Early promising signs are fanning hopes for the reiteration in 2016 of last year’s record-breaking level of disbursed foreign direct investment, which stood at US$14.5 billion.
The latest statistics from the Ministry of Planning and Investment’s Foreign Investment Agency show that January 2016 saw a 23% jump on-year in disbursed foreign direct investment (FDI) volumes, to US$800 million.
In cities and provinces across the country, a slew of FDI projects are being launched or are reporting an accelerated pace of construction. For instance, in late January, Schneider Electric, a global specialist in energy management and automation, began construction on the first phase of its new plant in Ho Chi Minh City’s Saigon Hi-tech Park (SHTP).
The company is contemplating turning the US$45 million plant into one of its major manufacturing bases in the Asia-Pacific region. The plant is slated to start production later this year, meaning that its projected investment capital is likely to be released during this year.
The developers of Singapore’s US$110 million apparel-making facility in the northern province of Bac Ninh, and the Republic of Korea (RoK)’s US$100 million audio device production facility in the northern province of Bac Giang also plan to expedite their development to satisfy growing market demands.
Other sizable FDI projects are expected to be kick-started this year, including the US$4 billion South Hoi An resort complex in the central province of Quang Nam, and the US$3.2 billion Vung Ro oil refinery in the central province of Phu Yen.
In addition, the ramping up of investment in existing projects run by RoK tech-giant Samsung, such as Samsung’s hi-tech complex in Ho Chi Minh City, which has just doubled its investment to US$2 billion, and Samsung Display in Bac Ninh, which quadrupled its investment to US$4 billion in August 2015, is expected to contribute a remarkable share to disbursed FDI sum in 2016.
2015’s FDI disbursement record was attributed to the execution of raft of large-scale projects during the year, most notably the US$10.5 billion Taiwan-backed Formosa Ha Tinh iron and steel complex, and the Samsung Electronics Vietnam Thai Nguyen hi-tech complex (SEVT) project.
Formasa increased its construction and equipment import last year to be able to roll out the first batch of hot-rolled coil on December 25, 2015, marking the start of operation for Vietnam’s largest FDI project to date. Previous to this, hot-rolled coil steel to supply domestic production needs.
Meanwhile, Samsung, after pouring additional US$3 billion into its hi-tech manufacturing complex in Thai Nguyen in late November 2014, quickly built new workshops and imported equipment to begin production of its metal-frame smartphones in Vietnam in 2015’s first quarter.