Many foreign-invested enterprises (FIEs) will continue to pour capital into Vietnam as they see negative impacts caused by Covid-19 as only short-term difficulties.

Many foreign investors intend to increase more capital in Vietnam. Photo: ABB Vietnam

Nguyen Thi Bich Ngoc, Deputy Minister of Planning and Investment, shared her view at the seminar themed “Covid-19 and FDI: impacts and prospects” held on September 27. She said that many foreign investors have confidence in the business environment in Vietnam. 

Ngoc said the total newly-registered capital, adjusted capital contribution and share purchase of foreign investors in Vietnam as of September 20 increased by 4.4% over the same period in 2020. 

ADB Country Director Andrew Jeffries said that Vietnam remains an attractive destination for foreign direct investment and continues to benefit from a changing global supply chain, US-China trade tensions, and production disruptions in other regions.

In response to the recent rumor about FIEs are gradually moving out of Vietnam, the ADB leader said the information was incorrect. There were only some orders that have been transferred somewhere.

At the seminar, the Swiss food and beverage company Nestlé announced an investment of $132 million to build a new instant coffee factory in the southern province of Dong Nai in the next two years. “Vietnam is a production center in Asia and Oceania,” Binu Jacob, General Director of Nestlé Vietnam said.

The business executive also mentioned the increasing production costs when implementing “three on the spot” and the supply chain disruption because of strict disease prevention measures. However, he believed this was only a short-term situation. 

Vietnam is now recognized as the leading production base of this group worldwide as it is home to six factories in the southern provinces of Dong Nai and Long An, and the northern province of Hung Yen. 

The new investment will help it increase production and create new products to meet the demand of Asia and Oceania markets, according to the investor. The newly-built factory in Dong Nai will become the largest coffee exporter in the world, said Jacob.

Another foreign investor, the tech giant Samsung stated its investment strategy has been unchanged. 

Speaking at the seminar, Choi Joo Ho, General Director of Samsung Vietnam said the $220-million research & development center in Hanoi is under construction and expected to be inaugurated by the end of 2022.

Ho added if previously Samsung invested mainly in production lines, from now on, the South Korean group will raise its business position in Vietnam to a new level - becoming a strategic research and development base globally.

The company also continues to expand production and invest in equipment in its six current factories in Vietnam.

The leader of the company said they have received support from the Vietnamese Government and local administrations when Covid-19 broke out for the fourth time. The implementation of three on-site has helped their factories in the south remain operational. So far, the company has disbursed all approved investment capital. 

Tetra Pak, a company from Sweden, will pump $5.8 million to expand its existing $140.3-million paper box factory in the southern province of Binh Duong. “This investment demonstrates our confidence in Vietnam's recovery after Covid-19,” said Eliseo Barcas, General Director of Tetra Pak Vietnam. 

 LG, the South Korean investor, recently, poured another $1.4 billion into the northern port city of Haiphong, bringing the total investment capital in this locality to $4.65 billion.

According to the Foreign Investment Agency, more than 1,200 new projects with total registered capital of $12.5 billion have been approved since early this year, down 37.8% in the number of projects but up 20.6% in capital year-on-year. Nearly 700 projects of which have been added with $6.4 billion, falling 15% in number but rising by 25.6% in the capital. 

During this period, 2,830 existing projects had nearly $3.2 billion in capital contributed by foreign investors, which were down 45.3% in a number of projects and 43.8% in value year-on-year.