FDI gushes into Vietnam’s Red River Delta as manufacturing opens the floodgates

Manufacturing and processing industries have triggered a surge in foreign direct investment (FDI) flows into the Red River Delta region since the start of this year.

The region covers 11 cities and provinces in northern Vietnam: Hanoi, Hai Phong, Quang Ninh, Hai Duong, Hung Yen, Vinh Phuc, Bac Ninh, Ha Nam, Nam Dinh, Ninh Binh, and Thai Binh.

Quang Ninh province topped the region’s localities in the first half of this year, securing FDI commitments of $1.55 billion, more than double the figure a year earlier, according to government data.

Key contributors to this result were two investments by Taiwan-based Foxconn, a major Apple supplier, worth a combined $551 million.

The investments, licensed by the local government earlier this month, took Foxconn’s investment tally in the province, which borders China, to $1 billion.

Second behind Quang Ninh was the port city of Hai Phong, which welcomed FDI projects worth $1.14 billion in H1/2024, up 25.8% year-on-year. This surge was partly driven by the city’s investment promotion efforts with major partners like South Korea and China.

Early this month, Hung Yen province, adjacent to Hanoi, handed over investment certificates worth a total of $760 million to 20 FDI firms.

This province has so far attracted $7.5 billion into nearly 600 FDI projects, headed by Japan with $3.8 billion, China with $1.1 billion, and South Korea with $900 million.

The fresh investments have mainly flowed into the manufacturing and processing industries, in line with the localities’ master plans and orientations.

In Quang Ninh, investors have tended to form supply chains or produce similar products in certain industrial parks (IPs). While the province’s Viet Hung IP hosts a Skoda-branded auto assembly and production plant invested by Thanh Cong Viet Hung Co. with a maximum capacity of 300,000 vehicles per year; the Dong Mai IP is home to several electrical and electronic equipment and components manufacturing projects.

According to the Hai Phong Economic Zones Authority, the high-tech, processing and logistics industries have accounted for 93% of FDI in the city’s IPs and economic zones.

At an investment promotion event in South Korea last April, the Hai Phong administration granted licenses to eight projects totaling nearly $400 million, a majority of them in the electronics field.

Similarly, manufacturing and processing firms have found Hung Yen more attractive this year with FDI pledges made for a $114 million project by Hung Yen Alpha Logistics Park Singapore Co; a $67 million Radio Frequency Identification (RFID) project by Taiwan-based RFID manufacturer Arizon; and an $87.7 million project by Japan-invested Acecook Vietnam.