Production in R Technical Research Vietnam Company, a Japanese company in Hoa Binh City. (Photo: SGGP)
Huge projects
Of the above registered FDI capital, there were more than $15.2 billion of newly registered capital of 1,738 projects, up 4.1 percent; about $9 billion of additional registered capital, up 40.5 percent over the same period; nearly $6.9 billion of investment capital through capital contribution and share purchase from foreign investors. Along with the adoption of new normal policies, the economy has been warming up. LEGO Group, on December 8, 2021, announced an investment decision of a factory worth more than $1 billion in VSIP Industrial Park in Binh Duong Province. Meanwhile, despite being heavily affected by the Covid-19 pandemic, the total foreign investment capital into Ho Chi Minh City was estimated to only decrease by about 10 percent year-on-year. More specifically, newly-registered and additional capital continued to maintain an impressive level over the same period. In which, many billion-dollar projects had been granted licenses, making a significant contribution to maintaining capital growth momentum. The Long An LNG Power Plant Project I and II by a Singaporean investor expected to start operation in December 2025 topped the list with a total registered capital of over $3.1 billion. The construction and operation of this project is considered an important turning point in the process of promoting the strong development of the Mekong Delta.
The LG Display Hai Phong Project by a Korean investor was the runner-up with two capital adjustments. In total, the project increased investment capital by $2.15 billion, of which, it added $750 million on February 4, 2021, and $1.4 billion on August 30, 2021. LG Display Hai Phong specializes in manufacturing plastic OLED screens for mobile devices, OLED TV screens, and LCD screens. In recent years, LG Display has continuously supplemented investment capital and expanded production scale, becoming the largest FDI project in Hai Phong City. After the new production line is completed, LG Display's export revenue is expected to increase by about $6.5 billion per year. The company is expected to contribute an additional $25 million to the State budget and create more jobs for 10,000 workers.
Another project was O Mon II Thermal Power Plant Project by a Japanese investor with a total registered capital of over $1.31 billion, which aims to meet the electricity supply demand for the regional power grid and the national power system in Can Tho City. The O Mon II project is expected to apply advanced combined cycle gas turbine technology, using clean fuel with high efficiency, environmental friendliness, and in line with the current trend of sustainable development.
In addition, two other large investment projects also significantly contributed to changing the investment landscape, namely the Kraft Vina Paper Mill Project with a total investment of $611.4 million and the Polytex Far Eastern Vietnam Company by a Taiwanese investor, which adjusted to increase the investment capital by $610 million.
Fortifying confidence
Nevertheless, besides the bright side of newly-registered and additional capital, the capital contribution and share purchase fell sharply, largely because the global M&A market was affected by the Covid-19 pandemic. However, more noticeably, disbursed investment capital also dropped, clearly indicating a decline in the health of the economy due to the impacts of the pandemic domestically and abroad. However, Prof. Dr. Nguyen Mai, Chairman of the Vietnam Association of Foreign Investment Enterprises, still affirmed that Vietnam is an attractive market for investors. A convincing proof is that the stock market had grown spectacularly in 2021 with the VN-Index reaching approximately 1,500 points. Compared to the beginning of last year, the market capitalization more than doubled. The domestic consumer goods market and the means of production were also quite large.
More importantly, over the past time, the Government has shown to be steadfast in maintaining six policy pillars that comprehensively cover all fields of the economy. It is to restore the supply chain, ensure the circulation of goods; support businesses and people to accelerate production and business activities; drastically implement large-scale investment programs; step up removing difficulties for enterprises, including FDI enterprises in Vietnam; improve institutional quality; develop human resource. The vaccination with two doses of the Covid-19 vaccines for people over 18 years old has helped workers feel assured to return to work, and industrial parks have restarted production. This is a premise for foreign investors to be more confident when coming to Vietnam. In fact, the dynamic and active diplomacy of the leaders of the Party and the State over the past time has also contributed significantly to strengthening the confidence of large enterprises in the world to invest in Vietnam, especially in fields, such as renewable energy, infrastructure, processing industry with advanced technology that Vietnam needs to develop. Therefore, a bright picture of the foreign investment in 2022 is not baseless.
Of the above registered FDI capital, there were more than $15.2 billion of newly registered capital of 1,738 projects, up 4.1 percent; about $9 billion of additional registered capital, up 40.5 percent over the same period; nearly $6.9 billion of investment capital through capital contribution and share purchase from foreign investors. Along with the adoption of new normal policies, the economy has been warming up. LEGO Group, on December 8, 2021, announced an investment decision of a factory worth more than $1 billion in VSIP Industrial Park in Binh Duong Province. Meanwhile, despite being heavily affected by the Covid-19 pandemic, the total foreign investment capital into Ho Chi Minh City was estimated to only decrease by about 10 percent year-on-year. More specifically, newly-registered and additional capital continued to maintain an impressive level over the same period. In which, many billion-dollar projects had been granted licenses, making a significant contribution to maintaining capital growth momentum. The Long An LNG Power Plant Project I and II by a Singaporean investor expected to start operation in December 2025 topped the list with a total registered capital of over $3.1 billion. The construction and operation of this project is considered an important turning point in the process of promoting the strong development of the Mekong Delta.
The LG Display Hai Phong Project by a Korean investor was the runner-up with two capital adjustments. In total, the project increased investment capital by $2.15 billion, of which, it added $750 million on February 4, 2021, and $1.4 billion on August 30, 2021. LG Display Hai Phong specializes in manufacturing plastic OLED screens for mobile devices, OLED TV screens, and LCD screens. In recent years, LG Display has continuously supplemented investment capital and expanded production scale, becoming the largest FDI project in Hai Phong City. After the new production line is completed, LG Display's export revenue is expected to increase by about $6.5 billion per year. The company is expected to contribute an additional $25 million to the State budget and create more jobs for 10,000 workers.
Another project was O Mon II Thermal Power Plant Project by a Japanese investor with a total registered capital of over $1.31 billion, which aims to meet the electricity supply demand for the regional power grid and the national power system in Can Tho City. The O Mon II project is expected to apply advanced combined cycle gas turbine technology, using clean fuel with high efficiency, environmental friendliness, and in line with the current trend of sustainable development.
In addition, two other large investment projects also significantly contributed to changing the investment landscape, namely the Kraft Vina Paper Mill Project with a total investment of $611.4 million and the Polytex Far Eastern Vietnam Company by a Taiwanese investor, which adjusted to increase the investment capital by $610 million.
Fortifying confidence
Nevertheless, besides the bright side of newly-registered and additional capital, the capital contribution and share purchase fell sharply, largely because the global M&A market was affected by the Covid-19 pandemic. However, more noticeably, disbursed investment capital also dropped, clearly indicating a decline in the health of the economy due to the impacts of the pandemic domestically and abroad. However, Prof. Dr. Nguyen Mai, Chairman of the Vietnam Association of Foreign Investment Enterprises, still affirmed that Vietnam is an attractive market for investors. A convincing proof is that the stock market had grown spectacularly in 2021 with the VN-Index reaching approximately 1,500 points. Compared to the beginning of last year, the market capitalization more than doubled. The domestic consumer goods market and the means of production were also quite large.
More importantly, over the past time, the Government has shown to be steadfast in maintaining six policy pillars that comprehensively cover all fields of the economy. It is to restore the supply chain, ensure the circulation of goods; support businesses and people to accelerate production and business activities; drastically implement large-scale investment programs; step up removing difficulties for enterprises, including FDI enterprises in Vietnam; improve institutional quality; develop human resource. The vaccination with two doses of the Covid-19 vaccines for people over 18 years old has helped workers feel assured to return to work, and industrial parks have restarted production. This is a premise for foreign investors to be more confident when coming to Vietnam. In fact, the dynamic and active diplomacy of the leaders of the Party and the State over the past time has also contributed significantly to strengthening the confidence of large enterprises in the world to invest in Vietnam, especially in fields, such as renewable energy, infrastructure, processing industry with advanced technology that Vietnam needs to develop. Therefore, a bright picture of the foreign investment in 2022 is not baseless.
