While economists bemoan the fall off in large-scale foreign invested projects so far this year, there is cause for optimism as Vietnam has seen a wave of small-scale foreign invested projects in electronics supporting industries.
In late May, a delegation from South Korea's JNTC led by Jang Sang-Wook visited the northern province of Vinh Phuc to study investment opportunities in an optical glass production plant there. The 6-hectare facility will have the initial investment capital of $50 million.
JNTC, one of the leading producers of spare parts for Samsung in South Korea, is targeting Samsung's two mobile manufacturing complexes in the northern provinces of Thai Nguyen and Bac Ninh. With the total investment capital of $7.5 billion, the two complexes supply 35 per cent of Samsung's total capacity of mobile spare parts, globally.
While JNTC has yet to confirm its final decision after the visit, Vina Anydo Electronics, another South Korean company, has chosen Vinh Phuc to build its plant for mobile spare parts and electronic devices for Samsung. With a modest cost and size of just $700,000, 2,000 square metres, respectively, the Vina Anydo Electronics plant in the province's Binh Xuyen Industrial Zone is expected to generate an annual revenue of $16.5 million, and create jobs for more than 250 local residents, with an average monthly salary of $200-300 once it is put into operation in August 2015.
In May 2015, the northern province of Bac Giang granted a number of investment certificates to small foreign invested projects in the supporting industries. They included Mooroc Printec Vina's $2 million factory, Wonjin Vina's $10 million project, and Fine Eleccom Vina's $500,000 project.
Meanwhile on May 27, the Haiphong Municipal Economic Zones Management Authority (HEZA) granted an investment certificate to South Korea's Eujin Winsys Co., Ltd to build a plant for the production of electronic devices with the total investment capital of $100 million.
All the investors of these projects plan to begin operations within six months to one year of starting construction to meet the rising demand for electronics spare parts of Samsung, Microsoft, and LG. These projects will not only help increase foreign direct investment (FDI) inflows to the country, they will also help lay a solid foundation for the nation's supporting industries in the electronics sector. This trend shows that Vietnam has become a magnet for satellite electronics investors following the entrance of giant electronics groups in the country.
Le Hoai Quoc, director of the Saigon Hi-tech Park Management Board, said that after Samsung broke ground on its $1.4 billion consumer electronics complex, many domestic and foreign investors expressed an interest in becoming suppliers of electronics devices for this project. As planned, Samsung will choose the most suitable candidate companies by end-2015.
"Once our supporting industries are developed, they will not only help increase the attractiveness of the local business environment, but also contribute to increasing the added value of the national economy towards sustainable development and global integration," emphasised Do Nhat Hoang, director of the Ministry of Planning and Investment's Foreign Investment Agency.
Ha Nguyen - VIR
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