Vietnam’s northern city of Hai Phong attracted over $3 billion of foreign direct investment (FDI) in the first nine months of 2023, becoming one of the top FDI locations in the country.
Speaking to The Investor, Le Trung Kien, head of the Hai Phong Economic Zone Authority (HEZA), attributed the city’s achievements to its improved logistics infrastructure, land availability, and investment environment, in addition to the city’s strategic location.
Logistics infrastructure
Logistics development in Hai Phong has been a priority for the government and local authorities. Investments in international seaports, expressways and an airport have led to breakthroughs in the city’s transport infrastructure. For example, three new bridges on the Dinh Vu-Nguyen Binh Khiem-Nguyen Van Linh route have solved congestion for containers trucks on the route connecting Hai Phong’s seaports to the country’s expressways.
Investments in roads such as the Hanoi-Hai Phong Expressway, Hai Phong-Ha Long Expressway linking Hai Phong and the northern province of Quang Ninh, and roads to the neighboring provinces of Thai Binh and Hai Duong have also made a difference. Besides, the coastal city is pushing ahead with ring road projects to ensure the smooth transport of goods in and out of its seaports.
Regarding aviation, Cat Bi International Airport has been upgraded to welcome four million passengers a year, while a project to build a second terminal is set to start soon. On the maritime front, Hai Phong has already opened wharves No. 1 and 2 and is building wharves No. 3, 4, 5, 6 for the Lach Huyen deep-water seaport in a bid to become the transportation hub for Vietnam’s northern region.
Transportation infrastructure inevitably boosts socioeconomic growth, and Hai Phong is focusing on developing seaports and building logistics networks and industrial parks to accommodate the ports, Kien said. This has resulted in major global firms investing in the city, he added.
Land availability
Hai Phong’s first industrial park, now known as Japan-Hai Phong Industrial Park, was invested in 1994. Since then, the city has developed 14 industrial parks over 6,100 hectares and the Dinh Vu-Cat Hai Economic Zone covering 22,540 hectares. The occupation ratio at these industrial parks has only reached 63.8%, so land is always available for investors, Kien affirmed.
As of the end of August, industrial parks and economic zone in Hai Phong had attracted investments of $36.32 billion, including $22.39 billion from 473 FDI projects and $13.93 billion in domestic investments, according to the HEZA. Notable ones are $9.24 billion invested by South Korean tech giant LG, $7.6 billion by domestic automaker VinFast, $1.22 billion by tiremaker Bridgestone, and $900 million by tech giant Pegatron.
Thanks to these major projects, Hai Phong has attracted smaller ones to join the ecosystems of these mega investors, the HEZA highlighted.
Investment promotion
While investment incentives are offered in line with the country’s legal framework, Hai Phong’s strengths are its heavily-invested infrastructure, smooth investment environment, and strong workforce with investments in vocational training and affordable housing for workers, Kien noted.
Hai Phong is also offering investment promotions, such as on-site promotions in cooperation with industrial park leadership and foreign events. For example, in June, Le Tien Chau, chief of Hai Phong's Party Committee, joined Hai Phong’s investment promotions in South Korea and Japan. At the events, Chau affirmed the city would prioritize investments in high-tech and smart industries, the maritime economy, clean energy, semi-conductors, and others.
Thanks to the city’s efforts, LG Innotek, the electronic component arm under LG, made a commitment to invest an additional $1 billion in the city, doubling its investment in the northern coastal city to $2.05 billion.
Then in September, Hai Phong granted investment certificates to 11 foreign and domestic direct investment projects with total registered capital of $961 million. The biggest one is a $500-million project invested by South Korea’s SK Group. The high-tech biodegradable material factory, called Ecovance, will cover 3.2 hectares in Deep C Hai Phong Industrial Park, within Dinh Vu-Cat Hai Economic Zone.