After setting a record of 14.59 billion USD in the first 4 months, foreign investment in Vietnam is forecasted to continue to accelerate in the coming time. Most likely, the first billion-dollar project will land in Vietnam this year.
Although mentioned a lot, but the 4.6 billion USD project of Exxon Mobil Corporation (USA) probably will not be the first billion-dollar project granted investment certificate in Vietnam this year. Instead, it will be the Weijia Textiles Vina Project of Wai Chi Kai investor (Hong Kong). Under the plan, Wai Chi Kai will invest 1 billion USD to build a factory specializing in the production of knitted collar products, wrist bands, ribbed fabric, textile fabrics, textile accessories, fashion accessories… The project was implemented in Dong An 2 Industrial Zone (Hoa Phu Ward, Thu Dau Mot City, Binh Duong Province).
Meanwhile, Bac Lieu Provincial People’s Committee is also urging the Ministry of Industry and Trade to speed up the appraisal process and supplement the project LNG Bac Lieu Gas Thermal Power Plant of investor Energy Capital (USA), investment capital 4.3 billion USD in Electricity Planning VII. Although the investment procedure for a power project is not simple, Bac Lieu hopes that the Project will soon be granted an investment certificate, with a scale of 3,200 MW. The reason is quite understandable, this project will add 3,000 billion VND/year to the local budget.
Besides the above billion USD projects, a series of other large-scale projects may soon be granted investment certificates this year. In which, there is a 500 million USD project of Hana Micron investor (Korea).
Information revealed that, in the middle of April 2019, Hana Micron has officially signed an investment cooperation agreement with Bac Giang Industrial Zone Management Board to implement a project specialized in manufacturing high-tech products and semiconductor equipment in this province.
Meanwhile, Apparel Far Eastern is looking to increase 610 million USD, while Meiko Electronics is about to increase an additional capital of 200 million USD in Vietnam. Once the procedure is completed, the list of large-scale FDI projects registered to invest in Vietnam this year will be extended.
The trend of shifting investment into Vietnam in anticipation of the opportunity by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), as well as to avoid the effects of US – China trade tension, which is becoming clearer.
After Compal, LG Group recently announced that it will stop producing smartphones in Korea to move to Vietnam, in order to cut costs, improve investment and business efficiency. LG’s factory in Pyeongtaek, south of Seoul, will officially stop operating later this year, to switch production to LG’s factories in Hai Phong.
In addition to LG, CP Foods – belonging to Charoen Pokphand Foods, Thailand’s leading group of billionaire Dhanin Chearavanont, will invest more than 200 million USD to build a pork and poultry export center in Vietnam to take advantage of free trade agreements that Vietnam has signed.
CP has invested in Vietnam about 1 billion USD since 1993 and is constantly expanding investment and business to dominate market share. According to CEO of CP Vietnam, Vietnam has an advantage over Thailand in export and labor costs.
That is also the reason why more and more foreign investors shift investment plans to Vietnam. After the US – China trade tension escalated and after the CPTPP took effect, this trend became stronger.
Even, not only secondary investment projects, but according to a recent study published by CBRE, the trend of companies shifting production from China to Southeast Asia, including Vietnam, will also positively impact Vietnam’s industrial real estate sector.
According to CBRE, this trend has been going on since 2018 and will continue to increase until 2020. Thus, at least within the next 2 years, foreign investment in Vietnam will continue to accelerate.
It is important to continue to improve the investment and business environment, create favorable conditions for foreign investors to be able to welcome opportunities and speed up attracting foreign investment, especially in the areas of production of Chinese goods subject to US sanctions.