Although the country’s registered foreign direct investment capital went down by 15.6 per cent on-year due to the pandemic, financial injections still managed to find their way to high-tech projects in the first two months of the year, showcasing the attraction of some of Vietnam’s industries and localities.
|Foreign direct investment activity so far this year has been showing positive signs for the rest of 2021. Photo: Le Toan |
Despite lockdowns in some provinces due to renewed COVID-19 outbreaks in the early months of the new year, foreign direct investment (FDI) attraction has seen several positive deals reported, especially in high-tech projects.
The largest was the LG Display Haiphong project with a capital increase of $750 million at Trang Due Industrial Park in Haiphong. The northern port city’s Economic Zones Management Authority issued its first investment registration certificate in 2016 with the total registered capital of $2.5 billion, authorising the company to manufacture OLED, LCD, and TV screens, among other items.
“The capital expansion raises the total investment capital of the South Korean investor to $3.25 billion, making it the biggest foreign project in Haiphong,” said Do Nhat Hoang, director general of the Ministry of Planning and Investment’s Foreign Investment Agency (FIA).
LG’s project has been providing jobs for about 5,000 workers, meeting the housing demand of about 10,000 workers and experts, and contributing about $5 million to the state budget annually.
Not far from Haiphong, Bac Giang province was also a highlight in the early months of the year. The most outstanding project is the Fukang Technology plant of the world’s biggest electronics manufacturer Foxconn, which is set to produce and assemble eight million tablets and laptops annually with total registered capital of $270 million.
Meanwhile, JA Solar PV Vietnam will manufacture photovoltaic cells with a capacity of 3.5GW annually, and total registered capital of $210 million. In addition, Singapore’s Kodi New Material Vietnam was also licensed to produce tablets and laptops in a $270 million project.
However, southern localities like Can Tho, Binh Duong, Tay Ninh, and Ho Chi Minh City also showcased their strengths by mobilising over $2.6 billion in total, such as the $475-million capital increase of Intel Vietnam, the $100-million project of Hansol Electronics Vietnam, and the $30-million scheme of Platel Vina to manufacture electronic components and smartphones for South Korea’s leading electronics groups.
According to the FIA, the first two months of the year also witnessed a number of other sizable foreign-invested projects licensed, such as Japan’s O Mon 2 thermal power plant registered at $1.31 billion in the Mekong Delta city of Can Tho, and China’s Radian tyre manufacturing project increasing capital by an additional $312 million in the southwestern province of Tay Ninh.
“Many foreign-invested enterprises continue to recover and are maintaining their production and business activities despite negative impacts of COVID-19,” said an FIA report on Vietnam’s two-month FDI for the year thus far. “Disbursed capital of foreign-invested projects hit $2.5 billion, up 2 per cent on-year in the first two months of 2021.”
Statistics from the FIA showed that as of February 20, the total of newly-registered and added capital, as well as investments into capital contributions and share purchases, amounted to $5.46 billion, equivalent to 84.4 per cent of the same period last year.
“This is not a very bad outcome amid the pandemic during the last year and early 2021,” Hoang said.
The FIA ascribed the reduction to several reasons, saying that in the first two months, the transition between the Law on Investment issued in 2014 and the revised version promulgated last year “has affected the new licensing and adjustment of foreign-invested projects” in Vietnam.
“Moreover, the resurgence of COVID-19 in many nations including Vietnam has also delayed travel and decisions of new and expanded investments,” Hoang added.