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Ha Tinh newspaper has reported that VFT Industry UG from Germany met with provincial authorities to discuss the development of a stainless steel mill in the Vung Ang Economic Zone (EZ).

The mill is expected to cover an area of 250 hectares and have an estimated investment capital of 1.5 billion euros. Once operational, the mill will have a capacity of 1.1 million tons a year.

Antonia Zahn Webe, CEO of VFT Industry UG, said Ha Tinh has great advantages for the manufacturer to set up a factory there, including favorable transport conditions, abundant labor force, a 137 kilometer coastline and the largest deep-water port in Vietnam (Vung Ang-Son Duong), capable of receiving vessels over 300,000 tons.

The project is the next ‘signal’ for cash flow from the EU to Vietnam. Prior to that, in November 2022, the Danish company LEGO held a groundbreaking ceremony to build a factory worth over $1 billion in the Vietnam-Singapore III industrial park in Tan Uyen, Binh Duong. This is the first large-scale project of LEGO in Vietnam, the sixth factory in the world and the second in Asia.

The disbursement of LEGO’s project has been going rapidly. The investor is preparing its workforce to start production in the second half of 2024.

Analysts say that the opportunity for Vietnam to attract capital from the EU and US has become clearer, especially after Vietnam and the US decided to upgrade their relationship to a Comprehensive Strategic Partnership.

The trade, monetary and technology competition among powerhouses, the Russia-Ukraine conflict, and the EU-Vietnam Free Trade Agreement (EVFTA) are why multinationals are diversifying their supply chains.

Meanwhile, Intel said the group poured another $475 million into its factory in Vietnam late last year, raising its total investment capital in the country to $1.5 billion.

Apple has completed the relocation of 11 audio equipment manufacturing facilities to Vietnam.

In late March 2023, a group of 52 American large corporations, including Boeing, Bell and UPS, came to Vietnam to discuss business and investment opportunities. These include investors operating in Vietnam who want to scale up their investment.

Great opportunities 

Economists have noticed that in the last 10 years, FDI capital mostly came from Asia (Japan, South Korea, Singapore and China), but the new cash flow will be from Europe and the US.

The investment capital from Japan and South Korea alone has reached $150 billion. Meanwhile, FDI from the US and Europe in the future may be much higher.

Vietnam also has expectations for cash flow to the financial market, once the stock market is upgraded (from frontier to secondary emerging market), possibly in 2024. If so, Vietnam will witness business deals worth several billions of dollars instead of ones worth hundreds of millions of dollars.

In its recent report, VinaCapital mentioned the upgrading of the Vietnam-US relationship to Comprehensive Strategic Partnership (CSP) as a historic decision that lays the foundation for further cooperation between the two countries, especially in trade, investment and technology.

The trend of multinationals relocating their global supply chains has been growing rapidly in recent years. Not only Intel and Apple, but other American and European corporations are seeking to expand supply networks and develop new production bases in unexploited areas, including India, Indonesia and Vietnam.

As for EU, the economies in the zone have been relying on China and Russia as supply sources for many years, from gas and energy to materials and markets. The vulnerability to European countries amid geopolitical tensions may force the EU to make long-term plans for its future.

Leading experts have recently stressed that geopolitical tensions are the No 1 enemy of the global economy, not protectionism. Dani Rodrik of Harvard noted this on Project Syndicate.

The FTA with Vietnam and the CSP will be the driving force that urge the EU’s economic groups to shift their investments to Vietnam to take full advantage of preferential tariffs and easily export products to the US.

HSBC, in its latest report, said that despite the gloomy short-term prospects in trade, ASEAN will still attract FDI with a record-high market share of 17 percent.

Manh Ha