New investment wave starts despite COVID-19

The new wave of foreign investment triggered by COVID-19 and US-China trade tensions is becoming more visible as outstanding overseas ventures are expanded.

Multinational corporation Techtronic Industries (TTI), which is developing a $650 million plant complex in Saigon High-tech Park, recently met with more than 100 domestic suppliers to find a vendor for its project, which will focus on manufacturing hand-held cordless power tools and outdoor power equipment while being at the forefront of lithium-ion batteries, digitally-controlled motors and tools, and wireless applications.

new investment wave starts despite covid 19
TTI expects to have an annual production value of $1.5 billion by the third year and achieve up to $3 billion by the sixth year

Vietnam is very attractive for TTI due to its deep integration into the global market and recent free trade agreements, especially the ASEAN-Hong Kong Free Trade Agreement which came into effect a year ago, and the new EU-Vietnam Free Trade Agreement.

According to Nate Easter, executive vice president of Global Sourcing and Outdoor Product Operations from TTI, domestic vendors would be essential to ensuring the success of its incoming complex, which is the second-largest plant in its global network and houses a research and development (R&D) centre.

TTI expects to have an annual production value of $1.5 billion by the third year and achieve up to $3 billion by the sixth year. It also targets $1 billion in annual localised supply and expects to increase local suppliers from 80 now to 150 over the next few years.

TTI was not the only company which has processed operations in Vietnam in the first half of the year.

In February, Heineken Vietnam also poured an additional $68.8 million into its factory in the southern coastal province of Ba Ria-Vung Tau. The beer producer was green-lit by the local authority to raise its investment capital from $312.5 million to $381.3 million.

With the additional funding, Heineken Vietnam expects to increase the annual capacity of its factory in Ba Ria-Vung Tau from 610 million litres to 1.1 billion litres in 2020.

Meanwhile, in March, the US' Universal Alloys Corporation (UAC) held the inauguration ceremony for the first phase of it saerospace component factory in the central city of Danang. With registered investment of $170 million, the factory aims to manufacture and install aerospace components from aluminium alloys and composite.

It will be capable of manufacturing and assembling around 4,000 aircraft components, all for export. Once put into operation, it is estimated that annual export revenues will reach $25 million by 2021, $85 million by 2022, and $180 million after 2026.

UAC is a leading global manufacturer of aircraft components for aerospace companies such as Boeing, Airbus, Embraer, Bombardier, and their associated supply chains. This is its first facility in Vietnam and Asia as a whole to serve the global aerospace industry.

Last month Qualcomm Vietnam, a subsidiary of Qualcomm Technologies, Inc., officially opened an interoperability testing laboratory located in Hanoi, the company’s first R&D lab in Southeast Asia.

 

With these new facilities, Qualcomm Vietnam is further strengthening its commitment to the country and further enables local enterprises to innovate and deliver Vietnamese-made products.

In addition, Ba Ria-Vung Tau also granted approvals and investment licences to several projects, including those of Japan-based Seiko PMC Corporation ($28 million), SeAH M&H Vietnam ($35.3 million), and Arakawa Chemical Industries ($45.6 million).

According to Michael Kokalari, chief economist from Vinacapital, a new wave of foreign direct investment (FDI) into Vietnam is imminent. “This is being driven by global events, including the US-China trade war, the ongoing pandemic, and other factors,” Kokalari said in his latest statement released in June.

The amount and quality of this new wave of FDI are largely up to local policymakers, he added, because there are few countries in the world as intrinsically attractive to multinational manufacturers as Vietnam.

Kokalari cited that this next wave of FDI will have a bigger impact on Vietnam’s economy than previous inflows because multinationals now have an incentive to help local firms “move up the value chain” in order to build supply chains in Vietnam capable of supporting those foreign-invested companies.

The EuroCham Whitebook 2020 released at the end of June stated that Vietnam’s stable macro-economic climate and single digits of inflation are increasing the confidence of investors in this country.

“Since becoming a member of the World Trade Organization in 2007, Vietnam has continued to reform its legal framework so that it is better aligned with global standards. As a result, the country has become more attractive to foreign enterprises and international investors,” stated the Whitebook.

In particular, Vietnam’s low cost of doing business, strong economic growth, and business-friendly economic environment make it an attractive destination for FDI, it added. VIR

Van Ngoc

More foreign investment inflows into Vietnam

More foreign investment inflows into Vietnam

The Sino-American trade war together with supply chain disruptions due to the novel coronavirus pandemic has prompted many an investor to plan to relocate their production facilities in order to reduce their reliance on China. 

Vietnam’s outward investment rebounds

Vietnam’s outward investment rebounds

Outward investments, which fell for a short time because of Covid-19, resumed again after the social distancing policy ended.

 
 

Other News

.
Vietnam Airlines plans to sell nine planes due to financial woes
Vietnam Airlines plans to sell nine planes due to financial woes
BUSINESSicon  06/08/2020 

Vietnam Airlines is planning to sell nine A321CEO planes to optimize its fleet and improve its cash flow, as the national flag carrier’s revenue has dropped sharply due to the Covid-19 pandemic.

Maximum $130,700 fine for listing violations: Draft decree
Maximum $130,700 fine for listing violations: Draft decree
BUSINESSicon  06/08/2020 

Public companies may receive a penalty of VND2-3 billion ($87,120-$130,700) for falsifying share listing and trading documents under a proposal from the Ministry of Finance.

Furthering developmental ties with dynamic Singapore
Furthering developmental ties with dynamic Singapore
BUSINESSicon  06/08/2020 

Vietnam and Singapore are witnessing their heyday in bilateral and multifaceted cooperation.

Wide impacts to be made with new law changes
Wide impacts to be made with new law changes
BUSINESSicon  06/08/2020 

Effective in 2021, the amended laws on Enterprises, Investment, and Public-Private Partnership are expected to entail breakthrough changes to Vietnam’s business and investment landscape in the coming time, 

Decisive actions to achieve goals
Decisive actions to achieve goals
BUSINESSicon  06/08/2020 

The Ministry of Planning and Investment is currently working on possible scenarios for the upcoming period amid the ongoing developments of the global health crisis.

Millenium to develop $15 billion LNG project in Khanh Hoa
Millenium to develop $15 billion LNG project in Khanh Hoa
BUSINESSicon  06/08/2020 

If the $15 billion LNG project of Millenium Group is approved, it will contribute to making the Nam Van Phong area the largest LNG centre in Southeast Asia.

Rebound likely despite bumpy roads
Rebound likely despite bumpy roads
BUSINESSicon  06/08/2020 

Despite a serious dip in local production caused by the health crisis, Vietnam is expected to be one of the fastest-growing nations worldwide this year, with the economy forecast to stay among the few nations with positive growth.

Unique advantages can pull Vietnam out of uncertainty
Unique advantages can pull Vietnam out of uncertainty
BUSINESSicon  06/08/2020 

In life, economic and health gains are not always equal. This is true for individuals and for countries. While Vietnam has managed to contain the pandemic so far, its economy has been hurt in recent months. 

Hanoi’s Old Quarter businesses bear brunt of COVID-19 impact
Hanoi’s Old Quarter businesses bear brunt of COVID-19 impact
BUSINESSicon  06/08/2020 

The second wave of the COVID-19 epidemic to hit Vietnam has continued to deal a devastating blow to small businesses, travel agencies, and tourist accommodations in the Old Quarter of Hanoi due to the suspension of operations.

Container handling charge increases proposed to attract investment in seaports
Container handling charge increases proposed to attract investment in seaports
BUSINESSicon  06/08/2020 

Container loading and unloading service charges should be increased to approach the regional level so investors would not feel hesitant when pouring money into developing seaports.

Policies encourage automakers to assemble cars in Vietnam
Policies encourage automakers to assemble cars in Vietnam
BUSINESSicon  06/08/2020 

 Several automakers are considering assembling their best-selling models in Viet Nam due to the Government’s policy of zero import tariffs on components and a 50 per cent reduction in registration fees.

Thai firms acquire wind power farm in Ninh Thuan
Thai firms acquire wind power farm in Ninh Thuan
BUSINESSicon  06/08/2020 

Thailand’s Banpu and its power business arm Banpu Power (BPP) have joined forces to acquire El Wind Mui Dinh, an onshore wind farm in the south-central province of Ninh Thuan, in a deal worth $66 million.

EVFTA smooths the way for Vietnamese farm produce
EVFTA smooths the way for Vietnamese farm produce
BUSINESSicon  06/08/2020 

The EU-Vietnam Free Trade Agreement, at its core, aims to liberalise both tariff and non-tariff barriers on key exports of both sides over a period of 10 years.

Mountainous areas and islands need investment
Mountainous areas and islands need investment
BUSINESSicon  07/08/2020 

PhD Doctor Le Quoc Phuong, former deputy director for the Information Centre for Industry and Trade, under the Ministry of Trade, talks on key requirements in trade development in mountainous areas and islands.

Vietnam receives positive view in global exports as EVFTA takes effect: report
Vietnam receives positive view in global exports as EVFTA takes effect: report
BUSINESSicon  05/08/2020 

Vietnam is expected to continue growing its share of global exports despite decline amid the resurgence in the COVID-19 pandemic after three months of no local transmissions, according to an HSBC report.

Local banks are racing to catch digitisation trend: expert
Local banks are racing to catch digitisation trend: expert
BUSINESSicon  05/08/2020 

Vietnam has seen a digital wave in the finance-banking industry, with many lenders investing significantly in digitisation, experts have said.

Experts call on Vietnamese government to aid businesses again
Experts call on Vietnamese government to aid businesses again
BUSINESSicon  05/08/2020 

Amid the new COVID-19 outbreak, experts have suggested the Government offer another credit support package to help enterprises, especially large businesses in key areas.

Vietnam's textile and apparel firms lack orders for the last two quarters
Vietnam's textile and apparel firms lack orders for the last two quarters
BUSINESSicon  05/08/2020 

The Ministry of Industry and Trade said that textile production increased by 1.8 per cent, while clothing production decreased by 4.6 per cent in the first seven months of this year over the same period last year.

New power pricing mechanism to be applied next year
New power pricing mechanism to be applied next year
BUSINESSicon  05/08/2020 

The common retail power price is expected to be applied at the beginning of next year together with the current tiered pricing mechanism, said Deputy Minister of Industry and Trade Do Thang Hai.

VN tra fish companies see profits slump in pandemic
VN tra fish companies see profits slump in pandemic
BUSINESSicon  05/08/2020 

Multiple tra fish companies suffered losses due to falling export prices and lower orders, focusing instead on the domestic market amid the COVID-19 pandemic.

 
 
 
Leave your comment on an article

OR QUICK LOGIN