Billions of USD in foreign investment heading for Vietnam
Vietnam now has the opportunity to receive a new capital flow worth billions of dollars as it has caught the attention of many foreign investors.
In November 2022, LEGO kicked off construction of its factory worth $1 billion. This is the project with the largest ever capital invested by a Danish enterprise in Vietnam. The factory is expected to create 4,000 jobs when it becomes operational, slated for 2024.
Niels B.Christiansen, CEO of LEGO, said the factory in Binh Duong would help the group consolidate the long-term development strategy in Asia and diversify LEGO’s supply chain.
Julie Sandlau, a jewelry producer from Denmark, has signed a strategic cooperation agreement with FPT Software on the consultation and deployment of a smart jewelry production factory in Vietnam. The factory is scheduled to begin operation in 2023.
According to Soren Roed Pedersen, CEO of Julie Sandlau, the enterprise has designed a long-term strategy on multi-field development in Vietnam.
Truong Gia Binh, president of FPT, said it is confident in helping Julie Sandlau implement digital transformation and expand operations in the Vietnamese and Southeast Asian markets.
The increase in investment also comes from operational projects. Samsung plans to disburse additional investment items, including $1.2 billion for Samsung Electro-Mechanics Vietnam in Thai Nguyen. Its R&D center in Hanoi is expected to be completed by the end of the year.
Similarly, LG, Foxconn and Panasonic carry out production and assembly in Vietnam, but also R&D activities. Intel poured $475 million more into its plant in Vietnam, raising total investment capital after 16 years of operation to $1.5 billion.
In a survey conducted by Cushman & Wakefield, more than 200 high ranking officers from leading investment companies have chosen Vietnam as their priority investment destination.
The Financial Times commented that Vietnam is becoming a bright spot in attracting moving investment capital flow and the country has for the first time added its name to the list of 20 top economies in terms of FDI attraction.
Mark Ridley, CEO of Savills Global, said that Vietnam has received the most attention ever from investors.
The global growth rate is expected to be 2.5 percent in 2023, while markets like the UK and Europe are believed to see recession in the next two quarters. This would continue to promote foreign investors’ attention as Vietnam has growth opportunities.
However, analysts point out that the increase in industrial real estate price is an obstacle. SSI predicted that land rent would increase by 8 percent in IZs in the south and 6 percent in the north.