German investors choosing Danang
German investors choosing Danang
German ASEAN Power and Marquardt Group are planning to develop costly projects in the central city of Danang to tap into the local improved business climate.
Last week, German ASEAN Power talked with the local authorities on the possibilities of investing in a solar power project in the city.
“Vietnam is a prioritised market for our development strategy over the next five years. With improved infrastructure and a growing energy demand, Danang is a suitable location for the project,” said Moritz Sticher, general director of the German firm.
“A group from our firm will visit Danang in late July 2016 to study the location. We plan to invest $400 million in this solar power project with a capacity of 400megawatts, with a first phase target of 20-100MW. We will use local contractors to transfer technology to the city,” he noted.
On the same day, a group from Marquardt Group led by vice president in Asia Ludger Schoenecker, studied the local investment climate for its new project, which is part of its future business expansion.
“We are seeking a location in Vietnam to build a plant manufacturing hi-tech products used in the automotive industry, among others. Danang is a potential location for this, with the first phase costing EUR35 million ($38.86 million),” he added.
“The city made a strong impression on us with its professional working style and foreign direct investment attraction strategy and its focus on high-tech and environmentally-friendly sectors. We hope to develop the project in the coming time,” he noted.
As a leading manufacturer of electro-mechanical and electronic switching systems for automobiles and other sectors, Marquardt has plants in 14 countries worldwide. Some famous clients include Mercedes Benz, BMW, Volkswagen and General Motors. In 2015, Marquardt Group’s revenue reached EUR1 billion.
Tran Van Mien, Deputy Chairman of the Danang People’s Committee, supported these investment plans, affirming that Danang had magnificent supporting policies and would always create favourable conditions for investors to the city.
The plans are a good sign for Danang, which saw a sluggish influx of foreign direct investment (FDI) last year. It ranked 33rd among 63 cities and provinces nationwide in terms of attracting FDI. Currently, South Korea and Japan are the biggest foreign investors in Danang. The city’s FDI ranking did not improve in the first six months of 2016, when Danang dropped to 53rd. This is despite the central city’s good investment environment and a high Provincial Competitive Index (PCI) rating for three recent consecutive years.
The local authorities earlier blamed the situation on a lack of cleared land and a higher land rental rates than other central neighbouring provinces.
In a move to promote investment inflows to the city, on June 24, Danang’s leaders held a meeting with more than 200 from over 17,000 firms operating in the city.
Huynh Duc Tho, Chairman of the Danang People’s Committee, emphasised that the city would continue to simplify administrative procedures to create a healthy business climate for businesses.
