Big FDI projects to set up camp in southern economic hubs

Vietnam has seen positive signs in attracting foreign direct investment (FDI) in the remaining months of 2018 as a number of international investors are seeking to expand their businesses in the southern key economic zone.

big fdi projects to set up camp in southern economic hubs hinh 0
In the southern province of Dong Nai, Ajinomoto Vietnam Co., Ltd – a subsidiary of Ajinomoto from Japan which has been present in Vietnam for 27 years – plans to build a new 8ha factory for food manufacturing at Long Thanh Industrial Park (IP), according to the subsidiary’s General Director Keiji Kaneko.

The new facility will be the third of its kind based in Vietnam, with one already existing at Long Thanh IP and another at Bien Hoa I IP.

The food and seasoning manufacturer is also looking into the possibility of pouring extra investment in its production of bio-fertiliser in the country, Kaneko said.

Similarly, Bosch Group – the German-based multinational engineering and electronic company – received approval from local authorities to invest an additional US$71 million into its factory at Long Thanh IP, Dong Nai this year. This was the fourth time the facility had received extra funding since 2015.

In June last year, the company announced an additional investment of US$47 million for this facility, following the extra capital injections of US$23 million in 2015 and US$22 million in 2016.

The added funding has been spent to purchase machinery and equipment to raise the manufacturing capacity of its push belt for continuously variable transmission (CVT), which is in high demand from automakers in Asia, particularly Southeast Asia.

Bosch’s total FDI in Vietnam is estimated at about US$380 million at present.

Singapore’s OPV Pharmaceuticals also increased its capital in a project at Bien Hoa II IP by US$47.7 million, bringing the firm’s total investment in the country to nearly US$70 million.

Dong Nai has drawn approximately US$1.3 billion in FDI in the first nine months of 2018, 30% higher than its yearly target. It licensed 81 new projects worth US$605 million and allowed 77 others to add US$694 million. The majority of the new projects have been in the supporting industry.

In Binh Duong, another province in the southern key economic zone, the combined FDI injection from January to September hit US$1.18 billion, fulfilling 85% of the yearly goal, according to Director of the provincial Department of Planning and Investment Nguyen Thanh Truc.

The Horasis Asia Meeting 2018 will also convene in Binh Duong this November, bringing together about 700 Vietnamese and foreign business leaders, said Truc. It will be a good opportunity for the province to lure more investors, he added.

So far, Binh Duong has hosted 3,430 FDI projects worth US$31.29 billion, clinching the first position among localities nationwide in FDI attraction.

Many multinational conglomerates have set their sights on Vietnam amid changing global FDI flow trends, said Le Hoai Quoc, head of Saigon Hi-tech Park’s (SHTP) management board. Since it was founded 16 years ago, the SHTP has attracted US$5.4 billion in FDI, a large amount of which came from global high-tech giants like Intel, Samsung, and Nidec, he noted.

Even more major FDI projects are expected to land in the park in the coming time. Most notably among them is a research and development (R&D) centre of Nidec Corporation, a Japanese manufacturer of electric motors, which is part of the firm’s moves to expand operations in Vietnam. The project’s proposal has been submitted to competent authority for review.

Nidec now operates five projects at SHTP with a total registered capital of around US$500 million, which engage in precision engineering, automation, optical reading heads, magnetic stripe cards, high-precision compact motors, and motor spare parts.

Quoc further unveiled that the negotiation process for a project that produces batteries for Tesla’s electric vehicles to be set up at the SHTP is at the final stage. The project, which will be run by a US-based company, will have an investment of about US$500 million, he added. 

Ho Chi Minh City raked in US$5.47 billion in FDI in the first three quarters of the year, up 50% year-on-year. The FDI flow mostly came from the Republic of Korea (28.1%), Singapore (25.7%), Norway (11%), and Japan (10%).

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