With a growing number of multinationals looking to set a foothold in Vietnam, the country is having a great opportunity from a new wave of foreign investment, according to the trade ministry.
LG is expanding operation in Vietnam.
Major global tech firms, including LG, Panasonic, or Foxconn, are looking to shift or expand production in Vietnam in the post-Covid-19 pandemic period, a report from the Ministry of Industry and Trade (MoIT) has stated.
With a growing number of multinationals looking to set a foothold in Vietnam, the country is having a major opportunity from a new wave of foreign direct investment, VnExpress reported, citing a semi-annual industrial production report by the MoIT.
According to the ministry, South Korean tech giant LG has moved its entire production facility to northern city Hai Phong.
Chairman of the Hai Phong People’s Committee Nguyen Van Tung at a recent government conference said the city was seeking government approval for the expansion of an industrial park ahead of LG's plan, following the corporation’s first plant in the city in 2015.
In addition to LG, Panasonic Vietnam is preparing for the relocation of a production chain for refrigerators and washing machines from Thailand, scheduled to take place in early September, informed the MoIT.
Apple also plans to produce 30% of its total classic AirPods, equivalent to three to four million units, in Vietnam via Foxconn, after having started the process in March.
Foxconn currently has a production plant in Bac Giang and is proposing three social housing projects in the northern region near its industrial parks with a total investment of over VND7.4 trillion (US$319.47 million).
Specifically, the three projects would be located in Bac Ninh, Bac Giang and Vinh Phuc. Among them, the one in Bac Giang is expected to be the largest with an investment of VND3.42 trillion (US$150 million) on an area of 16.7 hectares. The remaining two projects in Bac Ninh and Vinh Phuc have investment capital of VND2.92 trillion (US$125 million) and VND1 trillion (US$43.17 million), respectively.
Vietnam’s early containment of the Covid-19 pandemic compared to other parts of the world is considered a major factor attracting investment to the country.
Despite the impacts of the Covid-19, an increase in capital inflows into the field of electronic production has helped the country maintain a positive growth rate in the first half of the year.
Data from the MoIT demonstrated the Index of Industrial Production (IIP) for electronic, optical products, and computers rose 29.3% month-on-month in June and 21.7% year-on-year.
Exports of these products during the period stood at US$19.3 billion, up 24% year-on-year, while the turnover of phones and parts was US$21.5 billion.
The MoIT forecast electronic production would continue to be affected by the Covid-19 pandemic, as demand from major markets in the US or Europe is expected to stay low for a foreseeable future.
Samsung anticipated a decrease in production capacity and revenue in this year due to Covid-19. As a result, Samsung Vietnam has revised down its export target to US$45.5 billion this year, down from US$51.4 billion in 2019. Hanoitimes
The Ministry of Industry and Trade (MoIT) has proposed the Government to allow petrol and oil businesses to transfer stakes to foreign investors, but not exceeding 35 per cent.
Preferential tariffs and incentives for land access are not enough to woo investors looking to move operations out of China, experts say.