Hanoi has attracted nearly 2.53 billion USD in FDI during the first nine months of 2023. (Photo: VNA)

On September 22, three months after the signing of a comprehensive business agreement in Seoul city of South Korea on eco-friendly, high-tech material between SKC Group and Haiphong People’s Committee, the group’s representatives were present in the northern port city to receive an investment registration certificate for $500 million.

South Korea’s second-largest conglomerate will start construction of the first phase of the project in mid-December and complete construction within nine months.

Woncheol Park, CEO of SKC Group which is part of SK Corporation, said, “We have invested around $3 billion in Vietnam over five years. Haiphong is a city with modern infrastructure and good investment attraction mechanisms, which is why we decided to invest here.”

The company has fulfilled the commitment signed with the city in June, and it will continue to call for more South Korean businesses to invest in Haiphong. The project was one of 14 that Haiphong Economic Zones Management Authority granted investment certificates to on the same day, with a total registered capital sum of nearly $1.3 billion.

SK Group is also investing in a wide range of sectors in Vietnam via the in-paid capital method with a total investment of around $3 billion, such as a deal with Vingroup, Masan, Imexpharm, and PV Oil.

Moreover, Acuity Funding will provide Tin Thanh Group, a pioneer in renewable energy in Vietnam, with $1 billion in credit for the construction of four biomass power plants and thousands of hectares for sorghum cultivation in the southern and central regions of Vietnam (see Page 19).

In recent months, management authorities of industrial and economic zones in Bac Giang, Nghe An, and Bac Ninh have granted approval for dozens of projects worth hundreds of millions of US dollars each. For example, the management authority of an industrial zone in the central province of Nghe An granted investment certificates to nine foreign-invested projects worth over $778 million. The province also approved additional capital for six projects totalling $110 million, bringing newly registered and additional capital to $888 million in August, an on-year increase of over 160 per cent. In addition, the management authority of Dong Nam Nghe An Economic Zone released information that the province is preparing to license two foreign-invested projects with the total registered capital of $153 million.

Nguyen Van Toan, vice chairman of the Vietnam Association of Foreign-Invested Enterprises, said, “These positive statistics are the result of the very long process with the involvement of the political system from the government to the locality via upgrading the bilateral relationship between Vietnam and other countries and the investment promotion programmes abroad.”

For example, in late 2022, Vietnam and South Korea elevated their bilateral relationship to a comprehensive strategic level. In addition, Vietnam and the United States have also decided to uplift their relations to a comprehensive strategic partnership.

“Furthermore, Vietnam is also active in participating in economic forums and associations in the region and all over the world. At these events, the Vietnamese leaders have called foreign investors to invest in Vietnam in collaboration with private meetings with large corporations. On these trips, many agreements and investment certificates are signed. They are the premise for the current billion-dollar projects in recent months,” he added.

According to Thierry Mermet, CEO at Source of Asia, a consultant to companies looking for business opportunities in Vietnam and ASEAN, the whole 2023 outlook for the business environment in Vietnam shows signs of improvement.

“In the long term, Vietnam is strengthening its position as one of the top three locations where European business leaders want to invest. According to the Business Confidence Index report conducted by the European Chamber of Commerce in Vietnam, 3 per cent more leaders have picked Vietnam as one of their top three investment choices,” Mermet said.

Do Van Su, deputy director of the Foreign Investment Agency under the Ministry of Planning and Investment, optimistically predicted that foreign investment into Vietnam will likely reach $36-38 billion in 2023.

“This is largely thanks to a new flow of Chinese investment capital, which was previously hampered by the country’s pandemic restrictions. The electrical and electronics manufacturing sector is expected to be the largest beneficiary as global technology giants such as Samsung, LG, and Foxconn continue to diversify their production lines,” Su said.