Vietnam's manufacturing industry attractive to foreign investors
Updated at Wednesday, 13 Jun 2018, 08:09
The Hanoitimes - Manufacturing and processing has retained its leading position in attracting foreign direct investment (FDI) in Vietnam with US$5.18 billion reported in the first five months of this year.
The Foreign Investment Agency under the Ministry of Planning and Investment reported that the value accounted for 52 percent of the country’s total investment.
South Korea’s LG Innotek Hai Phong, which has been the largest FDI project in Vietnam this year with an investment of $501 million, has helped the manufacturing to outpace other sectors in FDI attraction during the period.
After putting two new plants in Vietnam into operation in 2015 and 2017, in the first quarter of this year, LG Group decided to increase capital by half a billion dollars in its LG Innotek plant in the northern city of Hai Phong.
LG Group increased capital by half a billion dollars in its LG Innotek Hai Phong plant
The Southeast Asian nation is now considered a main manufacturing hub, with the majority of FDI flowing into the manufacturing and processing sector, representing 44.2 percent of the total investment last year, or $15.87 billion.
Japanese and South Korean investors have led in FDI into Vietnam over recent years with large investment in manufacturing and processing industry. Of which, Samsung has been among the leading investors, with aggressive business expansion activities around the country in the past years. In 10 years, the Korean conglomerate has increased its investment capital in Vietnam from $670 million in 2008 to over $17.3 billion now.
According to Shim Won Hwan, Samsung Vietnam's CEO, in the group's development strategy, Vietnam plays an important role of not only a manufacturing hub, but also of research and development.
Samsung Vietnam currently has eight manufacturing plants and a research & development (R&D) center. Among those eight manufacturing facilities, two are the world's largest when it comes to smartphone production and one the largest plant in Southeast Asia in terms of consumer electronics output.
The government has taken a series of measures, including the removal of red tape so as to improve the investment and business environment to attract large manufacturers and processors to the country in recent years.
According to the latest report from the Central Institute for Economic Management (CIEM), up to 738 business conditions have been either eliminated or simplified by the end of the first quarter of this year.
Thanks to reforms, Vietnam’s ease of business doing index has jumped 14 places to 68th out of 190 economies, according to the World Bank. The country’s competitiveness index has been also ranked 55th out of 137 economies as reported by the World Economic Forum.
The government is continuously pushing to improve the investment climate climate, turning itself into a facilitating government, listening to enterprises, and expressing resolve to remove barriers and encourage the development of production and business.
In the latest move, at the 24th International Conference on the Future of Asia in Tokyo on June 11, Deputy Prime Minister Truong Hoa Binh affirmed that Vietnam is committed to maintaining a stable environment to ensure the rights and interests of foreign businesses investing in the country.
He said the government would continue to work on the legal system and policies related to investment in a consistent and transparent manner.
The government would also double efforts in improving law enforcement and strengthening dialogues with investors to remove obstacles faced them, Binh added.
Early this month, Minister and Chairman of the Government Office Mai Tien Dung, who heads the Prime Minister's task force group, also asked 17 ministries and sectors to report their administrative reform plans to the government before July 30 this year.
Under the direction, the government expected more cumbersome and overlapping legal regulations on investment and business conditions will be removed to further facilitate corporate operations.