The Hanoitimes - The processing and manufacturing sector continued to attract the major share of foreign direct investment (FDI) in Vietnam in the first half of 2018, with US$7.91 billion.
The Foreign Investment Agency under the Ministry of Planning and Investment reported that the value accounted for 38.9% of the country’s total investment in H1 2018. With the foreign inflow, processing and manufacturing has been the bright spot of the country’s industrial sector this year with a year-on-year growth rate of 12.7%, contributing 9.7 percentage points to the sector’s total growth.
The largest FDI project in the manufacturing and processing sector in the first half (H1) this year was the US$1.2 billion polypropylene production project invested by South Korea’s Hyosung Corporation in the northern province of Ba Ria-Vung Tau.
LG Innotek Hai Phong project decided to add US$501 million of investment capital.
South Korea’s LG Innotek Hai Phong project, which was approved to add an investment capital of US$501 million, also helped the manufacturing outpace other sectors in FDI attraction in H1 2018.
Vietnam is now considered a main manufacturing hub, with the majority of FDI flowing into the manufacturing and processing sector, representing 58% of the total investment last year and generating half of industrial production value.
Japanese and South Korean investors have led in FDI into Vietnam over recent years with large investments in manufacturing and processing industry. 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 US$670 million in 2008 to over US$17.3 billion now.
Better performance outlook
Many FDI firms in Vietnam’s manufacturing and processing sector have so far also planned to enlarge their business in the country as they have gained good results and expected better performance in the coming time.
Calling Vietnam a strategic base for its global expansion, South Korean textile giant Hyosung said it will continuously invest up to US$6 billion in the Southeast Asian country, Hyosung chief said during a recent meeting with Prime Minister Nguyen Xuan Phuc.
“Hyosung which exports to 70 countries around the world is the largest (Korean) investor doing various businesses in north, central and southern parts of Vietnam and Hyosung Vietnam is a base for the company’s global expansion,” Cho Hyun Joon, chairman and CEO of Hyosung Corporation, said.
“Not only spandex and tire cords, we also plan to expand businesses in the chemical and heavy industry sector.”
Hyosung is considering establishing a new production line in Quang Nam province, central Vietnam, said the company in a statement, without elaborating on what specific area of business it plans to invest.
Many other Korean companies operating in Vietnam are also seeking more and more workers as their investment continues to rise sharply, according to the Korea Trade-Investment Promotion Agency (Kotra).
Yoon Joo Young, Kotra’s director general in Ho Chi Minh City, said that an increasing number of Korean firms are investing in Vietnam, and they require a large number of workers in many sectors.
More than 700,000 Vietnamese work for Korean companies now.
Meanwhile, the latest survey from the General Statistics Office (GSO) showed that a large number of FDI firms in the manufacturing and processing sector reported stable and better production and business in the second quarter of this year and are hopeful of an even better third quarter.
According to the survey, 85.7% of FDI firms in the processing and manufacturing sector said that their business stabilized and improved during April-June while they also maintain a positive outlook for their business prospects in the third quarter of this year, with 91.3 percent believing that their business will improve and stabilize.