Global groups optimistic over Vietnam’s credentials

November 10, 2021 | 10:00
With its great efforts to improve the domestic business and investment climate and change its mindset in fighting against the pandemic, Vietnam is continuing to fall under the radar of foreign financiers that consider the nation a lucrative investment spot in the long term.
Foreign and domestic enterprises in sectors like agriculture are developing new ventures in Vietnam, Photo: Le Toan
Foreign and domestic enterprises in sectors like agriculture are developing new ventures in Vietnam, Photo: Le Toan

Deputy Minister of Foreign Affairs Nguyen Minh Vu told VIR that there may be a new wave of foreign direct investment (FDI) into Vietnam forthcoming, especially after a strategic dialogue between Vietnam and the World Economic Forum (WEF) held on October 29.

“Leaders of nearly 70 global groups are showing their strong confidence in the Vietnamese market. I do believe that such confidence will lead to many decisions on new investment and investment expansion in Vietnam in many sectors,” Vu said.

“They said that the Vietnamese government has been making non-stop efforts in economic reforms and improving the country’s investment climate where there are win-win public-private partnerships between investors, the government, and Vietnamese people,” he continued.

According to the Ministry of Foreign Affairs, one of the magnets of FDI into Vietnam is the government’s change in its mindset for battling the ongoing pandemic, reflected via its Resolution No.128/NQ-CP dated October 11. Under this resolution, the pandemic risk is classified into four levels, from low risk to very high risk.

“This resolution means the government is on the right track in macro monitoring, and Vietnam is shifting to a period of boosting economic recovery with the expansion of business and production while the pandemic has almost been controlled. This will help foreign investors to soon resume their performance,” Vu said.

In a specific case, Nguyen Duc Tiep, Vice Chairman of Uong Bi city of the northeastern province of Quang Ninh, said that thanks in part to Resolution 128, the province is being eyed by many foreign investors.

“Resolution 128 has made it more favourable for Quang Ninh to attract FDI. Many foreign-invested projects have been resuming operations,” Tiep said. In October, Thailand’s Amata Group in cooperation with Japan’s Marubeni and South Korea’s GS worked with the province’s government and proposed the implementation of two projects to build industrial zones (IZs) covering 1,400 hectares in the province. Currently, Amata is implementing three projects involving IZ business with total registered capital of $176 million.

According to the Ministry of Planning and Investment, after a few months of reduction in registered FDI, this type of capital has bounced back since September. During January-October, the total newly registered, adjusted, and paid-in capital for share purchase by foreign investors hit $23.74 billion, up 1.1 per cent on-year. Of this figure, newly-registered capital reached over $13 billion, up 11.6 per cent on-year, while newly-added capital touched $7.09 billion, up 24.2 per cent on-year.

During January-September 20, the total newly registered, adjusted, and paid-in capital for share purchase by foreign investors was $22.15 billion, up 4.4 per cent on-year. In the January-August 20 period, the figure decreased over 2 per cent year-on-year, while the accumulated seven-month FDI reduced 11 per cent over the same period last year.

In a specific case, US-backed Cargill Vietnam is preparing to develop another venture. “Vietnam is an important market for Cargill globally and the company continues to invest to this day, and this is further demonstrated with the commitment of a new, $28 million speciality nutrition plant in the southern province of Dong Nai, to be commissioned in late 2022,” Luan Nguyen, country president of Cargill Vietnam, told VIR.

Cargill today runs 11 animal nutrition plants, a grain and oilseed warehouse, and two aqua technical application centres to serve local customers and farmers. The project in Dong Nai will raise Cargill’s total investment in Vietnam to $160 million.

Meanwhile Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi told VIR, “American investors are optimistic about business prospects in Vietnam and we support efforts to create a modern economy that will attract future investment and high-paying jobs for Vietnamese people. We will continue to work on lowering barriers to trade to help the Vietnamese government make it easier to do business, and to create a high-standard, transparent, and stable business environment to ensure that all investors have fair access to that opportunity.”

Vietnam’s State President Nguyen Xuan Phuc recently hosted separate receptions for leaders of major US companies that want to increase funding in Vietnam, including GE Group, CFM International, AviaWorld LCC, Cantor Fitzgerald, DeLong, Valero, and UPC Group.

At the Vietnam-WEF Country Strategy Dialogue 2021, Prime Minister Pham Minh Chinh stated, “Vietnam continues to assert itself as an attractive destination that offers numerous opportunities for businesses and investors.”

Vietnam’s economy has increased 1.4 times in scale within five years, becoming the fourth-largest economy in ASEAN, and ranking 37th worldwide. In infrastructure alone, Vietnam has a great demand for investment between now and 2030, totalling up to $30 billion per annum.”

By Khoi Nguyen

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