The southern provinces of Vietnam will receive many billion-dollar FDI projects

Foreign direct investment, especially in southern provinces, is expected to increase sharply with a number of billion-dollar projects in the pipeline.-VNA/VNS Photo

The Binh Duong Province Department of Planning and Investment said a textile and garment project by Hong Kong’s Wai Chi Kai Knitting Company would soon be licensed and could be the first billion-dollar project of 2019.

The company will invest US$1 billion to build a factory to produce knitted collar products, wrist bands, ribbed fabric, fabric, and textile and fashion accessories in the Dong An II Industrial Zone in Thu Dau Mot City.

The Bac Lieu Province People’s Committee is urging the Ministry of Industry and Trade to speed up licensing of a $4.3 billion liquefied natural gas (LNG)-fuelled power project by US company Energy Capital.

Though investment procedures for a power plant are not simple, Bac Lieu hopes the 3,200 MW project will soon get an investment certificate.

In addition, three major projects are finalising procedures for getting a licence this year. They include a $500 million project by South Korea’s Hana Micron, which in April signed a deal with the Bac Giang Industrial Zones Management Authority to build a semiconductor production plant.

Apparel Far Eastern is seeking to invest an additional $610 million in its existing plant while Meiko Electronics plans to add $200 million. CP Foods of Thai billionaire Dhanin Chearavanont is planning to invest $200 million in a pork and poultry farm.

In the first half of the year, Hong Kong remained Viet Nam’s leading source of FDI with $5.3 billion, or 29 per cent of total investment, thanks to Beerco Limited investing $3.85 billion for a stake in Viet Nam Beverage Co Ltd.

South Korea was second with $2.73 billion, followed by mainland China with $2.29 billion, Singapore with $2.2 billion, and Japan with $1.95 billion.

Overall, foreign investors have brought or registered to bring in $18.47 billion in the first six months of the year.

Hanoi remained the most attractive destination with more than $4.87 billion in the period, or 26.4 per cent of all FDI.

HCM City was next with $3.21 billion, a 20 per cent increase year-on-year. Of this $539 million went into new projects, a 3.6 per cent increase. Forty-one per cent went into the property sector, nearly 22 per cent into the technology sector, 19.5 per cent into wholesale and retail and repair of automobiles, motorbikes and other vehicles and 5.8 per cent into manufacturing.

The southern provinces of Binh Duong and Dong Nai were third and fourth with $1.37 billion and $1.2 million.

FDI from Japan

According to the Ministry of Industry and Trade, Japan has so far invested $57.9 billion in Viet Nam in 4,190 projects, the second highest of any country or territory.

Recently, during Prime Minister Nguyen Xuan Phuc’s visit to Japan, there were 32 memorandums of understanding between Vietnamese and Japanese firms involving investment of $8 billion.

A recent survey by the Japan External Trade Organisation (JETRO) found Viet Nam second in the list of countries where Japanese enterprises want to expand in future.

But according to JETRO, the country’s weakness is that its supporting industries are not capable of supplying FDI enterprises, and local firms need to collaborate with their foreign counterparts to increase the rate of local content.