FDI motivation in Southeast region of Vietnam

SGGP
The Southeast is the key economic region in the South, attracting the most foreign investment (FDI) in the country. Along with efforts to improve the investment environment, Southeastern provinces have been expanding and adding more industrial zones to the planning to attract huge FDI projects and wait for the new investment wave shifting from other Asian countries to Vietnam.

The chicken processing factory for export of Thai CP Group invested in Becamex Binh Phuoc Industrial Park inaugurates in December, 2020. (Photo: SGGP)

The chicken processing factory for export of Thai CP Group invested in Becamex Binh Phuoc Industrial Park inaugurates in December, 2020. (Photo: SGGP)

Growth boost

In the 2016-2020 period, Binh Duong Province had attracted nearly 4,000 FDI projects, with a total capital of over US$35 billion from 65 countries and territories, accounting for 9.2 percent of the total FDI capital of the country. The average scale of each project was about 9.1 million. The province currently ranks fourth in FDI attraction, after Bac Lieu Province, Ho Chi Minh City, and Hanoi. About 86 percent of investment capital in the industrial processing and manufacturing, mechanical engineering, electricity, and electronics sectors. Of which, dozens of projects with a scale of $250-$760 million come from countries and territories, namely Japan, Taiwan (China), Singapore, and South Korea. Although the province set the target to attract $7 billion of FDI capital for the 2015-2020 period, it already achieved it by the end of 2019, with the total result of more than $10.2 billion, exceeding 50 percent of the plan. FDI attraction of the province hit about $11 billion in 2020.

Some projects with large registered investment capital in the province include Nitto Denko Company Limited project in Vietnam - Singapore Industrial Park (VSIP II) with registered capital of $186.2 million, Sharp Manufacturing Co., Ltd project in VSIP II-A  with $135 million, two projects of BW Thoi Hoa Industrial Development Company Limited in Thoi Hoa Industrial Park with a total registered capital of $105.8 million, and South Korea’s Kolon Industries Company project in Bau Bang Industrial Park with a total investment of above $600 million by 2026.

Thanks to this capital flow, Binh Duong Province has effectively exploited 48 industrial parks and industrial clusters, with a total area of more than 10,000 hectares, accounting for a quarter of the total area of industrial parks in the South. It is planning and expanding 34 industrial parks with a total area of 14,790 hectares.

In Dong Nai Province, there are 1,550 valid FDI projects, contributing nearly 47 percent of gross regional domestic product (GRDP). In the 2016-2020 period, the province had attracted roughly $9 billion of FDI capital.

In 2021, the province makes a plan to attract about $700 million of FDI capital. There are three giant projects, including Hansol Electronics Vietnam Ho Nai phase 2, the factory of Platel Vina Co., Ltd. in Bien Hoa City, and the factory of Ojitex Vietnam Co., Ltd. in Long Thanh District with a total investment of $190 million.

Prioritizing the development of supporting industries

According to the latest statistics from the Department of Planning and Investment of Binh Duong Province, the whole province attracted $106 million of FDI capital in the first month of this year. Of which, nine projects were granted new investment certificates, with total registered capital of $60.6 million, and two projects increased capital, capital contribution, and purchase of shares, with total registered capital edging up by $46.1 million.

Aiming at sustainable development with high added-value, Binh Duong Province advocates the promotion of the development of supporting industries with the establishment of an industrial park in Bau Bang District, with a scale of over 1,000 hectares, prioritizing to attract investment capital in supporting industries, especially foreign-invested projects.

There have been many investment projects in this industrial park, such as the project of car tire and airbag manufacturing factory, with an investment of up to $1 billion, covering an area of 42 hectares of South Korea’s KOLON Group and Far Eastern Polytex Vietnam Company.

Besides, in the VSIP II-A, Singapore’s Tetra Park Binh Duong JSC has invested in building a factory project specializing in producing sterile packaging from paper, plastic, and aluminum with registered capital of $124 million.

The Government has planned 38 industrial zones and expanded some key industrial zones in Dong Nai Province’s Dinh Quan District, Dau Giay Town, Amata Industrial Park, and Ho Nai Ward in Bien Hoa City. The traffic infrastructure is being invested and upgraded to attracting FDI.

Noticeably, industrial zones in Dong Nai have 372 projects of Korean enterprises with total capital of $6.1 billion, and 253 projects of Japanese enterprises, with total capital of nearly $4.8 billion, mainly in supporting industries. The value of supporting industries of the province by the end of last year exceeded VND130 trillion, accounting for 23 percent of industrial production. It is expected that by 2025, Dong Nai will attract more than $10 billion of FDI capital.

According to Mr. Mai Ba Truoc, Director of the Department of Planning and Investment of Binh Duong Province, in recent years, FDI has contributed significantly to the provincial economic development, helping to increase the annual export turnover, making a great contribution to the State budget.

Noticeably, the scale of the project has nearly doubled compared to the 2010-2015 period. FDI capital attracted in the past five years has contributed to making Binh Duong a major center of production and export, with the average industrial and export value surpassing 10 percent of total industrial output and export value of the country.

The good news for the cashew industry of Binh Phuoc Province is that Mekong Corporation Europe BV (MCE) and An Viet Phat Energy One Member Company Limited (AVP) have decided to invest $250 million to build an experimental, research, and development area and a cashew processing plant on an area of 200 hectares. This year, the province has set out a plan to attract $700 million of FDI capital and continue to complete the investment incentive policies, striving to draw $1 billion of FDI capital per year. The provincial People's Committee has petitioned the Prime Minister to approve the additional planning of industrial zones of about 2,500 hectares in two industrial zones Minh Hung – Sikico Industrial Park with an area of 1,000 hectares and North and South Dong Phu Industrial Park with an area of 1,500 hectares; add a plan to establish new industrial parks with a total area of 5,500 hectares in the 2021-2030 period, including Dong Phu Industrial Park and Dong Phu Residential Area (3,500 hectares), and Dong Phu Becamex Industrial Park (2,000 hectares).

By Hoang Bac, Xuan Trung – Translated by Thuy Doan

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