Korea Invested 2.7 Billion USD in Binh Duong

Korean investors have set up business in Vietnam a lot in the recent years and this country is also the third largest foreign investor in Binh Duong province with 619 projects.

At the meeting between Binh Duong People’s Committee and Korean investors held on August 16th, according to reports of Department of Planning and Investment of Binh Duong province on the attraction of foreign direct investment (FDI) in the first six months of 2017, there was positive changes. The total FDI capital reached 1.726 billion USD, equal to 123% of the year plan and increase by 51% over the same period in 2016.

Specifically, there are 97 new projects with capital of 1.034 billion USD, 62 projects adjust and increase capital of 670 million USD. The sectors attracting a lot of investors are electricity, electronics, mechanics, pharmaceuticals, chemicals, trade and services…

Particularly for Korean investors, in six months of 2017, there are 16 new projects and 17 projects adjusted for capital increase. Overall, total investment reached 306 million USD. Accumulated until June 30th, Korea is the third largest foreign investor in Binh Duong (after Taiwan and Singapore) with 619 projects worth 2.694 billion USD.

With the efforts to improve the investment environment, Binh Duong is always attracted by investors, the number of foreign investors coming to the province to explore investment opportunities in the first half of 2017 continued to increase over previous years. FDI attraction results of Binh Duong is a good signal, affirming that the investment environment of the province is very attractive to foreign investors.

Binh Duong currently has 28 industrial parks with an area of 10,560 hectares and 11 industrial clusters with an area of over 802 hectares, occupancy rate reaches over 70%.

Binh Duong is still implementing some new industrial zones and expanding existing industrial parks such as Bau Bang Industrial Park (1,000 ha), Nam Tan Uyen (446 ha), approving new investment of An Lap industrial cluster (75 ha).

In the period 2016 – 2020, Binh Duong will develop up to 33 industrial parks with an area of nearly 15,000 ha.

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TATA Build Instant Coffee Factory in Vietnam

Vietnam has always been an attractive market for foreign enterprises to come and set up business in Vietnam and most recently, TATA Coffee Ltd – a subsidiary of TATA Group has become the first company in India building instant coffee factory in Vietnam.

TATA Coffee is a wholly-owned subsidiary of TATA Global Beverages (TATA Group) – Asia’s largest coffee company and one of the largest instant coffee exporters in India.

The ground-breaking ceremony of instant coffee factory in Vietnam marked the beginning of a coffee factory project with capacity of 5,000 tons of instant coffee per year of TATA Coffee Ltd in VSIP II Industrial Park (Binh Duong).

TATA Coffee Factory is set to start production in 2019, aiming to serve its global clients with a new mix of instant coffee.

According to CEO of TATA Coffee Ltd, TATA Group has a close relationship with Vietnam in various fields such as automobile, steel, trade, energy and watches. With this investment, the beverage industry will also become a major area of TATA’s participation in the investment here. Although TATA’s products have been exported to more than 40 countries around the world, instant coffee so far has only been produced in India.

Vietnam has marked TATA’s first breakthrough outside the Indian borders as a manufacturer, so this is TATA’s milestone on the journey to become a global company specializing in coffee. TATA Coffee will make every effort in coffee processing operations with a special focus on safe working conditions. The project will contribute positively to foreign exchange earnings and create more local jobs.

It is reported that Vietnam is currently the world’s largest producer of Robustas, which is conducive to providing a favorable raw material for the plant.

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Thailand: Long-term Investors in Vietnam Market

Thailand is one of the few investors involving in a lot of industries in Vietnam, they set up business in Vietnam for years and this trend has not shown signs of decline.

Thailand was one of the first foreign investors came to Vietnam in 1992. To date, Thai investors have committed to invest in Vietnam 468 projects with a total registered capital of 8 billion USD, ranked 10thamong countries and territories investing in Vietnam. Thai investors have poured capital into many sectors of Vietnam’s economy, from processing industry to agriculture, wholesale and retail…

After more than 25 years of presence in Vietnam, Thais have quietly acquired BigC, Metro, Nguyen Kim, Vinamilk, Prime… The chain of wholesale and retail stores of Thai people has spread throughout Vietnam. Not many foreign investors in Vietnam can do that.

With a large investment scale, it can be said that Thailand is the leading investment partner of Vietnam. Meanwhile, in ASEAN, Thailand is Vietnam’s largest trading partner, while Vietnam is Thailand’s second largest export partner, with total bilateral trade in 2016 reached 12.5 billion USD. Of which, Vietnam exports to Thailand reached 3.7 billion USD. In the first half of 2017, total two-way trade turnover reached nearly 7 billion USD, increase by over 22% over the same period last year. The two sides set a target to bring two-way trade turnover to 20 billion USD by 2020.

However, Vietnam and Thailand are also direct “competitors” in both competition to attract foreign investment and export goods. There are a lot of Thai exports that are similar to Vietnam’s exports, in which rice is one of the typical items.

In terms of investment attraction, Thailand has long been a leading investment destination in the region and Vietnam is competing directly with this market. In recent years, many Korean and Japanese investors, including LG, have decided to move production sites from Thailand to Vietnam. According to a report released by PwC, Vietnam has surpassed both Thailand and Malaysia in terms of new FDI inflows. Even PwC says that overtaking Thailand and Malaysia, Vietnam is at a “booming point” in the development process, thanks to a series of trade agreements being signed and an increasingly transparent and open business environment.

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Foreigners Rushing to Buy Real Estate in Vietnam

Hundreds of millions of dollars are waiting to pour into Vietnam real estate market in most segments. The real estate market attracts a lot of foreign investors, mainly through M&A activities.

According to the newly announced report from Savills Vietnam, in quarter 2 of 2017, housing development projects received strong attention. China Fortune Land Development Group has bought shares in VinaCapital’s Lotus Dai Phuoc project for 65.3 million USD. Dai Phuoc Lotus is a residential area project with a total area of 198.5 million hectares in Dong Nai province, bordering Ho Chi Minh City.

In addition, VinaCapital’s Times Square project (Hanoi) worth 41 million USD is also transferred to Elite Capital Resources Limited.

Japanese investors are also active in the market. Nishi Nippon and Hankyu cooperate with Nam Long to build a 26 hectares Mizuki Park residential project in Binh Chanh district, Ho Chi Minh City with total investment capital of 351 million USD.

In addition, Aeon Mall – the famous Japanese retailer has officially co-operated with BIM Group to develop the second shopping center of Aeon in Hanoi with an area of 16.7 ha, the estimated investment capital is 200 million USD.

In the field of industrial real estate, Hemaraj Land & Development (Thailand) and Cienco 4 (Vietnam) have officially confirmed the joint venture to establish 1 billion USD industrial park on 3,200 hectares of land in Nghe An province.

In recent years, the real estate market of Vietnam has witnessed the strategic moves of investors, including mergers – acquisitions and development – cooperation. Some typical deals include Gaw Capital’s acquisition of a series of high-value commercial properties from Indochina Land, Gamuda Land’s acquisition of stake of local investors in the Celadon City project.

At the same time, the M&A market happened on a large scale in all different segments, such as the joint venture between Chau Tai Phuc and Suncity Group into the large resort and casino project in Nam Hoi An with total investment of up to 4 billion USD or the deal that Lotte acquired Diamond Plaza.

The market is expected to continue to be active in 2017 with a series of acquisitions and mergers.

According to JLL Vietnam, in the first half of 2017, Vietnam has attracted about 19.2 billion USD of foreign investment capital, increase by 54.8% over the same period last year. This shows that Vietnam is still one of the potential markets for investment in Southeast Asia.

There are hundreds of millions of dollars waiting to be poured into the domestic market in most segments, including housing, offices, retail, hotels and industrial parks, according to JLL. Investors come from different countries like Japan, Korea, Singapore, and the growth of investor groups from China.

Joint ventures are becoming more popular among foreign investors – with strong financial strength and experiences, they will work with local corporations – investors who holding land in the market and also has close relationships with local authorities.

The hotel segment has always attracted the attention in the recent time with a lot of foreign capital poured into Vietnam. Forecasting this trend will continue to grow, while other markets such as industrial park and education are also growing constantly. The affordable housing market is seen as attracting much investment capital, largely due to the rise of the middle class.

Lastly, according to Savills Vietnam, M&A will continue to be the form that the vast majority of investors will use to enter the Vietnamese market in order to realize their goals.

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Startup in Ho Chi Minh City Will Be as Convenient as in Singapore

A series of specific commitments has been confirmed by HCMC’s Party Secretary Nguyen Thien Nhan to help startup environment in HCMC becoming as favorable as in Singapore.

The city is committed to preparing an industrial park reserved for newly startup and innovative businesses. Secondly, the procedure for setting up new business in HCMC will be as good as in Singapore. Third, in addition to private investment, the city will also, on a case-by-case basis, pilot public-private partnerships in support of innovative entrepreneurship.

In addition to the above 3 commitments, according to Mr Nguyen Thien Nhan, HCMC will have a general information page to reflect the creative start-up activities in the area. At the same time, he decided to meet face-to-face with the startup community twice a year to listen to their mind and remove difficulties in time.

In general, in the past year, HCMC has had very specific and significant results in comparison with other provinces in terms of start-up activities. According to director of the Department of Science and Technology of HCMC, this agency has set up 5 spaces to support innovative start-ups and links with 24 business incubators with a total floor area of over 22,000 square meters. Of which, 50% capital is from socialization.

In addition, The SpeedUp 2017 program has provided financial support tools from the budget for innovative startup projects through enterprise incubators. In the past 8 months, this program has received and processed 112 innovative startup project applications. The number of selected projects was 14/112 (12.5%), which is quite high compared to the current selection rate of many investment funds (VIISA reaches 5%, VSVA reaches 8%).

This year, the HCMC Department of Science and Technology has also set up 4 Steering Committee for Innovative Ecosystems for 4 key areas of the city, including mechanics, food processing, plastic – rubber – chemistry and information technology.

With a network of 145 consultants and innovative start-up advisors from many different disciplines, up to now, 938 start-up projects have been connected to help develop business ideas. There are 3,200 individuals and start-up groups connected to investors, experts and consultancy organizations. Moreover, over 300 startup products are promoted to the community.

However, a general assessment from the Department of Science and Technology of the City, most startups in Vietnam are newly invested at the seed stage with small scale and the possibility of breakthrough growth is not high. This is a matter of concern.

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Industrial Park Welcome the “Wave” of Investment from TPP

Trans-Pacific Partnership (TPP) between the 12 members, including Vietnam, has recently concluded negotiations after more than 5 years of hard working.

Before that, many enterprises with foreign direct investment (FDI) have come to establish factories and business in Vietnam to prepare for the economic benefits that TPP brings.

According to Long An Economic Zone Authority (LAEZA), up to September 30th, they have received 122 investment projects, increase by 14.02% compared to the same period in 2014.

In which there are 67 FDI projects with a total investment of over 395 million USD, increase by 2.37% over the same period in 2014. Enterprises mostly invest in such areas as apparel, footwear, textile, plastic… and factories located mainly in the industrial zone in Ben Luc, Duc Hoa, Can Giuoc.

Tan Tao Group (ITA), the investor of Tan Duc Industrial Park said that in September, Long An Provincial People’s Committee, the Ministry of Science and Technology and the Ministry of Natural Resources and Environment have approved Trillions Corporation (USA) to invest in Tan Duc industrial park phase 2 in Duc Hoa.

This project is a 30 hectares complex with an expected investment of 120 million USD, which is invested by the Trillions Group and their partners  like Cosmo, CHA Technologies, Starensier US, Mountian Star, Billion TW… to provide products for Adidas and Nike, as well as catching up with the opportunities from TPP in the future.

The business opportunities after Vietnam signed the free trade agreement (FTA) and the outlook from TPP has attracted waves of FDI as well as the shift of investment projects from China to Vietnam.

Earlier, in August, Long An Provincial People’s Committee has granted investment certificate for the spinning factory of Huafu Group (Hong Kong) with an area of 35 ha and a total investment of over 300 million USD.

The project has a planned capacity of pulling 30,000 tons mill per year, estimating to contribute more than 3,000 jobs for local workers.

Huafu is one of the largest economic conglomerate specialized in spinning with experience of more than 20 years of development in Hong Kong. Moreover, they are the world’s largest supplier of high-end color yarn for the textile industry of more 60 countries and regions, such as Europe, America, Japan, Korea and Southeast Asia.

Regarding FDI in the past 9 months, total FDI in industrial parks, economic zones throughout the country reached more than 8.7 billion USD, increase by 12% over the same period.

A recent study from Standard Chartered Bank showed that there is a shift of investment capital from China to ASEAN countries to take advantage of opportunities.

Approximately 44% of units involved in the study chose Vietnam because of large domestic market, 29% choose because of lower operating costs and 18% choose because of abundant labor.

As for the garment industry, when the TPP takes effect, this is the advantaged industry therefore large foreign companies have landed in Vietnam in recent years.

To welcome new waves of investment, many localities like Ho Chi Minh City and Long An have adjusted the investment policy or extended the area of the industrial park.

ANT Consulting is here to assist you from the outset; providing intelligence, information, management or support and administrative services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

• Market Entry
• Tax Advice
• Legal Advice
• Outsourcing Services

We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +848 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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Pho Noi Textile Industrial Zone (Under Pho Noi B Industrial Zone)

Geographic location:

Located near the intersection of Highway 5 and Highway 39, linking the major economic centers in the north, 28 km from Hanoi, 73km from Hai Phong, 90 km from Cai Lan Port, 40 km from Noi Bai International Airport, 15km from Lac Dao railway station (Ha Noi – Hai Phong), next to the Hung Yen custom clearance station and Thang Long urban zone.

Planned area:

120.8 hectares. In particular, phase 1: 25.17 hectares, phase 2: 95.6 hectares.

The sector attracting investment project:

Textile and other industries, particularly sectors that need industrial wastewater treatment are preferred.

Industrial zone technical infrastructure:

The industrial zone has been completed the construction of technical infrastructure for the first phase on an area of 25 hectares, including internal industrial zone road system, water supply and drainage systems, power supply, fire protection system, water supply plant with capacity of 8.500m3/day and night, and sewage treatment plant with capacity of 10,000 m3/day and night according to the European standards that have been completed and put into use. Phase 2 has completed the ground clearance the whole area under planning and started implementation of infrastructure construction in an area of approximately 30 hectares of industrial land.

Investment project attraction status:

By the end of the first quarter of 2016, the industrial zone has received 23 investment projects, including 10 domestic investment capital projects and 13 foreign investment capital projects with total registered capital of 1,000 billion VND and 109 million USD. The total subleasing area is 46 hectares, accounting for 49% of industrial land can be leased. A number of projects that have large-scale capital are: Kien Thinh Zhejiang Corporation, Carvico S.P.A Co., Ltd, Linea Aqua (Private) Limited.

Owner of Pho Noi Textile Industrial Park:

Pho Noi Textile Infrastructure Development Joint Stock Company

For more information, please contact ANT Consulting.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

• Market Entry
• Tax Advice
• Legal Advice

We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +848 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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