Southeastern localities remain FDI magnets

Southeastern localities remain FDI magnets

In the first eight months of 2021, southeastern localities such as Ho Chi Minh City, and Dong Nai and Binh Duong provinces maintained a steady pace of foreign direct investment (FDI).

Foreign-invested companies make efforts to maintain production

During the January-August period, foreign enterprises invested in 58 of the 63 provinces and cities across Vietnam. The Mekong Delta province of Long An was the biggest FDI attractor with more than US$3.6 billion. It was followed by the country’s southern hub - Ho Chi Minh City - with nearly US$2.2 billion, and Binh Duong Province with nearly US$1.7 billion.

According to the Dong Nai Industrial Zones Authority, the province attracted nearly US$946 million in FDI in the first eight months of the year, exceeding the annual plan by 35 percent. Of the total, 37 were new projects with total capital of nearly US$298 million and 80 projects were ongoing ones with added capital totaling nearly US$648 million. Le Van Danh, deputy head of the Dong Nai Industrial Zones Authority, said that despite the complicated developments of the Covid-19 pandemic, foreign investors have poured capital into new projects, as well as added capital for ongoing projects because they are hopeful about the investment environment in Dong Nai Province in particular and the southeastern region in general.

Over the past two months, foreign-invested companies in the southeastern region have made greater efforts to implement Covid-19 prevention and control measures and maintain production. Due to the impact of the pandemic, they have only run at 25-60 percent of capacity but they believe the pandemic will be brought under control so that production can be restored in the last quarter of the year.

The Commercial Counselor at the Consulate General of the Republic of Korea (RoK) in Ho Chi Minh City, Ahn Seong Ho, said many RoK companies have been expanding their investments in the southeastern region in expectations of a strong recovery once the pandemic is controlled.

Foreign-invested companies expressed their hope that domestic supply chains would not be disrupted, and said they would not apply for tax reductions or restructuring of repayment periods.

Tran Tien Phat, general director of the Datalogic Vietnam Company, said the company currently has only 502 employees working under the “three-on-site” model - working, eating and sleeping at the worksite - and the “one route, two destinations” model. Sales fell from US$18.5 million in June to US$11 million in July. Phat suggested that Ho Chi Minh City adopt solutions to avoid supply chain disruptions.

According to an Intel Vietnam Company representative, the second dose of vaccines should be provided to employees as soon as possible in order to reach community immunity and allow them to get back to work.

Vo Van Hoan, vice chairman of the Ho Chi Minh City People’s Committee, said the city is facing many difficulties due to the resurgence of Covid-19, affecting local economic development and people’s lives. The risk to production chains is great, Hoan said, adding that foreign-invested companies should place trust in Vietnam’s fight against the Covid-19 pandemic and help localities overcome difficulties.

VietNam Economic News