Hung Yen boasts FDI investment appeal
Hung Yen boasts FDI investment appeal
Foreign direct investment (FDI) has become Hung Yen’s highlight, making significant contributions to the province’s socioeconomic development by creating jobs and increasing revenue for the provincial budget.
Pham Truong Tam, director of the Hung Yen Industrial Zones Management Authority, stated that the local authorities have been focusing on enticing investment into the province, securing positive results in terms of funding for its industrial zones (IZs).
Out of 17 planned IZs, 11 have been accepted and certified for investment. They cover an area of 2,873 hectares and boast a total investment surpassing $1.02 billion. Alongside the funds going into the IZs, there are positive signs when it comes to investment into the manufacturing plants within them.
Since 2020, the IZs in Hung Yen have drawn more than $2.2 billion, including $558 million in 2020, $611 million in 2021, and $730 million in 2022 – the current record level.
In the year to date, Hung Yen’s IZs have welcomed $327 million in investment funds.
By May, the province’s IZs were home to 520 ongoing investment ventures, with a total registered capital surpassing $7.1 billion.
The foreign-led projects in local IZs are concentrated on several industries, such as electronic devices, metal component manufacturing, food processing, textiles, and apparel, among others.
The most capital-intensive foreign-invested projects are Toto Vietnam Co., Ltd.’s sanitation equipment manufacturing project worth $403 million, Kyocera Vietnam Co., Ltd.’s various projects with $379 million in investment, and Mektec Co., Ltd.’s motherboard manufacturing facility at $300 million.
One of the differentiating factors of FDI compared to other sources of investment is the accompanying technologies offered by the foreign investors.
FDI is creating many jobs for the local workforce in Hung Yen and the surrounding area
These high-tech projects not only help to drive the local economy’s development, but also serve as a learning experience for domestic businesses in the application of modern technologies from developed economies.
The engagement of foreign businesses across the board is an important factor in the modernisation of Hung Yen’s economic structure.
FDI helps accelerate exports, improve provincial budgets, and increase the regional GDP. In 2022, Hung Yen’s regional GDP rose by 12.84 per cent, with approximately $4,420 per person, and the domestic budget revenue exceeded $121.7 million.
The engagement of foreign businesses across the board is an important factor in the modernisation of Hung Yen’s economic structure.
In the first quarter of 2023, Hung Yen’s economy expanded by 8.14 per cent on-year, ranking 12 out of the 63 localities across Vietnam.
Among those, industrial manufacturing inched up by 6.59 per cent, and the services sector had an impressive recovery, with retail increasing by 111.15 per cent.
By the end of May, gross industrial production had increased by 0.04 per cent, with that of manufacturing rising by 0.29 per cent.
Aside from bringing funds, foreign-invested projects brought in new technologies, enabling Vietnam to manufacture products that could not previously be made in the country. Several new sectors and products have been created by leveraging these new technologies.
Besides this, imported technologies have minimised the need to import specialised goods in many sectors such as oil refining, construction material manufacturing, and consumer electronics.
Another benefit is workforce modernisation, as many personnel are now capable of performing specialised roles with modern technologies. The jobs created with these new roles also encourage the education of the local workforce.
Job creation in Hung Yen specifically, and across the whole of Vietnam in general, is one of the most significant contributions that come from overseas funding. To date, Hung Yen provides stable jobs for more than 78,000 labourers.
Alongside that, many jobs have been created as a side effect of the industrialisation process, namely those in services and support sectors.
The labour force in foreign-led companies is often of higher quality compared to the domestic workforce, thanks to training either taking place in local units or at companies stationed abroad.
On June 27, Tran Quoc Van, Chairman of Hung Yen People's Committee, met with Sumitomo Corporation from Japan at the headquarters of the committee.
Sumitomo Corporation meeting with Hung Yen's leaders on the potential expansion of its investment
At the meeting, a representative of Sumitomo Corporation thanked Hung Yen for providing the necessary conditions for Japanese companies to operate, and expressed a desire to expand Thang Long II Industrial Zone.
Thang Long currently has 104 foreign-invested projects, with the total registered investment capital at $3.27 billion. The majority of investors come from Japan, including Kyocera, Hoya, Nippon, Daikin, Toto, Panasonic, and more, attesting to the fact that Hung Yen is an attractive destination to international corporations.
Assessing the importance and the positive impact of FDI in Hung Yen, Chairman Van said, "Hung Yen has been, and will continue to be, focused on creating compelling conditions for the development of large-scale IZs with modern technologies."
“This is a central strategy and our number-one priority to further attract investment, especially from abroad. This will support our goal of achieving fast, sustainable, and environmentally friendly development. We are also committed to streamlining our policies and improving local infrastructure to further support foreign businesses,” concluded the chairman.
With a clear direction and strategy for investment development, Hung Yen proves an ideal destination for domestic and international investors, turning its goal of becoming an industrialised locality by 2025 into a real possibility.
