Mega-projects could push Vietnam’s FDI to new level

With a series of billion-dollar foreign-invested projects in the pipeline, Vietnam is expected to attain a new record in foreign direct investment attraction this year.

Mega-projects could push Vietnam’s FDI to new level

Local manufacturers are fully capable of processing scrap into export goods

According to the southern province of Binh Duong’s Department of Planning and Investment, a textile and garment project from Hong Kong’s Wai Chi Kai Knitting Company will soon be licensed, and could be the first billion-dollar project of 2019.

Located in Dong An 2 Industrial Park, the Weijia Textiles Vina venture aims to benefit from huge export opportunities given by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Other potential billion-dollar projects include the $4.3 billion US-backed Energy Capital-invested gas-to-power project in the southern province of Bac Lieu, and the long-awaited $4.6 billion ExxonMobil initiative in the central province of Quang Nam.

Up to now, the Bac Lieu People’s Committee has been urging the Ministry of Industry and Trade to fast-track the appraisal process in order to add the gas-to-power project to Vietnam’s Power Development Master Plan VII, finish funding procedures, and then grant an investment certificate to the foreign investor.

In addition to these three mammoth projects, other major plans are finalising procedures to be licensed this year. They include the $500 million project of South Korean-invested Hana Micron, which in mid-April signed a co-operation agreement with the Bac Giang Industrial Zones Management Authority in the northern province of Bac Giang to develop a hi-tech and semiconductor device factory.

Apparel Far Eastern is seeking to increase an additional $610 million in its existing production, while Meiko Electronics is to add $200 million to Vietnam-based facility. Elsewhere, CP Foods of Thai billionaire Dhanin Chearavanont, is planning to invest $200 million in a pork and domestic fowls centre in Vietnam.

 

If these huge projects are licensed this year, it is possible that Vietnam can break the 2018 figure of $35.46 billion of newly-licensed projects, added foreign direct investment (FDI), and stake acquisitions. In the first four months of 2019 the figure reached $14.59 billion, up 81 per cent on-year and reaching a four-year record high. The investments have been said to take advantage of the CPTPP and to ease risks from the ongoing US-China trade tensions.

LG Electronics has announced that it will halt smartphone production in South Korea, putting the future of the second-tier smartphone brand in question amid a shrinking market share and heated competition from Chinese companies. It plans to move its high-end smartphone production from a plant in Pyeongtaek, on the outskirts of Seoul, to a factory in Vietnam’s northern city of Haiphong. With the move, LG is developing its Vietnamese operations into a global production hub in a similar fashion to electronics giant Samsung.

Similarly, leading Taiwanese computer maker Compal Group plans to expand its production capacity in Vietnam to raise the group’s exports to $1.5-2 billion per year, according to Ray Chen, the group’s vice president.

Nguyen Mai, chairman of the Vietnam Association of Foreign-Invested Enterprises, said, “In 2014, Vietnam could not compete with China in FDI attraction, but now it can. China’s changing investment policies have caused foreign investors to exit the country and seek other destinations, including Vietnam and Indonesia.”

According to an APEC survey released recently by global tax and legal services firm PwC, Vietnam tops the targets for cross-border investment among the APEC’s 21 member economies, with net 46 per cent planning to increase funding over the next 12 months alone.

“With major trade deals like the CPTPP, the EU-Vietnam and the ASEAN-Hong Kong free trade agreements on the horizon, Vietnam has the potential to attract even more investment and generate new cross-border business opportunities,” said Dinh Thi Quynh Van, general director of PwC Vietnam.

Christopher Malone, managing director at Boston Consulting Group, said that Vietnam made great achievements in FDI attraction over recent years. “However, to compete in FDI attraction in the future, there are two things that are absolutely critical. The first is the focus on increasing the country’s innovation capacity, and the second is the need for specialisation,” he said. VIR

 
 

Other News

.
Experts unhappy with cement exports, but industry says unavoidable
Experts unhappy with cement exports, but industry says unavoidable
BUSINESSicon  12/10/2020 

In the first eight months of the year, cement companies exported more than 23.5 million tonnes of cement and clinker, an increase of 13.7 per cent year-on-year.

Half of local businesses use IFRS
Half of local businesses use IFRS
BUSINESSicon  12/10/2020 

More than half of companies in Vietnam have been adopting international financial reporting standards to meet investors’ expectations and improve their corporate governance, a survey showed.

Party Resolution boosts marine economy and defence
Party Resolution boosts marine economy and defence
BUSINESSicon  12/10/2020 

The sustainable development of the marine economy in association with the consolidation of defence and security is among the important sections of a resolution from the Communist Party of Vietnam

Japanese enterprises want to expand supply chains in Vietnam
Japanese enterprises want to expand supply chains in Vietnam
BUSINESSicon  12/10/2020 

About 15 out of 30 Japanese firms with overseas production bases say they want to expand and diversify their supply sources in Vietnam, according to a survey by the Japan External Trade Organization (JETRO).

The last quarter’s momentum
The last quarter’s momentum
BUSINESSicon  11/10/2020 

If the Covid-19 pandemic will continue to be well put under control as it is now, Vietnam’s GDP growth in the fourth quarter is likely to be higher than the first three quarters.

Positive outlook ahead for economic growth in 2020
Positive outlook ahead for economic growth in 2020
BUSINESSicon  11/10/2020 

There remains plenty of room to accelerate economic growth moving into the fourth quarter of the year, with domestic consumption and investment set to be the key drivers for Vietnam’s growth during the remainder of the year, according to insiders.

Vietnam to develop livestock sector
Vietnam to develop livestock sector
BUSINESSicon  11/10/2020 

PM Nguyen Xuan Phuc has approved a plan to develop the livestock sector for the 2021-2030 period with a view to 2045.

72% of EU businesses plan to expand in Viet Nam
72% of EU businesses plan to expand in Viet Nam
BUSINESSicon  11/10/2020 

A majority of European businesses in Viet Nam expect to increase their operations in the country, the sixth Business Sentiment Survey of the EU-ASEAN Business Council released on Thursday shows.

VN eyes boosting processed meat industry
VN eyes boosting processed meat industry
BUSINESSicon  11/10/2020 

The husbandry industry is hoped to become a modern economic sector industrialised in all stages from production, processing, preservation and...

Vietnam vows to develop eco-friendly chemical industry
Vietnam vows to develop eco-friendly chemical industry
BUSINESSicon  10/10/2020 

Nguyen Van Thanh, director general of the Vietnam Chemical Agency, speaks about some of the strengths and weaknesses in the 2007 Law on Chemicals.

Banks put pedal to the metal in digital transformation
Banks put pedal to the metal in digital transformation
BUSINESSicon  10/10/2020 

The banking industry has been recently abuzz with digital transformation as lenders embark on their journey to become more tech-enabled to keep pace with disruptive technologies.

12 loss-making mega-projects proceed slowly
12 loss-making mega-projects proceed slowly
BUSINESSicon  10/10/2020 

The assets of the 12 loss-making mega-projects under the Ministry of Industry and Trade (MOIT) total VND59.1 trillion, while total accounts payable is VND63.3 trillion.

Vietnamese businesses wait for new rescue package
Vietnamese businesses wait for new rescue package
BUSINESSicon  11/10/2020 

Most enterprises say they are still experiencing a sharp decrease in revenue, cash flow imbalance and decline in confidence.

Equitisation doesn't necessarily mean a better future for SOEs
Equitisation doesn't necessarily mean a better future for SOEs
BUSINESSicon  10/10/2020 

Equitisation should be a magic wand to improve the performance of a State-owned enterprise (SOE), but in some cases, it is not.

VIETNAM'S BUSINESS NEWS HEADLINES OCTOBER 12
VIETNAM'S BUSINESS NEWS HEADLINES OCTOBER 12
BUSINESSicon  12/10/2020 

Vietnam-UK trade relations will change

Banks push bancassurance amid low credit growth
Banks push bancassurance amid low credit growth
BUSINESSicon  09/10/2020 

Banks are pushing the sale of life insurance products (bancassurance) in the context of low credit growth since the beginning of this year due to the impacts of the COVID-19 pandemic.

Sound direction for Vietnam’s chances of economic revival
Sound direction for Vietnam’s chances of economic revival
BUSINESSicon  09/10/2020 

Despite heavy aftermaths caused by the global health crisis, the Vietnamese economy remains in positive growth in the first nine months of the year on the back of the government’s sound responses to curb the pandemic return.

Reforms to cut unwanted administrative processes
Reforms to cut unwanted administrative processes
BUSINESSicon  09/10/2020 

In a bid to boost institutional reforms towards a modern market economy, further abolishing and reducing business regulations to create a bigger space for the private sector to develop will serve as a new driving force 

Rising handling charges neccessary to advance
Rising handling charges neccessary to advance
BUSINESSicon  09/10/2020 

International shipping lines are expected to face an increase of 12 per cent in domestic container handling service charges at Vietnamese seaports from early 2022, triggering concerns over a possible charge burden on local shippers.

Fish sauce producers in a tight spot
Fish sauce producers in a tight spot
BUSINESSicon  09/10/2020 

Traditional fish sauce is one of the most typical components in Vietnamese cuisine and while its nutritional value has been analysed thoroughly, getting EU customers to consume it more regularly remains a challenge.

 
 
 
Leave your comment on an article

OR QUICK LOGIN