FDI capital transferred to manufacturing and processing

CA - A new trend has appeared in foreign direct investment (FDI): most FDI capital is now pouring into manufacturing and processing industries instead of real estate.

According to Foreign Investment Agency Head Do Nhat Hoang, one of the most outstanding features of FDI in the first five months of 2010 is its high disbursement rate: $4.5 billion was disbursed, or $900 million a month.

Projects in processing and manufacturing industries attracted most of the FDI. An estimated 127 projects were licensed with investment capital of $2.55 billion, accounting for nearly 34 percent of total investment capital for the first five months. These include mammoth investment projects like the Mong Duong power plant in Quang Ninh province, capitalized at $2.1 billion, a steel mill project in Nghe An with investment capital of one billion dollars and another steel project in Ba Ria – Vung Tau with investment capital of $620 million.

The production sector has proven to be the second most attractive field for foreign investors, garnering $2.2 billion in the first five months of the year. The real estate sector, once the hottest investment field, now ranks third among FDI investment fields, with nearly $1.3 billion in registered capital.

On June 11, leaders of many US companies operating in the fields of infrastructure, healthcare, information technology, education and energy, arrived in HCM City to seek investment opportunities. These fields are ones in which Vietnam in general, and HCM City in particular, encourage investment.

According to the Ministry of Planning and Investment, foreign-invested companies made significant contributions to the increase in exports during the first five months of 2010. The export revenue of foreign-invested enterprises accounted for 51 percent of total export revenue, while domestic enterprises’ export revenue accounted for 49 percent. In 2009, the figures were 47 percent and 53 percent, respectively.

Hoang noted that in this period, foreign-invested companies exported $13.8 billion in products, including crude oil, which is an increase of 25.9 percent over the same period of 2009. If not counting crude oil, export revenue would still remain high at $11.7 billion, a surge of 39 percent over the same period of 2009.

Some foreign-invested companies plan to expand 2010 exports. Intel Vietnam is has nearly finished its equipment installation and assessment of its initial production line. Production by the Intel Vietnam factory is scheduled for July and the company plans to churn out six million products in the third and fourth quarters of 2010. The factory will be ready to increase production capacity once the demand for chips increases in the world market.

Samsung Vina has also set its plan to export 42 million products worth $1.5 billion, striving to become the foreign-invested enterprise with the highest export value in Vietnam.