Ho Chi Minh City expects new FDI wave

In mid-January 2016, Ho Chi Minh City Export Processing and Industrial Zones (Hepza) granted investment certificates to two FDI projects, with the total registered investment capital of more than $30 million. The first is the $4.4 million (packaging and production project) packing production project in Tan Phu Trung Industrial Park by Nippon Paper VHM Joint Stock Company. The company produces paper trays, glasses, and cups for export.

The second is the $25.6 million sauce and spice production project, a joint venture between Saigon Union of Trading Co-operatives (Saigon Co.op) and Singaporean Wilmar International Limited. At the signing ceremony two months ago, Saigon Co.op’s representative said that it was strong in manufacturing the “Black Cat” brand of sauces and spices. The company’s products are present in the US, Canada, and European markets. Besides, the representative of Wilmar expected that the new factory will enhance the two parties’ competitive capacities and simultaneously promote the development of the sauce and spice production industry.

Previously, the management board of Saigon Hi-Tech Park (SHTP) licensed Malaysia-based United More Sdn Bhd to implement its $21 million Aureumaex Precious Plastic Vietnam project. The 13-hectare factory will produce plastic parts for Samsung LCD and LED TV panels. The factory will push out approximately 12 million products a year following its expected start of operation in June 2016.

“Hepza has plans to attract $700 million FDI in 2016, prioritising hi-tech and supporting industry projects, as well as four key industries, namely mechanical engineering, electronics, chemistry, and rubber, plastics and food processing,” said Hepza’s representative.

The representative added that numerous existing enterprises operating in the garment and textile and the supporting industry, as well as the electronics sector have plans to expand operations to take advantage of opportunities presented by Vietnam’s joining a multitude of free trade agreements. Although FDI is still low in Hepza, it is expected to surge in 2016, due to foreign investors’ increasing interest in Ho Chi Minh City in general and in Hepza in particular.

According to Le Hoai Quoc, head of SHTP, the park targets to attract $250 million as FDI in 2016. Licensed projects must meet the authority’s conditions/criteria on the use of high-technology, while investors must commit to implementing Reseach and Development programmes, supporting the domestic supply chains. Thus, in 2016, there will not be highlighted FDI deals, as in 2015. However, the attraction of joining the global manufacturing chain, once Samsung implements its project in Sai Gon Silicon City, will create light waves of FDI.