The US group’s production chain chooses Vietnam, billions of dollars poured in
A series of corporations have increased their presence in Vietnam
After Apple implemented plans to increase orders for suppliers in Vietnam, many other corporations chose Vietnam as a new investment destination or expanded investment. Foxconn, Luxshare – are among the Apple suppliers who are increasing investment activities in Bac Giang. Corporations like Foxconn are expected to spend billions of dollars on manufacturing orders from Apple and Cisco in the United States.
Not stopping there, Pegatron is also a leading supplier of electronic components and products to the world’s technology giants such as Microsoft, Apple, Sony In Vietnam, Pegatron is plan to invest about 1 billion USD to build industrial complex of manufacturing hi-tech products, including:
Pegatron Vietnam project with 1 capital, 19 million USD investment licensed by Hai Phong Economic Zone Authority in March 2020; Pegatron Vietnam 2 project, with an investment of 148 million USD, is implementing investment procedures; Pegatron Vietnam 3 project, with a total investment of 500 million USD, is expected to deploy in the period of 2026-2027.
Apple suppliers in Vietnam are increasing production.
To implement the above investment projects, Pegatron Group is applying at the Hai Phong Economic Zone Authority, proposing to invest in the Pegatron Vietnam 2 project in Nam Dinh Vu Industrial Park to produce civil electronic equipment, computers and computer peripheral equipment, communication equipment, electronic components and circuit boards.
This project, in operation, is expected to create jobs for about 22,500 direct workers and contribute to the budget revenue of about 100 billion VND / year.
Products from Pegatron’s factory in Hai Phong will provide input components for Microsoft, Sony, Lenovo, Apple
In addition, many investors are also studying and comparing the business investment environment in countries in the region. Competition between countries is increasingly fierce. Countries such as India, Indonesia, Thailand, are also “releasing bait” to attract “big men” to invest.
Selecting FDI, not attracting at all costs
It can be seen that Vietnam’s direction to attract FDI this time is quite clear and the actions after that also follow the principle set out from the beginning. It is a priority for large corporations with modern technology and large supply chains.
Therefore, without a careful screening mechanism, Vietnam could be turned into a gathering point for low-quality foreign investment projects, even FDI inflows to Vietnam to “avoid tax” before international trade fluctuations.
At the seminar “Improving the efficiency of FDI attraction and the role of the State Audit”, the State Audit also pointed out many gaps in the policy, the downside and consequences of attracting FDI. causing loss of budget revenue, affecting the environment.
Mr. Doan Xuan Tien, Deputy State Auditor General, assessed that the phenomenon of FDI enterprises declaring and reporting losses is quite common, accounting for about 50% of the total number of operating FDI enterprises in the country, of which there are many reasons but must include the behavior of “transfer pricing”. Statistics over the past years show that the whole country has about 50% of FDI enterprises declaring losses, of which many businesses have continuously suffered losses for many consecutive years. That is also the “inequality” in business, making the “domestic” enterprises increasingly disadvantaged compared to FDI enterprises in the same industry, on the “home field”.
During the seminar on FDI attraction in June, Mr. Nguyen Xuan Phu, Chairman of the Board of Directors of Sunhouse Group, talked about his own “blood and blood experiences” about selecting foreign partners.
In the past, Sunhouse cooperated with a Korean company to invest in microchip factories. The chain and land alone cost 200 billion VND, but Sunhouse only holds 49% of the shares because the leaders of this company believe that “I myself have no experience in this field, so I have full confidence in my partner”.
However, that belief has been acknowledged by Mr. Phu as “misplaced”. The cooperation period shows that this partner is not a company with expertise and potential. They carry out the project in the hope that they can get a loan from a Vietnamese bank. However, the bank refusing to lend this project fell to a standstill. Finally, Mr. Phu had to buy back all of his partner’s capital to implement the project himself.
The story does not stop there. When he wanted to cooperate with another Vietnamese enterprise to make telephone circuits for LG, the partner checked and discovered that the capacity of the machine in the line that Mr. Phu imported from his Korean partner was too low, unable to meet the demand production circuit.
As a business leader with experience working with foreign investors, Mr. Nguyen Xuan Phu, Chairman of Sunhouse Group, also admitted that “it is a painful lesson”. Therefore, when looking at the enthusiastic psychology of many people about the opportunities to attract FDI, Sunhouse leaders always cautiously recommend. Because, foreign investors are “so fake it”.
Source: ndh.vn – Translated by fintel.vn
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