Series of Big Technology Companies Shifted Production to Vietnam | ANT Consulting

LG, Panasonic or Foxconn – Apple suppliers… are planning to set up factory in Vietnam to expand investment, production chains in Vietnam after Covid-19. 

According to a 6-month industrial production report by the Ministry of Industry and Trade, some of the world’s big technology corporations are planning to shift production and investment chains to Vietnam. Vietnam is facing a great opportunity to welcome this wave of investment.     

Among the big names mentioned by the Ministry include: LG, Panasonic, Foxconn – Apple component suppliers… Among that, LG had transferred the entire production line from Korea to Hai Phong. 

In addition to LG, according to the Ministry of Industry and Trade, Panasonic Vietnam is also preparing to receive a production line of refrigerators and vertical door washing machines with high capacity from Thailand, in early September. Apple has also increased production of 3 – 4 million of AirPods in the second quarter, equivalent to nearly one third of its AirPods worldwide output through Foxconn. 

Currently, Foxconn has a factory located in Bac Giang and proposed the Government to build 3 social housing projects in the Northern of Vietnam, next to its industrial parks with a total investment of over 7,400 billion VND. 

Three Foxconn social housing projects are planned to be built in Bac Ninh, Bac Giang and Vinh Phuc. In particular, the project in Viet Yen district, Bac Giang province has the largest scale with 16.7 hectares, with an investment of 3,422 billion VND (about 150 million USD). The other two projects in Que Vo district, Bac Ninh province – scale 6.3 ha, invested 2,925 billion VND (more than 125 million USD) and in Vinh Phuc – scale 9.9 ha, invested more than 1,000 billion VND. 

Vietnam’s disease control is highly regarded by the international community and is an important driving force to attract more foreign investment after Covid-19. The capital investment and expansion of production chains of multinational corporations in the electronics sector have helped the industry record a good growth in the first half of the year, though affected by the disease. 

According to the Ministry of Industry and Trade, the index of industrial production of electronic products, computers and optical products in June increased by 29.3% over May and by 21.7% over the same period last year. 

In the first half of the year, production of this industry increased by nearly 10% over the same period, 6% higher than the first 6 months of 2019. 

In terms of export value, computers, electronic products and components reached nearly 19.3 billion USD, increase by over 24%; phones and accessories of about 21.5 billion USD. It is expected that in the last 6 months of the year, the electronics industry will still be greatly affected by the complicated disease situation which is likely to reduce the demand for electronic products in the US and European markets. 

Samsung’s global sales and output are forecast to decline due to the overall impact of the epidemic on electronics in general. Samsung Vietnam is also expected to reduce its export target to about 45.5 billion USD in 2020, compared with 51.4 billion USD in 2019.

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Millenium Oil and Gas Corporation Applied to Invest 15 Billion USD in Khanh Hoa | ANT Consulting

Millennium Oil and Gas Corporation (USA) proposed to invest in Vietnam energy sector with a liquefied gas power project in Nam Van Phong area, Khanh Hoa with a total investment of up to 15 billion USD.      

After studying, Chairman of Millenium Vietnam Company (a member of Millenium Petroleum Group), if approved, they will invest in this project with a scale of 600ha, total investment capital of 15 billion USD, capacity of the power plant is 9,600MW. 

In addition, Millenium Oil and Gas Group will invest in a port system to supply gas to power plants and LNG distribution agents for the whole of Southeast Asia. The location chosen by the investor is in My Giang village, Ninh Phuoc commune or maybe in Ninh Hai ward, Ninh Hoa town. 

If the Khanh Hoa Provincial People’s Committee agrees to permit the investment, the project will be guaranteed by the US Government and will work with the Government of Vietnam to implement. The group hopes to turn the LNG terminal in southern Van Phong into the energy hub of Southeast Asia. Because Millenium is a corporation specializing in oil exploitation, it will sell gas directly to consumers without intermediaries, this is an advantage. 

According to the Chairman of Khanh Hoa Provincial People’s Committee, the area of investors applying for investment in the power plant and LNG storage is totally consistent with the local development orientation. 

It is known that Millenium Petroleum has 35 years of experience in implementing advanced power projects from natural gas, liquefied natural gas, wind, solar, geothermal and waste. 

The Group has implemented power projects in the US and countries around the world with a total investment of more than 36 billion USD. At the same time, the group is also the unit that holds many of the world’s leading advanced technologies and techniques, many of which are not available to other businesses.

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The Energy Sector Welcomes New FDI Inflows | ANT Consulting

The Politburo’s Resolution 55-NQ/TW in 2020 creates great hope for business expansion for FDI enterprises providing complete equipment, technology and solutions for Vietnam energy market. 

According to Wärtsilä Vietnam Country Director, Resolution 55-NQ/TW aims to develop synchronously and reasonably, diversify types of energy, prioritizing the exploitation and use of all renewable energy sources, new energy, clean energy. This is the core business of Wärtsilä (from Finland, specializing in the development of sustainable and closed solutions for the energy market) for the past 184 years.      

In the Vietnamese market, Wärtsilä is doing strong marketing with the hope of increasing sales by providing technology for power projects. Wärtsilä’s energy business is leading the transition towards a future using 100% renewable energy. Wärtsilä offers flexible power plants, energy management and storage systems, as well as closed services to increase effectiveness and ensure efficiency. 

With the push of the Government, in recent years, renewable energy has developed extremely strong in Vietnam and this is a very good opportunity to invest in the energy sector in Vietnam. 

Another supplier – Fortum Power and Heat OY Finland is also looking forward to the coming of Resolution 55-NQ/TW to come to life soon. This business provides technology to minimize harmful thermal power emissions, mixed energy system development solutions in many markets around the globe. 

Fortum’s hydropower plant efficiency enhancement technology will enable efficient hydropower plant operation, minimizing overhaul and plant downtime. With coal-fired power, Fortum’s technology allows to replace up to 40% of the required amount of coal in coal-fired thermal power plants… This is what is being considered in Vietnam energy development process. 

With the national electricity demand growth rate for the 2016 – 2020 period of 10.6% and 8.5% for the period of 2021 – 2025 and 7% in the period of 2026 – 2030, Vietnam becomes an attractive market for domestic energy investors and foreign direct investment (FDI) enterprises. Accordingly, Vietnam needs to mobilize an additional 5,000 MW from now to 2025, which means that each year, it needs to pour an additional of 7 – 10 billion USD to invest in power projects. 

There have been new moves to welcome FDI inflows into energy. Recently, the US Millennium Company has been allowed by the Management Board of Van Phong Economic Zone (Khanh Hoa) to survey and research projects in the Van Phong area to study the feasibility of the gas-power project complex. 

According to Millennium, the LNG Center Project (over 10 million m3) and the Power Plant (capacity of 4,800 MW) has a total initial investment capital of 8 billion USD. In the future, the Company will increase the capacity of the power plant to 9,600 MW and the warehouse to 15 million m3, with an investment of 15 billion USD. Secretary of Khanh Hoa Provincial Party Committee affirmed that the idea of implementing the LNG Center and Power Plant Project of Millennium Company is suitable with the potential and orientation of industrial development in this area. 

Previously, at the Vietnam Energy Summit 2020, a series of cooperation in the implementation of energy projects was signed. Typically, Copenhagen Infrastructure Partners (CIP – Denmark) and Binh Thuan province have signed a Memorandum of Understanding for the development of La Gam offshore wind power project with a total capacity of up to 3.5 GW, with an investment of 10 billion USD. This is one of the first large-scale offshore wind power projects in Vietnam, as a prerequisite for attracting other foreign investors to offshore wind power projects. 

CIP is a pioneer in the offshore wind power industry in the Asia – Pacific, including projects in Vietnam, Taiwan, Korea, Japan and Australia. CIP operates 7 funds with more than 10 billion USD in committed capital. Funds have implemented more than 20 portfolios in energy infrastructure, with a total capacity of nearly 8 GW in the United States, UK, Germany, Spain and Taiwan. The funds also have more than 15 energy infrastructure projects that are in the process of preparing final investment decisions and are expected to commence within the next 2 – 3 years. 

According to the founding member of CIP, with the project in Binh Thuan, CIP commits to continue to cooperate with local partners to turn this project into a model of a successful technology transfer project in parallel with making maximum use of local resources and expertise.

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Processing and Manufacturing Industry Attracts Foreign Capital | ANT Consulting

Background Check Service in Vietnam

Although the amount of registered and disbursed FDI capital was lower than the same period in 2019 due to the influence of Covid-19, the reduction has been significantly improved. 

The latest report of the Foreign Investment Department (Ministry of Planning and Investment) shows that, as of November 20th 2020, the total newly registered capital, adjusted and contributed capital to buy shares of foreign investors reached 26.43 billion USD, equaling 83.1% compared to the same period in 2019. The realized capital of foreign direct investment projects was estimated at 17.2 billion USD, equaling 97.6% compared to the same period in 2019. 

Also according to the report, the processing and manufacturing industry is still the field attracting foreign capital, when there are 12.7 billion USD invested in this field, accounting for 48.2% of total registered investment capital. The field of electricity production and distribution ranked second with total investment capital of over 4.9 billion USD, accounting for 18.7% of total registered investment capital. Followed by the real estate business, wholesale and retail with a total registered capital of nearly 3.8 billion USD and 1.5 billion USD. 

In terms of investment partners, Singapore is leading with a total investment of nearly 8.1 billion USD, accounting for 30.6% of total investment in Vietnam; Korea ranked second with a total investment of 3.7 billion USD, accounting for 14% of total investment capital. China ranked third, with a total registered investment capital of 2.4 billion USD, accounting for 9.1% of total investment capital. Followed by Japan, Taiwan, Thailand… 

In terms of the number of new projects, Korea ranked first (573 projects); China ranked second (311 projects); Japan ranked third (251 projects); Hong Kong ranked fourth (164 projects)… 

Commenting on the foreign investment situation, the Foreign Investment Department assessed that, due to the impact of the Covid-19 pandemic, production and business activities were affected, the implemented investment capital of foreign investment projects in 11 months, although decreasing compared to the same period in 2019, but the decrease rate has improved. Many FDI enterprises are gradually recovering, maintaining good production and business activities, creating momentum for faster growth in the last months of 2020. 

Considering the strong decline in global investment due to the effects of the Covid-19 pandemic, this result is better than many other countries, demonstrating Vietnam’s attractiveness in the eyes of international investors. 

The Foreign Investment Department forecasts that there are still many foreign investors who are interested, confident and want to invest in Vietnam. But due to the influence of Covid-19, the movement of investors, as well as new investment decisions and the expansion of the scale of foreign investment projects, continue to be affected.

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Complete 1st Stage of the Information Technology Zone in Danang

On January 6th 2020, the Prime Minister issued Decision no.27/QD-TTg on establishing the information technology zone in Danang – Stage 1, effective from January 6th 2020. Specifically, the Danang information technology (IT) zone – Stage 1 has an area of 131 hectares, located in Hoa Lien commune, Hoa Vang district, Danang city.

The Ministry of Information and Communications shall assume the prime responsibility and coordinate with the ministries, branches, Danang People’s Committee and concerned units in guiding the implementation of the decision; The Ministry of Planning and Investment was assigned to assume the prime responsibility for, and coordinate with the Ministry of Finance and the Ministry of Information and Communications in, balancing the allocation of investment capital to support investment in and construction of infrastructure of Danang centralized IT Park according to law provisions.

Besides, the People’s Committee of Danang has 5 tasks including approving the organizational structure and operational regulations of the Danang central IT Management Group, then performing the state management function for the investment projects in the centralized IT zone, and prioritizing the allocation of development investment capital from the state budget for investment in infrastructure development connecting to Danang centralized IT Park – phase 1 and non-business social infrastructures in the area. Therefore, develop the plans and synchronously deploy solutions to attract foreign corporations and large domestic enterprises in the fields of IT, electronics and telecommunications to invest in Danang centralized IT Zone and set up company, apply for investment registration certificates. Finally, directing and organizing the levels of local governments and functional agencies of Danang city in cooperation with Danang IT Park development joint stock company to implement the construction, management to IT zone focus on Danang to develop in the fast and sustainable way.

Danang IT Park is entitled to preferential policies for centralized IT zone as stipulated in the Article 22 Decree no.154/2013/ND-CP to attract the investors to invest and set up business in Da Nang IP park, such as: Preferential corporate income tax for 15 years with tax exemption policy for the first 4 years, 5% for the next 9 years, 10% for the next 2 years and tax incentives after 15 years of operation is 20-22%. Moreover, exemption of import tax for imported goods to create fixed assets, raw materials, machinery and equipment that cannot be domestically produced to serve the production of IT products and IT services of enterprises; 50% reduction of taxable personal income tax on income from salaries and wages of high-tech human resources working in IT. In addition, site clearance and infrastructure investment in Danang IT Park- stage 1 will be supported by government and local budgets in accordance with the law, master plan on development of centralized information technology zone approved by the Government. The Danang IT Park – stage 1 will also receive investment credit loans at Vietnam Development Bank for investment.

In the future, domestic and international investors need to update the progress when making investment in the IT sector as well as seizing the investment opportunity, to be able to enjoy the best incentives that Danang set for IT sector in the city with aim to develop a green city to attract the investment that need talents in IT.

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