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Through challenges, foreign investors become more attached to Vietnam
In 1995, Nestlé Group officially returned to Vietnam when Nestlé Vietnam Co., Ltd was established. Nestlé’s total investment in the country has reached 730 million USD.
Vietnam is rated as one of the most efficient and flexible markets among all markets where Nestlé is present, said Nestlé Vietnam General Director Binu Jacob.
Nestlé will invest 132 million USD in Vietnam in two years to double its production capacity of instant coffee for export and turn Vietnam into a production center for liquid food products to export to Asia and Australia.
For Korean conglomerate Samsung, since 2008 this group has poured 17.7 billion USD into Vietnam and has repeatedly expressed its ambition to bring Vietnam beyond its role as a key global production base to become a research and development center.
This group has decided to build the Samsung Research and Development Center in Hanoi at a cost of 220 million USD, in order to improve its research and development capacity in the medium and long term.
General Director of Samsung Vietnam Choi Joo Ho said that not only for Samsung but also for all foreign investors Vietnam is providing an attractive investment environment, with abundant labor force, stable socio-political situation, production and circulation infrastructure and investment incentives.
Despite negative effects arising from the COVID-19 pandemic, Mr. Choi still assessed that “in the long run, Vietnam remains an attractive investment destination for foreign investors”.
He said: “Based on the confidence accumulated after overcoming the crises and the trust in the Vietnamese Government, we are expanding our investment. So far, Samsung has disbursed all the approved investment capital and every year, we still add additional investment worth of hundreds of millions of USD.”
In fact, the amount of newly registered foreign investment capital in Vietnam in the past nine months decreased, but the amount of additional registered capital rose sharply.
Data from the Ministry of Planning and Investment shows that in this period, the number of newly-licenced foreign investment projects decreased by 37.8% with 1,212 projects. However, the registered capital of these projects reached nearly 12.5 billion USD, up 20.6% over the same period of 2020.
Vice Chairman of Bac Ninh Province Vuong Quoc Tuan said that the province lured over 650 million USD in the past nine months, an increase of 1.5 times compared to 2020. “We expect that if the situation stabilizes, Bac Ninh would attract more than 2 billion USD of foreign capital for the whole year.”
Dorsati Mandani, Senior Economist of the World Bank (WB) in Vietnam assessed: Despite the challenges in the third quarter of 2021, when looking at FDI inflows in August, the WB still saw the strong commitment of investors. In January-August 2021, the total committed FDI capital reached 14 billion USD, only 2% lower than the same period in 2020 while the disbursed investment capital reached 11.7 billion USD, up 2% year on year.
“It’s a sign that international investors still expect to develop their businesses in Vietnam,” the WB expert said, adding that a global food producer disclosing that they were investing another 180 million USD in Vietnam.
New strategy to strengthen trust
Bac Ninh is the pioneer in giving initiatives to maintain production when the Covid-19 epidemic broke out with the “3-on-site” model.
Bac Ninh’s model was then applied in many provinces and cities across the country, contributing to maintaining production in the context of the epidemic.
According to Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc, the Ministry coordinated with the Vietnam Business Forum Alliance (VBF) and business associations to survey over 500 foreign-invested enterprises.
Overall, the COVID-19 pandemic has had a negative impact on these businesses.
According to the survey results, 67% of European companies had positive assessment of the prospect of Vietnam’s business environment. Japanese businesses expressed optimism about the possibility of early recovery of the Vietnamese economy in 2021, of which 47% planned to expand production and business in Vietnam.
Korean enterprises all had new investment plans in Vietnam. Most American businesses appreciated the Vietnamese Government’s efforts in responding to the epidemic, and they believed that Vietnam would soon control the epidemic.
However, Ngoc said, Vietnam still has to continue making efforts to quickly control the epidemic and resume normal production and business activities to avoid disruptions to the supply chain.
Nestlé Vietnam General Director Binu Jacob expressed his support for the Vietnamese Government’s strategic policy of “safe adaptation to the virus”, reopening the economy and removing social distancing measures in according to Directives 15 or 16 or similar restrictive measures in the future.
According to him, reopening should be implemented right now to establish a “new normal” with a clear plan and specific time.
A national policy and coordination among provinces and cities are very important. The fact that each province has its own regulations has caused production and supply chain disruptions.
General Director of Samsung Vietnam Choi Joo Ho also expressed his full support for the Vietnamese Government’s policy in pursuing the dual goals of “effective prevention of pandemic” and “economic development”. In particular, Samsung understood the force majeure of recent strong epidemic prevention measures to control the 4th wave of COVID-19 epidemic in Vietnam.
However, Mr. Choi Joo Ho said that if strong epidemic prevention measures continue for a long time, it may cause economic losses.
Accordingly, maintaining the global supply network of industrial parks is an essential and extremely important factor for businesses operating manufacturing plants. It is very urgent to build a regime to ensure “uninterrupted production” in any circumstance, he said.
Luong Bang
Source: https://vietnamnet.vn/en/feature/through-challenges-foreign-investors-become-more-attached-to-vietnam-779325.html