While capital flows into the manufacturing sector were modest so far in the year, foreign investors were proactive in capital contribution and stake purchase activities in the southern growth engine, Ho Chi Minh City.
|Real estate was one of the sectors leading in FDI attraction so far this year |
Saigon High-Tech Park (SHTP) has just granted an investment certificate to South Korean firm Misan Electronics Limited for its $1.1 million investment project that will lease ready-built workshop space.
Only four FDI projects were licensed to invest in the park so far this year, and the Ho Chi Minh City Export Processing and Industrial Zone Authority has licensed 14 FDI projects only during the period.
The modest number of projects has partly explained why FDI attraction in Ho Chi Minh City’s manufacturing sector was downbeat.
The latest report by the Ho Chi Minh City Department of Planning and Investment showed that in the first eight months of this year, the city granted new investment certificates to 640 projects valued a total of $558.6 million, equal to 70 per cent of the investment value received one year earlier.
The report also showed that processing and manufacturing was one of the sectors eyeing the sharpest on-year decline in investment value, bringing in only about $252 million during the period, down 64.8 per cent
In addition, 178 FDI projects asked to expand capital with about $480 million, which is equal to 80 per cent of last year’s performance.
The report also showed that processing and manufacturing was one of the sectors eyeing the sharpest on-year decline in investment value, bringing in only about $252 million during the period, down 64.8 per cent.
In reality, the southern development hub was among the localities taking the lead in FDI attraction in the first eight months of this year. However, the main driver came from foreign investors engaging in capital contributions and stake purchases in local businesses.
Accordingly, 1,912 such instances were reported during the period with a total capital value touching $4.14 billion, up 34.5 per cent in volume and growing 2.4-fold in value compared to one year ago.
Ho Chi Minh City lured in a total of $5.18 billion in FDI capital in these first eight months, in which capital contribution and stake purchase instances accounted for the lion’s share with 80 per cent.
However, there are signals showing that several large-scale FDI projects will be targeting the city’s manufacturing sector in the rest of the year.
Head of SHTP Le Hoai Quoc recently told VIR that they might license a $500 million project by an US investor in the forthcoming time.
The project will produce specific battery types to feed Tesla’s electric cars.
Meanwhile, Nguyen Truong Bao Khanh, general director of Hiep Phuoc Industrial Park JSC, said that several production businesses from South Korea and Japan have expressed intentions to land projects at Hiep Phuoc IP with investment value surpassing $100 million.