Sign up | Log in



Home>>Daily News>>Vietnam>>Economy>>Compiled by Thien Ly

NEWS UPDATES Asean Affairs   June 12, 2018  

Compiled by Thien Ly

According to the Foreign Investment Agency, in the first five months of the year foreign direct investment in new projects was worth US$4.66 billion, 17 per cent down from last year’s figure for the same period.

Capital addition by existing projects plunged by 46 per cent to $2.5 billion.

The first five months of last year saw several new large projects licensed while some existing major investors also brought in more money.

But this year most projects have been small or medium-sized, with the largest being South Korea’s LG Innitek H?i Ph?ng, which has an investment of $501 million.

Thai-invested Bac Lieu Wind Power Project No 3 involves an investment of $365.76 million, while China’s Miracle International Viet Nam has capital of $260 million.

The Government’s new FDI policy seems to be the culprit that has turned off the tap.

Under the new policy, Viet Nam attaches importance to the quality of FDI. It has also made a shift from offering incentives and invitations to carefully selecting projects that match a locality’s conditions and potential to ensure maximum effectiveness.

In other words, while FDI flows may now be reduced, they are of better quality.

Analysts however believe there are many positive signs that indicate the possibility of a strong recovery in the flows by year-end.

In the last three months, Vietnamese leaders have met with government leaders and entrepreneurs in many countries including South Korea, Singapore and Japan, and these meetings have yielded encouraging results.

During Prime Minister Nguyen Xuan Phuc’s visit to Singapore in April, Laguna Lang Co, a Singapore-owned project, committed to an increase in investment from $875 million to $2 billion.

Another Singaporean investor, Sembcorp, has signed a memorandum of understanding with the central province of Quang Ngai to build the $2 billion Dung Quat Power Plant.

Many other investment agreements were also signed under the framework of PM Phuc’s visit to the island nation.

During his visit to Japan in May, President Tran Dai Quang held meetings with members of the Japan Federation of Economic Organisations (Keidanren), the executives of some major companies and the leadership of the Japanese Chamber of Commerce and Industry.

The meetings discussed ways for the two countries to improve their economic ties, thus pointing to the possibility of more Japanese investment in Viet Nam in the coming time.  

Analysts said these meetings in various countries are sure to improve FDI inflows into Viet Nam both in terms of numbers and quality.

In other words, the reports about the drying up of foreign investment are premature, they said.

Foreign investors eye industrial properties

In May, the BW Industrial Development JSC (BW Industrial), a joint venture company between US private equity fund Warburg Pincus and Viet Nam’s Investment and Industrial Development Corporation (Becamex IDC), began operations in the southern province of Binh Duong.  

With over two million square metres of industrial land and $200 million in initial capital, BW Industrial is considered the largest supplier of industrial properties and logistics services in Viet Nam.

In particular, the joint venture plans to develop and provide institutional-grade industrial and logistics properties across Viet Nam in all key economic regions.

It expects to achieve by “leveraging our strong partner relationships with tenants and development expertise to deliver industrial real estate properties including ready-built factories, logistics warehouses and other industrial-related commercial properties,” it says.

The company has bought land for eight projects in five localities in key economic zones in the north and south, including Binh Duong, Dong Nai, Hai Phong, Hai Duong and Bac Ninh.

Before Warburg Pincus, many other foreign investors had also sunk considerable amounts of money in industrial infrastructure facilities, particularly construction of factories for lease.

Japanese companies are among the foreign investors most interested in ready-built factories with a series of projects already developed or being developed through joint ventures with local partners.

They include Kizuna JV, Chodai, Kobelco Eco-Solutions, and JESCO Holdings.

Kizuna JV, for instance, owns two logistics warehouses covering a combined area of 71,000sq.m in the southern province of Long An. It provides facilities for 80 local and foreign companies.

It is also building a ready-built factory for leasing out, Kizuna 3, which will comprise 40 factories and workshops, each 300-600sq.m in size.

Other industrial infrastructure developers such as Thailand’s Amata and Singapore’s Sembcorp, which have invested in industrial parks in Vi?t Nam for a long time, are also planning to build factories in anticipation of new investors to flock to the country soon.

Last March, Amata Viet Nam received a licence from Qu?ng Ninh Province’s People’s Committee to build the Song Khoai Industrial Park in Qu?ng Y?n Town.

This will be the first IP developed by Thai investors in the province and the fourth by foreign investors since 2014.

To spread over an area of 714ha, the construction will be done in five phases at a cost of VN?3.5 trillion ($153.6 million). The zone hopes to get its first tenant by the end of next year.

Amata hopes to attract investors operating in the manufacturing and processing, hi-tech, bio-tech and software sectors from many countries and territories.

Hemaraij, another Thai investor, is working with a Vietnamese company to build an industrial zone in the central province of Ngh? An. This $1 billion project will be developed on an area of 3,200sq.m and includes two industrial parks. In the first phase, they will develop an industrial estate on an area of about 500ha.

Why are many foreign investors interested in industrial properties in Vi?t Nam?

Experts said this is because more and more foreign companies want to do business in Viet Nam because the country remains a “strategic” destination and is now considered the new workshop by manufacturers around the world.

The country offers many advantages, including affordable labour costs and incentives for investors in economic zones.

Besides, it has signed many free trade agreements (FTAs), including with the EU and South Korea, and recently joined the CPTPP, which is expected to bring 90 per cent of trade tariffs between its 11 economic members down to zero, creating free trade in the Asia Pacific.

CPTPP, or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, now has 11 members -- Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vi?t Nam.

Viet Nam is thus a magnet for foreign investors who want to exploit the vast free trade market created by its FTAs and the CPTPP.

According to the Ministry of Planning and Investment, foreign investment inflows into Viet Nam have been rising in recent years.

In 2016, the country attracted $24.86 billion worth of FDI, and the figure rose to $35.88 billion last year.

Notably, most of the investment was in the processing and manufacturing sector, which is increasing the demand for factories and other production-related facilities.

Not wanting to miss this opportunity, many foreign investors have quickly shifted their investment into industrial infrastructure, particularly large industrial parks and other industrial properties and “built-to-suit” opportunities.

“Built-to-suit” is a way of leasing property for commercial purposes, in which the developer or landlord builds to a tenant’s specifications. The landowner pays for the construction to the specifications of the tenant, and the tenant then leases the land and building from the landowner, who retains ownership. Build to suit is frequently used by tenants who wish to occupy a building of a certain type but do not wish to own the building.

An analyst from Jones Lang LaSalle said Viet Nam is among the Southeast Asian countries that are benefiting hugely from industrial projects and logistics services.

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below

  Today's  Stories                      June 12, 2018 
• Inflation may yet peak —Diokno
• Government appoints 5 operators for $292m oil and gas blocks Subcribe: Asean Affairs Global Magazine
• Thai Nguyen seeks investment in 65 projects Subsribe Now !
 • Compiled by Thien Ly
Research Reports
on Thailand 2007-2008

• Textiles and Garments Industry
• Coffee industry
• Leather and footwear industry
• Shrimp industry

• ADB expands Trade Finance Program by $350 million
Asean Stock Watch   June 11,  2018

• Asean Stock Watch-June 11, 2018
Asean Analysis                June 11,  2018
• Asean Analysis June  11, 2018
Inflation may yet peak —Diokno
Advertise Your Brand

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent
• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore • Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline • Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

| Terms of Use | Site Map | Privacy Policy  | DISCLAIMER |

Version 5.0
Copyright © 2006-2020 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand