Neighbouring groups make up for lost time

On May 4, Goertek Corporation organised the groundbreaking ceremony for a 62-hectare factory at Nam Son-Hap Linh Industrial Park in the northern province of Bac Ninh.

Goertek - one of Apple's largest partners signed a MoU to lease 62.7ha in Nam Son - Hap Linh Industrial Park of Kinh Bac (KBC), source: cafef.vn

With investment of $300 million, the factory will specialise in producing consumer electronic products, communication equipment, and optical equipment and instruments. The factory is expected to go into operation in April 2024.

It is the third Goertek factory in 10 years of investing in Vietnam. To date, the group has poured over $600 million into the country and become one of three major suppliers for Apple in Vietnam.

Jiang Long, chairman of the Board of Directors of Goertek Corporation, said he appreciated the investment environment of the province as well as the support policies and coordination of the local government, which has strengthened confidence. This was the basis for Goertek Corporation to build its third factory in Nam Son-Hap Linh IP.

“The group committed to developing Goertek Vina to become the corporation’s technology centre, localise the labour resources, and increase the Vietnamese labour rate to undertake great responsibilities, complete the goals set by the corporation, and contribute to the overall development of the business as well as Bac Ninh,” he said.

On the same day, Foxconn started construction of a 50-ha factory in Quang Chau IP. Foxconn Group plans to invest more than $300 million in this new project and employ over 30,000 local workers.

In Quang Chau, Foxconn is the largest foreign-invested group, with projects first established in 2019. Currently, the group’s total leased land area is up to 70ha and the total registered capital is $773 million. Its member companies, Fuhong, Fuyu, and Fukang, have also poured million-dollar investments into Quang Chau IP.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, in the first four months of this year, China was the third-largest foreign investor in the country with a total registered capital of $751.64 million, followed by the territories of Taiwan with $594.48 million and Hong Kong with $585.54 million, signifying an increase of 70, 136.5, and 98.3 per cent on-year. In 2022, China contributed $2.51 billion to the total foreign investment capital inflow to Vietnam, ranking it fourth, followed by Hong Kong with $2.22 billion and Taiwan with $1.35 billion.

Vietnam has enjoyed increasing investment from China since its neighbour abruptly ditched its strict pandemic strategy. “Enquiries from Chinese firms about manufacturing investment in Vietnam grew exponentially from the last quarter of 2022,” said Michael Chan, senior leasing director at BW Industrial Development.

Within the first four months of 2023, China invested in 117 new projects in Vietnam, the highest number from a single country.

Chan forecast that in 2023, the average investment in projects will be $5.5 million. Meanwhile, in the long term, the average capital could reach $6.5 million. With big-name players already in Vietnam, attracted by its free trade agreements and proximity to China, the companies comprising the current wave of investors are mostly smaller suppliers to those larger firms.

Wang Chuanfu, chairman of Chinese manufacturing conglomerate BYD, said that after operating an electronic manufacturing factory in the northern province of Phu Tho, it would expand investment into electric car production and assembly with the best technology to supply the Vietnamese market and export to Southeast Asia.

“To realise the target, the group hopes the government and authorities will create better conditions to complete procedures. BYD will establish a chain of supporting industrial enterprises for e-vehicles,” said Chuanfu at a meeting with Deputy Prime Minister Pham Hong Ha on May 5.

This month, BYD Electronics will start construction of its expanded plant in Phu Tho. Located in Phu Ha IP, the plant will cost $183.7 million, including lines for manufacturing electronic components as well as graphics boards. There will also be a $5.5 million line manufacturing batteries for tablets and mobile phones.

Dao The Anh, CEO, RedsunLand The capital inflow from China, Taiwan, and Hong Kong flourished in the first four months of this year. At RedsunLand, the number of company delegations arriving in Vietnam to look for investment opportunities tripled compared to the figure in the fourth quarter of 2022, with a total expected capital of $100 million. We see that firms from China, Taiwan, and Hong Kong are paying attention to several sectors, including the manufacture of hand tools, mechanical machinery, electronic components, and high-tech applications. They expect that Vietnam will continue to improve its infrastructure system and skilled labour force. They state that the synchronised infrastructure of industrial parks is considered a magnet to draw in secondary enterprises to do business in Vietnam. The synchronised infrastructure combines modern road systems, electricity supply systems, clean water, and wastewater treatment system, and these works must be maintained and repaired regularly. Abundant labour resources and certain qualifications also greatly influence their investment decisions.

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