanoi and Ho Chi Minh City and there are the convenient connections to airports and ports. This has made the supply in these areas scarce and the land prices are pushed up.

Depending on the characteristics of each industry, investors will find different development opportunities and advantages throughout Vietnam. Savills expert said each field would have its own requirements. Many enterprises prioritize the criteria of large area, low land price, and accessibility to seaports and airports. 

Therefore, to facilitate to promote the investment in the provinces, Vietnam needs to perfect the transport network, improve infrastructure as well as issue economic support policies. Thereof, FDI capital into the manufacturing sector will be spread evenly across the localities across the country. 

Assessed Mr. Do Nhat Hoang, Director of the Foreign Investment Agency – FIA (under the Ministry of Planning and Investment), many foreign investors are still very confident with the growth rate of Vietnam’s industry and the investment environment in the new normal.

FIA also forecasts the reopening of the border gate from March 15, the new visa exemption policies and the shift of capital flows of European investors due to Russia-Ukraine conflict will support Vietnam in FDI attraction in the coming time.

Source: Vietnamnet

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