Early FDI activity promises prosperous year

However, this also puts pressure on the country’s plans for effective measures to attract further foreign investment. On January 6, the northern province of Bac Ninh received the first foreign direct investment (FDI) project of 2016, which involves building a garment plant in the province’s VSIP Bac Ninh Industrial Park (IP).

The new project, developed by Singapore-backed Maple Company Limited, is valued at US$110 million in the total investment capital and aims to produce 22 million items per year.

It is expected to begin operation in early 2018, when the landmark Trans-Pacific Partnership deal (TPP) comes into effect.

On January 7, Saigon Hi-tech Park (SHTP) Management Authority also granted investment certificates to its first projects in the new year, including a US$21 million project from Malaysian investor United More SDN Bhd, which plans to build a plant to manufacture high-precision plastic products for smart TVs.

United More allegedly aims to become a supplier for the US$2 billion hi-tech complex of the Republic of Korea (RoK) giant Samsung Group, Samsung SEHC, which will hopefully commence operations from next month, also at SHTP.

‘Receiving the first FDI project of 2016 signifies a good start to the new year and new chairmanship tenure’, said Nguyen Tu Quynh, chairman of the Bac Ninh People’s Committee at the ceremony where the project’s investment certificate was presented to Maple Company.

SHTP leaders also showed bright faces at the certificate granting ceremony.

2016 is forecast to be another favorable year for Vietnam in at tracting foreign direct investment as the country integrates more deeply and broadly into the global economy through the signing and upcoming enforcement of a raft of new-generation free trade agreements (FTAs), including the TPP.

However, concerns exist over the likelihood of Vietnam attracting as much FDI in 2016 as it did last year, when the country received around US$23 billion in the total newly committed and expanded capital volumes, an increase of 12.5% on-year.

This accomplishment was partly attributable to the landing of five newly-registered and expanded billion-dollar projects with the combined investment capital of US$8.2 billion, surpassing 35% of total FDI volume for the whole year.

While the newly committed capital is difficult to predict, Phan Huu Thang, former director of the Foreign Investment Agency under the Ministry of Planning of Investment, had no doubts about a continued rise in the country’s disbursed FDI in 2016.

‘Disbursed FDI touched US$14.5 billion last year. This year, we may see this figure jump about 10%-15%, or even higher’, Thang stated.