Southeastern Vietnam localities seek FDI for 'new' industries

Vietnam’s southeastern localities, which have seen strong foreign direct investment (FDI) inflows since the start of this year, are working hard to attract more, particularly into new industries.

The southeastern region, comprising Ho Chi Minh City and the five provinces of Binh Duong, Dong Nai, Ba Ria-Vung Tau, Tay Ninh and Binh Phuoc, is a key economic growth driver in the country. Together, these localities house the largest industrial parks and clusters nationwide.

Dong Nai, which hosts several big industry names including Hyosung, Bosch, Amata, Fujitsu and C.P., attracted $439 million in FDI in the first two months of 2024, according to the Dong Nai Industrial Zones Authority, meeting 62.7% of the yearly plan.

In the same period, it saw domestic direct investments (DDI) reach VND1.94 trillion ($78.7 million), or 97% of this year’s target.

Notably, none of the new projects it has attracted in warehousing, mechanical engineering and manufacturing of prefabricated metal products are considered labor intensive or environmentally unfriendly.

In 2023, the province attracted 79 FDI projects worth $467.13 million and 14 DDI projects worth more than VND1.9 trillion ($77.6 million).

According to the Dong Nai Industrial Zones Authority, FDI enterprises in the province’s industrial parks invested more than $1.78 billion between January and February, up 9% year-on-year. Up to 80% of goods produced by FDI enterprises in industrial parks were exported to more than 170 countries and territories, with major markets being Europe, the U.S., Japan, China and South Korea.

Meanwhile, Ba Ria-Vung Tau province has plans to attract FDI for 110 new projects. It also aims to develop two new industries – chemicals and manufacturing of equipment serving offshore renewable energy.

Its neighboring Binh Phuoc province is partnering with EuroCham to hold a business-matching forum in manufacturing, trade and high-tech agriculture. A large number of European firms are exploring investment opportunities in this province.

Investment promotions

HCMC, the largest economic engine in the country, has been holding a series of investment promotion events since the start of this year.

At a recent meeting with AmCham, Chairman Phan Van Mai said that the municipal administration will continue to cooperate with the U.S. diplomatic mission and AmCham members to develop HCMC into a healthcare hub in Southeast Asia.

The Saigon High-tech Park earlier signed a cooperation agreement with Siemens EDA, under Siemens AG, to train human resources in the semiconductor chip industry in Vietnam.

The Netherlands’ BE Semiconductor Industries N.V Company (BESI) has completed preparations to put its chip packaging machinery into operation at the Saigon Hi-tech Park.

These moves indicate a shift in FDI capital flows into new industries considered crucial in the future, especially in the context of the city of 10 million residents being short of land funds for industrial park development.

Meanwhile, Ba Ria-Vung Tau province aims to attract $2 billion in FDI this year. To meet this target, the local government has implemented drastic administrative reforms for enabling a smooth investment environment and a good business ecosystem for domestic and foreign businesses, said Le Ngoc Linh, director of the municipal Department of Planning and Investment.

He said the province was striving to upgrade its road network to expand its development space and increase its attractiveness to investors.

The province is also taking measures to develop a system of logistics centers and international transshipment ports at Cai Mep-Thi Vai; deploying a project to develop large-scale industrial-service-urban complexes in Phu My; and building a strategy to strongly develop tourism in the coastal area.

Dong Nai, meanwhile, is calling for more investments into the Long Thanh High-tech Industrial Park. Amata Long Thanh Urban JSC, the project investor, aims to make it the first hi-tech focused facility in the province. The park has drawn interest from many large corporations and other businesses.

Secretary of the Dong Nai Party Committee Nguyen Hong Linh said that after the province's 2021-2030 plan is announced, provincial leaders will organize a conference to pitch potential projects to domestic and foreign businesses.