Will Form New Value Chain in Vietnam - Japan Economic Cooperation

 Japan has truly become a strategic partner of Vietnam. Currently, trade activities between the two countries are being promoted and more and more Japanese businesses choose to set up company in Vietnam.

According to Mr. Hironobu Kitagawa, Chief Representative of the Japan External Trade Organization (JETRO) in Vietnam, it is not just a single sector investment, the integration of industry groups to create new value chains is essential for Vietnam -Japan economic cooperation.

During the recent visit to Japan by Vietnam Prime Minister Nguyen Xuan Phuc, many collaboration memorandum have been signed, as well as 1,600 attendees pointed out that Japanese enterprises pay high attention to the investment in Vietnam. In the eyes of Japanese businesses, Vietnamese market is a continuous growing market. In addition to the second group of industries (manufacturing and processing industries), enterprises will expand into other sectors such as the first industry group (agriculture sector) and the third industry group (service industries).

Japanese side affirmed that they would continue to support Vietnam in implementing the plans of the 6 selected industries in order to accelerate Vietnam's industrialization and modernization process. Basically, direct investment from abroad will boost domestic industry and boost economic growth. Of course, if foreign economic relations accelerate, the ability to create new business opportunities will be greater, while stimulating the domestic consumption market. Therefore, through the receipt of investment from abroad, the building of mutually beneficial relationship is necessary.

Increasing investment from Japan in 6 areas (especially electronics, food processing and car accessories) is the focus for accumulation of supporting industries. This is expected to contribute to the nurturing of Vietnamese enterprises. Moreover, JETRO will continue to contribute to the development of supporting industries in Vietnam by organizing annual supporting industry exhibitions.

Source: https://www.antconsult.vn/news/will-form-new-value-chain-in-vietnam-japan-economic-cooperation.html

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Korean Corporation Builds Aircraft Engine Spare Part Factory in Vietnam

  Hanwha Techwin is seeking opportunity to expand capacity through opening factory abroad and they chose to set up factory in Vietnam.

Hanwha Techwin Corporation from Korea has selected a 10 hectares site on the suburb of Hanoi to build a factory manufacturing aircraft engine spare parts.

The Corporation is now waiting for the Vietnamese Government to approve the project. If licensed, Hanwha Techwin will start construction of the factory in August 2017 and begin operation in the second quarter of 2018. This factory covers an area of 6ha, 8 times more than a regular football field.

In order to implement the plan to raise revenue from aircraft engine spare parts to 900 million USD, Hanwha Techwin is seeking to expand capacity through opening factory abroad. In which, among many areas targeted by Hanwha Techwin, Vietnam was selected for having a suitable logistics environment and high competitive advantage in terms of production costs.

This technology corporation is expanding its engine parts business by winning large contracts from leading global aircraft engine manufacturers such as GE, Pratt & Whitney (P&W) and Rolls-Royce.

Earlier in April 2017, Hanwha Techwin Corporation started construction of Hanwha Techwin Security factory in Que Vo Industrial Park, Bac Ninh province. Phase 1 of this 100-million-USD project will manufacture CCTV camera, storage devices, high technology security surveillance devices.

Source: https://www.antconsult.vn/news/korean-corporation-builds-aircraft-engine-spare-part-factory-in-vietnam.html

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Foreign Investment in Hanoi Increased Strongly

  Foreign direct investment (FDI) into Hanoi is increasing in both quantity and quality. Foreign investors have gradually believed in the decision to set up business in Vietnam.

Unlike many other localities in the country with large FDI projects such as billion-dollar manufacturing complex, Hanoi is much quieter in attracting FDI. But the reality is different. According to the statistics from the Foreign Investment Agency (Ministry of Planning and Investment), up to the end of May 2017, Hanoi still ranked at the 4^th place among provinces attracting the most FDI with over 26.2 billion USD.

If we list the large-scale FDI projects registered in Vietnam since the beginning of 2017, Hanoi can contribute 3 projects, first is Aeon Mall Ha Dong with registered capital of 192.51 million USD. The next is Coca-Cola Vietnam’s 319.8 million USD capital increase project and 72 million USD Park City project.

Last year, a series of FDI projects poured into Hanoi. For example, the project to invest in the purchase and operation of technical system, equipment, technology, software and trading of lottery elective named “Vietlott” (210 million USD); Vietnamobile Company increased its capital (208 million USD); or Vietnam Public Bank project (134 million USD) ...

Not to mention, Hanoi has attracted Samsung's 300 million USD Center for Research and Development (R&D). This proves that the quality of FDI inflows into Hanoi has been improved.

According to information from the Hanoi Department of Planning and Investment, the city is working hard to improve the investment environment to attract more investment capital both at home and abroad. Many solutions have been mentioned, such as facilitating access to land, land use, land for investment and business; improve the efficiency of administration, administrative reform, improve the investment environment; promoting and enhancing the effectiveness of investment promotion activities...

Good news for Hanoi is that the Prime Minister has officially issued a separate Decree allowing the implementation of separate mechanism for the Hoa Lac Hi-Tech Park. For example, allowing investment projects in Hoa Lac Hi-Tech Park to enjoy the highest incentives in accordance with the law of Vietnam, allowing the application of the one-door mechanism, prioritizing the allocation of land funds to develop housing for employees... This is also an opportunity for Hanoi to attract investment in hi-tech sectors, attracting investment from multinational corporations - a priority orientation for FDI attraction identified by Hanoi for many years.

In addition, Hanoi also determines to encourage the development of supporting industries, biotechnology, using modern technology, friendly with the environment; projects in the field of information technology, agricultural development, food safety... And especially, large-scale infrastructure projects.

Without hesitation, Hanoi has frankly expressed the desire that Japanese investors will invest in urban railway projects, investment projects to build bridges spanning the Red River, ring routes, metro lines, underground parking lots, satellite urban areas...

Not only FDI capital, calling for investment in these projects also means that Hanoi also determined to promote investment in the form of public-private partnerships (PPP). In the first 6 months, Hanoi has attracted 24 PPP projects, with a total investment of 32.103 billion USD. A very promising shift, promising that in the coming time, there will be strong waves of investment poured into Hanoi.

Source: https://www.antconsult.vn/news/industry/technology/foreign-investment-in-hanoi-increased-strongly.html

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US Investors Continue Pouring Capital into Vietnam

  Vietnam has become an attractive destination for US investors, up to now, the United States ranks 9th among countries and territories set up company in Vietnam with foreign direct investment.

Dow Chemical, Coca-Cola, Uber... are well-known US companies that deploying expansion investment projects in Vietnam. In addition, such names as Exxon Mobil, Cargill, General Electric, Johnson and Johnson, Pfizer... have become familiar, not only because of the huge capital brought into Vietnam, but also help to increase production capacity, contributing to Vietnam's export growth.

Presently, thanks to the good relationship between the two countries, the investment and business environment in Vietnam has been improved. Many US businesses have signed large contracts with Vietnamese enterprises, concentrating on the fields such as oil and gas, information technology, animal feed and electronics.

According to information from the American Chamber of Commerce in Vietnam (AmCham), many US businesses are working with the authorities to expand their projects in Vietnam.

Meanwhile, the big names that have long presence in Vietnam also urgently deploy expansion plans. Cargill Vietnam Co., Ltd is expanding its operations in Vietnam, in addition to the successful field of animal feed production. It is expected that by the end of this year, Cargill will put into operation a 10 million USD warehouse at Phu My port in Ba Ria - Vung Tau province.

Cargill also plans to work with the Ministry of Transport on investment in the northern port project to expand its range of operations in many investment sectors in Vietnam.

Dow Chemical, a large US chemical company, after more than 20 years of operation in Vietnam, the company is intending to expand its operations in 2017. Dow Chemical is cooperating with many companies in Vietnam in the fields of agricultural chemicals, biotechnology and services. Furthermore, with long-term investment commitments, in addition to raising capital, Dow Chemical is ready to assist Vietnam in developing a national list of chemicals for research and development.

Statistics show that, up to May 2017, US businesses have invested in 834 projects in Vietnam, with total registered capital of 10.2 billion USD, ranked 9/116 countries and territories that have investment projects in Vietnam.

Moreover, according to an AmCham survey of 100 US companies in Vietnam, 72% of respondents said that Vietnam's investment environment was improving, much better than Myanmar, Malaysia, Thailand and Brunei.

US investment capital flows into Vietnam are no longer tied up in some areas of high profitability as before. Presently, some conditional business areas such as casino, entertainment... are expected to attract more capital from US businesses.

For example, Time Warner Inc., the world's leading media and entertainment company, is also looking for direct investment opportunities in Vietnam.

So far, most of the key businesses in Vietnam are having the presence of major US investors, typically oil and gas sector with famous names such as Exxon Mobil and Chevron; Boeing, ADC-HAS Airport in the field of aviation; Information technology with Microsoft, Intel, Apple, HP; Electrical appliances with General Electric, General Atlantis and AES...

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

Source: https://www.antconsult.vn/news/us-investors-continue-pouring-capital-into-vietnam.html

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Vietnam Welcomes Trillion Renewable Energy Projects

  The number of renewable energy projects with total investment capital of about 1,200 - 1,400 billion VND is constantly increasing, confirming that investment in Vietnam renewable energy is an attractive trend.

Recently, the People's Committee of Binh Thuan Province has handed the decision and received commitment to invest in renewable energy of 20 enterprises in order to diversify the form of energy production, step by step achieving the goal of becoming a large national energy center of the country in the next few years.

Currently, Binh Thuan and Ninh Thuan are the two leading provinces in attracting investment in renewable energy because most of the area has an average radiation intensity of about 5 kWh per square meter, less rainfall and hours of sunshine always maintained at an ideal level.

Although the natural conditions are not as favorable as Binh Thuan and Ninh Thuan, some neighboring provinces such as Khanh Hoa, Quang Tri, Binh Dinh... also attract many domestic and foreign enterprises committed to pour capital.

Most recently, Fujiwara (Japan) also received license to invest in solar and wind power plants in Binh Dinh with total capital of 1,446 billion VND. According to the investment registration progress, the project will be implemented right in 2017 and is expected to complete the first phase in the first quarter 2019.

Recently, more and more businesses outside the industry have not hidden their ambition to enter the renewable energy sector. According to Deputy General Director of Bamboo Capital, the company plans to raise 300 million USD through issuing bonds and certificates with rights to buy shares held in period from 2017 to 2020. In which, about 100 million USD will be poured into renewable energy projects.

According to this year's plan, the company will promote the procedure to build a 140 MW solar power plant in Long An province. In addition, the company is seeking investment opportunity in solar power projects in Phu Ninh (Quang Nam) and Ninh Thuan, while taking advantage of international relations to attract capital and experiences from foreign investors.

Furthermore, Bamboo Capital expects to officially sell electricity and record revenue from the energy segment by 2018. By 2020, this segment will be able to deliver significant revenue streams to the company.

Explaining the fact that businesses are racing to plan, commit to invest and directly invest in renewable energy sector, the Renewable Energy Center (under The Energy Institute) thinks that it comes from many factors. First of all, the demand for energy is rising, while the supply of fossil fuels is becoming more expensive and exhausting.

In addition, the technology enters the ripe stage, making business easier to access, while reducing the difference in levelized cost of electricity (LCOE) compared to thermal power. A few years ago, the cost of producing wind electricity was about 3,500 VND per kWh and now it drops to 2,200 - 2,500 VND.

Moreover, the incentive mechanism for the development of solar power projects issued in April this year has also influenced the investment decisions of enterprises. Currently, the purchase price of electricity at the power point is 2,086 VND (equivalent to 9.35 cents/kWh).

In addition, investors are also entitled to many tax incentives such as import tax exemption for imported goods to create fixed assets, exempt from land use fees, land rent, water surface rent at the construction location, lines, substations connected to the grid. In the short term, it is likely that the Government of Vietnam will also consider increasing wind power prices to assist businesses, boosting investment to achieve a total capacity of 6,000 MW by 2030.

Source: https://www.antconsult.vn/news/vietnam-welcomes-trillion-renewable-energy-projects.html

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Taste of US investors in Investment in Vietnam

  Renewable energy, high technology industries, supporting industries... are areas that are interested by US investors when they come to set up company in Vietnam.

One of the "hot" issues that US businesses and investors interested in is the issue of cooperation and investment in the field of renewable energy. According to Mr Freb Burke from Baker & McKenzie, renewable energy is currently the most attractive investment area. Vietnam will avoid the construction of thermal power plants when moving to invest in wind and solar power plants.

In addition, many multinational corporations have strict environmental standards and they want these standards to be applied globally. Manufacturers also want to produce consumer goods using clean energy. For example, Apple is making a commitment to achieve 100% clean energy in their global supply chain. Hence, if Vietnam wants to attract investors like Apple, Vietnam should produce enough renewable energy to meet their needs.

According to Mr Burke's explanation, renewable energy secures energy and environment security for Vietnam, helping Vietnam tap its potential and export energy. Renewable power plants attract the interest of US businesses like First Solar and GE. Furthermore, Vietnam has just raised its electricity purchase price to 9.35 UScent per kWh. This is a relatively attractive price for foreign investors due to the reduction in the price of wind and solar power along with the development of technology. However, Vietnam needs long-term guarantees for investors to borrow from banks and invest.

Moreover, the American Chamber of Commerce in Vietnam (AmCham) stated that the Association and its partners are proposing a Production Energy Plan in Vietnam to provide a needed road map for reforms, in order to attract investors, equipment suppliers, manufacturers and operators from the United States.

In addition, many US investors have also expressed their interest in intelligent cities, waste treatment projects, high-tech industries... Many businesses say that despite the United States withdrawal from the TPP agreement, trade relations between Vietnam and United States will continue to develop strongly in the future.

In fact, in recent times, high technology and supporting industries have attracted more projects of US investors. According to the owner of Saigon Silicon Project, after the construction of the project in Saigon Hi-Tech Park in the second half of 2016, up to now, many US investors have expressed their plan to implement projects here. It is planned that after completion of the infrastructure, the project can attract about 20 projects operating in the field of high tech and supporting industries, with investment capital of about 1.5 billion USD.

Meanwhile, a group of US scientists and businesses have recently reached an initial agreement on implementing a smart glass production project in Long An province with a billion dollar investment capital. This is a high-tech manufacturing project and about 90% of the output will be exported.

According to businesses, the results of investment attraction is not worth the potential of the two countries. Currently, the United States ranks 9th among foreign investors in Vietnam, with an investment of about 10 billion USD according to registered statistics from the United States. However, if we count the investment from the United States through third countries, the investment capital must be greater, for example, the Intel project has investment of more than 1 billion USD, but the investment capital is registered from the enterprise based in Netherlands.

Another good news is that, during the US visit of Vietnam Prime Minister Nguyen Xuan Phuc at the end of May 2017, US and Vietnamese businesses have signed contracts worth tens of billions of dollars in many fields. Therefore, according to businesses, if the bottlenecks, especially the regulatory and framework issues on investment are improved, the flow of investment from the United States is likely to increase in the coming time.

Source: https://www.antconsult.vn/news/taste-of-us-investors.html

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US Investors Have Poured 1.1 Billion USD into Ho Tram Strip Project

  Asian Coast Development Ltd is one of the large US investor who come and set up company in Vietnam.

Ho Tram Project Company (HTP) is a wholly foreign-owned subsidiary of Asian Coast Development Ltd, with more than 1 billion USD of committed capital deployed, which is the largest US private company investing in Vietnam. Moreover, they are also the first company to register for Vietnamese to play casino.

According to HTP – the investor of the 4-billion-dollar-super-project named “Ho Tram Strip”, the Company has poured 1.1 billion USD in this project and they has just announced to continue to fund the phase 3 includes apartment tower, condotel and villa.

Located on the north side of The Grand Ho Tram Strip resort, the 12-story Kahuna Ho Tram Strip project has a total of 244 rooms. It consists of 164 one or two-bedroom apartments, 9 penthouse apartments and 44 luxury villas located on the beach with area of 218 to 223 square meters.

According to the developer, this project when completed will contribute to the diversification of facilities and realize the goal of turning Ho Tram into the entertainment capital of Vietnam. In addition, HTP has developed the Gallery Villa apartment project at the nearby The Bluffs golf course. The 2^nd hotel tower with 559 rooms named “The Beach Club” is now rushing to complete to welcome its first guests in early 2018. Furthermore, other service facilities such as water park, outdoor theater and private international airport are also underway.

It is known that the price of condotel apartment in Ho Tram is from 2 billion VND (equivalent to about 88,800 USD), villa is priced from 8 billion VND (about 350,000 USD). The project was designed by leading architectural firm Korn Architects and is due to commence in quarter 4 of 2017.

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