24.11.2022, 00:01

New billion USD capital flows into Vietnam

Vietnam faces opportunity to welcome new billion-dollar capital flows, in context of which many foreign businesses are interested.

Vibrant

In November 2022, LEGO Group started construction of a 1 billion USD factory. This is the largest investment project by a Danish enterprise in Vietnam. The plant is expected to create 4,000 jobs when it comes into operation in 2024.

Mr. Niels B.Christiansen, CEO of LEGO Group, said that the factory in Binh Duong helps strengthen LEGO’s long-term development strategy in Asia as well as diversify LEGO’s supply chain.

Julie Sandlau, a Danish jewelry manufacturer, has signed a strategic cooperation agreement with FPT Software to advise and deploy a smart jewelry factory in Vietnam. The plant is expected to be put into operation in 2023.

According to Mr. Soren Roed Pedersen, General Director of Julie Sandlau, the company has a long-term strategy to develop multi-fields in Vietnam.

Mr. Truong Gia Binh, Chairman of FPT Corporation, said that FPT is confident to help Julie Sandlau achieve the goal of digital transformation and expand operations in Vietnam and Southeast Asia markets.


Vietnam attracts foreign investors. (Photo: Hoang Ha)

Vietnam also received additional capital, expanding the scale of large foreign direct investment (FDI) enterprises operating. Samsung plans to disburse additional investments, such as the 1.2 billion USD Samsung Electro-Mechanics Vietnam factory in Thai Nguyen. Samsung’s Research and Development (R&D) Center in Hanoi is expected to be completed by the end of this year.

Similarly, LG, Foxconn, and Panasonic not only manufacture and assemble but also conduct research and development (R&D) activities in Vietnam. Previously, Intel poured an additional 475 million USD into the factory in Vietnam, bringing the total investment after 16 years of operation to nearly 1.5 billion USD.

In a survey by research firm Cushman&Wakefield, more than 200 senior representatives from leading investment firms chose Vietnam as their most preferred investment destination and second among emerging markets.

According to the Financial Times, Vietnam is becoming a bright spot in attracting FDI inflows and for the first time, Vietnam entered the Top 20 economies in terms of FDI attraction in the world. With many advantages, foreign investors are placing great trust in Vietnam’s link in the global supply chain.

Obstacles

Mr. Mark Ridley, CEO of real estate consulting firm Savills Global, assessed, Vietnam is receiving more attention than ever from investors around the world.

Global growth in 2023 will be at 2.5%, and markets such as the UK and Europe are forecast to contract over the next two quarters. This continues to spur interest from foreign investors when Vietnam has the current growth opportunities.


Challenging in human resources and transport infrastructure. (Photo: Hoang Ha)

He assessed that, despite the decline in consumer spending globally, the trend of increasing production in Vietnam continues, typically the shift of manufacturing industry from China to Vietnam after epidemic.

In order to attract foreign capital, Mr. Matthew Powell, an international consultant, said that investors’ difficulties are related to investment quality and accessibility.

For foreign investors, quality infrastructure such as roads, ports and railway systems is extremely important. Provinces with a lot of economic space have limited infrastructure, causing difficulties in accessing raw materials or problems in transporting products.

“Vietnam is in need of more industry 4.0 solutions for smart, high-quality and clear projects that can be easily invested in,” he suggested.

Besides, the increase in industrial real estate rental price is a big obstacle. Research by SSI Securities predicts that land rent is expected to increase by 8% in the industrial zones in the South of Vietnam and 6% in the North.

@ Vietnamnet