Rising industrial park foreign investment is turning the page on a positive chapter in Vietnam’s sometimes hard luck investment story.
Total foreign direct investment (FDI) commitments are declining in Vietnam, but new industrial park investment registration shows the country is still attractive to foreign manufacturers.
Committed FDI into industrial parks nationwide from January to July was $3.315 billion, up 15 per cent against the same period last year, according to the latest statistics from the Ministry of Planning and Investment’s (MPI) Department of Economic Zones Management. In which, foreign investors committed to invest into 143 new projects in industrial parks with total investment capital of around $2.28 billion, while registering to expand investment at 129 projects worth around $1.03 billion, the report said.
Vietnam witnessed a drop in new FDI commitment during the past eight months with 26 per cent less than the corresponding period last year, but the MPI’s Foreign Investment Agency reported the biggest drop was seen in the risky property sector, which accounts for only 3 per cent of total new commitment over past eight months in comparison with 20 per cent in the same period last year.
British Business Group in Vietnam chairman Patrick Regis recently told VIR that foreign investors’ business sentiment was falling though they remained confident about Vietnam’s long-term business potential.
“Most foreign manufacturers are long-term investors so that they will have a long view on Vietnam’s solid advantages like abundant workforce, market potential and political stability rather than the short-term pains of local economy,” Prof. Nguyen Mai, Vietnam Association of Foreign Invested Enterprises chairman, said.
The investment commitment from global giant manufacturers underlines Vietnam’s attractiveness as a good manufacturing base. United States-based First Solar early this year committed to build a $300 million solar panel factory in Ho Chi Minh City.
Taiwan’s Wintek Group in March also registered to build a factory in Bac Giang province to produce touch panels for Apple’s iPhones and iPads.
In May, the world’s leading glass and glazing system manufacturer NSG Group announced to expand investment in My Xuan A industrial park in Ba Ria-Vung Tau province. Total investment will be $320 million, with both lines due to start production in 2013.
The MPI expects total FDI commitment into industrial parks this year to reach $6.5-$7 billion, accounting about 50 per cent of total committed FDI.