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FDI in supporting industry bolsters domestic production

Support industries attract FDI

Vietnam’s supporting industries attracted a substantial portion of the foreign direct investment (FDI) pouring into industrial parks (IPs) of southern provinces and cities. According to Nguyen Thi Hoang, Vice Chair of the Dong Nai Provincial People's Committee, as of the end of November 2021, the local IPs had attracted US$1.1 billion, equal to 156.5 percent of the annual plan, with over 80 percent of capital and investment projects in supporting industry and other manufacturing enterprises.

This was an impressive result given the serious impacts on the locality of the fourth Covid-19 outbreak. A representative of KSM ENG Vina said a US$10 million project for manufacturing metal components used in high-tech industries will be built in Giang Dien IP (Trang Bom District, Dong Nai Province) and is expected to go into operation within a year.



FDI capital invested in support industries has increased rapidly


Lee Sam, Director of Men Chuen Vietnam Co., Ltd., said despite the difficulties caused by the pandemic, the company decided to build another factory at a cost of about US$30 million in Nhon Trach 6 IP, which will produce all kinds of yarn and fabric to meet the high demand for these products by domestic textile enterprises over the past five years.

Binh Duong Province also attracted more than US$1.92 billion in the first 11 months of 2021. According to Nguyen Thanh Toan, Director of the Binh Duong Department of Industry and Trade, local industrial enterprises have prepared production material sources to serve investment projects in supporting industries. Binh Duong Province has identified the development of these industries as a key orientation and will focus on developing processing, manufacturing and supporting industries, with priorities given to attracting high-tech industries and information technology, creating high added value and increasing export capacity.

More practical policies needed

FDI investors expect that Vietnam will control the Covid-19 in the next five to eight months and resume trade with other countries. FDI enterprises will then focus on quickly implementing new investment projects and increasing capital to expand production.

However, according to enterprises, although Vietnam has adopted many incentive policies to encourage investment in support industries in recent years, the number of enterprises actually accessing the support remained modest because many policies are not relevant to the real needs of enterprises, and entail cumbersome and difficult procedures. Support policies need to be more practical and specific on interest rates, capital sources, taxes, and land, with more flexible and transparent procedures.


According to the Ho Chi Minh City Union of Business Association, in order to form more factories supplying

domestic supporting industry products and join the global supply chain, enterprises need land rent subsidies

in IPs and industrial clusters to develop high-tech applications in addition to support policies on land.


Ngoc Thao


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