No interruption in FDI inflows to Haiphong city despite COVID-19

September 09, 2021 | 11:55
Despite the complicated epidemic situation across Vietnam, thanks to the initiative of both local government and businesses to promote investment, foreign direct investment (FDI) inflows to Haiphong city have not been interrupted.
No interruption in FDI inflows to Haiphong city despite COVID-19
Commencement of the ready-built factory project of BW Industrial in Nam Dinh Vu Industrial Park

According to Haiphong Economic Zones Management Authority (HEZA), the total FDI capital attracted to industrial parks (IPs) and economic zones (EZs) under its management reached nearly $1.4 billion year to date by the end of July (achieving 55.9 per cent of the annual plan), along with $3.5 trillion of domestic direct investment.

So far, Haiphong has recorded 418 foreign-invested projects with the total capital of $17.37 billion. Investment promotion has been actively and flexibly implemented in the context of the COVID-19 epidemic.

In the first six months of the year, HEZA worked with over 60 investors, face-to-face and online. IP developers are also actively adopting alternative channels to discuss with partners as local epidemic prevention measures are being tightened.

For example, since 2020, VR technology has been applied by Sao Do Group to recreate its Nam Dinh Vu IP and utilities in 3D space, helping investors to visit from afar.

Nguyen Thanh Phuong, general director of Sao Do Group said: "Our overseas investment promotion activities were stopped and we can only work online. Surveying investment locations using technology along with the group's initiative to provide online consultancy have helped us conclude new contracts without physically meeting with clients.”

As a result, since the beginning of the year, Nam Dinh Vu IP has attracted 10 new investment projects with a total capital sum of $315 million, contributing a significant part to the total capital flowing into Haiphong. These projects include two projects from SLP Park Haiphong for leasing factory, warehouse, and logistics services with the total investment capital of $30 million; BW Industrial (ready-built factory); and an An Phat Holdings project to build a bioplastics factory valued more than $2.2 trillion.

Earlier this year, LG Group also invested $750 million in Haiphong and by the end of August had poured another $1.4 billion into the city.

“LG Group wants to further expand its scale when Trang Due IP deploys the construction of Phase III,” shared Dang Thanh Tam, chairman of the Board of Directors of Kinh Bac City Development Holding Corporation (KBC).

No interruption in FDI inflows to Haiphong city despite COVID-19
Commencement of SLP PARK Haiphong project in Nam Dinh Vu Industrial Park

New element for capital flow attraction

While the COVID-19 pandemic remains uncontrolled, many experts warn that keeping the area safe and stable without an outbreak is a necessary factor but not sufficient in itself to attract investment.

According to Sao Do Group, when working with investors, they now often ask about vaccination and what timeline they can expect the city to achieve herd immunity. "This will be one of the new criteria, along with infrastructure, policy, and political stability, among others, for investors to make an investment decision," Phuong commented.

Currently, Haiphong is determined to effectively implement the goal of fighting the pandemic while ensuring absolute safety for IPs and EZs as well as supporting sustainable production and business. At the same time, Haiphong has also allocated a large portion of its budget for vaccination and is actively seeking vaccine sources to soon achieve herd immunity. So far, the city has completed the first phase of vaccination for nearly 1,700 experts and senior personnel working in IPs and EZs.

Moreover, according to Phuong, in the 2021-2025 period, the city targets to attract $12.5-15 billion of FDI, which is quite challenging. He said Haiphong has issued new policies as well as good planning to grow logistics infrastructure and maximise its seaport advantages. In fact, this is one of the key advantages the city offers for investors.

He also highlighted the need to attract high-quality labour. He urged Haiphong to reserve land funds for investors specialising in developing affordable housing and apartments for workers in IPs. This was also emphasised by Secretary of Haiphong Party Committee Tran Luu Quang at a recent meeting with HEZA.

Solving these problems will drive Haiphong to attract FDI in projects using high, advanced, and environmentally friendly technologies. The products created should have high added value and appear in the global product chains of large economic groups and multinational companies.

By Thu Le

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