Highlights for Vietnam’s Processing and Manufacturing Industry in Q3/2024

Overview of FDI and Development in Vietnam’s Processing and Manufacturing Industry in Q3/2024

Foreign Direct Investment (FDI) in Vietnam sees a strong increase

According to the Foreign Investment Agency of the Ministry of Planning and Investment, by September 30, the total foreign direct investment (FDI), including new registrations, adjusted capital, and capital contributions through share purchases by foreign investors in Vietnam, reached over 24.78 billion USD, an 11.6% increase compared to the same period in 2023. Actualized capital was over 17.3 billion USD, up 8.9%.

The processing and manufacturing industry continues to lead, accounting for nearly 63.1% of total investment

In the first nine months, foreign investors invested in 18 out of 21 national economic sectors. The processing and manufacturing industry led with a total investment of nearly 15.64 billion USD, making up nearly 63.1% of total registered investment. Notably, 98 countries and territories invested FDI in Vietnam over the nine months, with Singapore and China taking the lead, investing 7.35 billion USD and 3.2 billion USD, respectively.

News highlights from regions with positive development in the processing and manufacturing industry in Vietnam

Bac Ninh

Bac Ninh province has granted investment certificates to over 2,400 projects with a total investment of more than 28 billion USD. With an open investment environment, modern infrastructure, and a large local and migrant labor force, Bac Ninh is solidifying its position as an attractive destination for investors, particularly from Japan and South Korea in the fields of software and semiconductors.

Since the beginning of the year, Bac Ninh provincial leaders have met and worked with many FDI businesses in the area to address challenges, including meetings with the Samsung Vietnam complex, and prominent Chinese, Japanese, and Vietnamese companies. They also visited and collaborated with Canon Vietnam and Goertek Vina, among others, and held discussions with companies like Amkor Technology Vietnam, Goertek, Johnson Group (Taiwan), CMC Technology Group, and Kine SIC Semi (USA) to explore investment opportunities in the province.

Ho Chi Minh City

Ho Chi Minh City ranks second nationwide in attracting registered FDI over the past nine months, with more than 1.91 billion USD (accounting for 7.7%). The city leads the country in the number of new projects (41.1%) and in capital contributions and share purchases (70.5%). Currently, 125 countries and territories are investing in the city, with more than 13,000 projects totaling nearly 90 billion USD.

Ho Chi Minh City benefits from several important factors that facilitate international investment, including unique mechanisms and policies that surpass the national institutional framework. “Ho Chi Minh City has special mechanisms for constructing ring roads, synchronized highways, and transportation infrastructure that links the Southeast region with the Mekong Delta, expanding the economic space and creating geographic advantages in terms of economic infrastructure and logistics. The city is ready to welcome, accompany, and cooperate to create value and harmonize interests,” said Phan Van Mai, Chairman of Ho Chi Minh City People’s Committee.

Quang Ninh

In the first nine months of 2024, Quang Ninh attracted 27 new projects with a total capital of 1.6 billion USD. Additionally, 19 projects increased their capital by a total of 203 million USD, and two capital contribution projects were worth 56 million USD. Altogether, Quang Ninh attracted 1.81 billion USD in the first nine months of 2024. The province also has 197 active FDI projects, with 133 projects located in industrial parks (IPs) and economic zones (EZs), totaling 9.05 billion USD in registered capital.

Several notable projects have been implemented, including the Gokin Solar Hai Ha Vietnam single-crystal silicon and monocrystalline silicon rod project at the Texhong Hai Ha IP (Hải Hà district) and the bearing and linear motion device production project at the Song Khoai Amata IP (Quang Yen town). These are all new-generation FDI projects in the processing and manufacturing sector, using clean, modern, and environmentally friendly technology from investors in Japan, China, Singapore, and South Korea.

Hai Duong

According to the Hai Duong Department of Planning and Investment, in the first nine months of 2024, the province attracted nearly 350.5 million USD in FDI, equivalent to 89.3% of the same period last year. This includes 48 newly registered projects with a total investment of 214.5 million USD, and 26 projects received additional capital of 130.7 million USD. Most new FDI projects are concentrated in new industrial parks such as the expanded Dai An, expanded Phuc Dien, and An Phat 1, primarily focusing on energy, processing and manufacturing, and office supplies.

Lai Châu

On October 13, the People’s Committee of Lai Chau Province held the 2024 Investment Promotion Conference. At the conference, the province granted investment policy approval to four businesses with a total investment capital of over 2,000 billion VND. These include the La Si 1A and Nam Nga hydropower projects, two Hong tree plantation projects in Sin Ho district, and a high-tech forest plantation project in Nam Can commune.

Lai Chau also issued certification codes to two Lai Chau ginseng cultivation facilities and signed 12 investment cooperation memoranda of understanding with various investors in sectors such as real estate, tourism, medicinal fruit tree cultivation, agricultural and forestry product processing, and product distribution. The total estimated investment value is over 3,000 billion VND.

Phu Tho

With vast agricultural potential, Phu Tho is becoming an attractive destination for investors. To date, 150 investment projects in agriculture and agricultural product processing have been licensed.

Among these are six FDI projects with a registered capital of 56 million USD and 144 domestic projects with a registered capital of 8,607.6 billion VND, covering more than 4,498 hectares of land. These projects focus on various fields, from wood processing and vegetable and fruit production to livestock farming and crop cultivation, promising to create a new wave of socio-economic development for the province.

Processing and Manufacturing Industry – A Growth Driver of the Economy

In September, despite facing the severe impact of Typhoon No. 3 (Yagi), which caused significant damage to lives, assets, and socio-economic infrastructure in the northern mountainous provinces, Vietnam’s economy achieved important results thanks to timely recovery measures.

According to the General Statistics Office, the added value of the entire industrial sector for the first nine months of 2024 is estimated to have increased by 8.34% compared to the same period last year (Q1 increased by 6.47%, Q2 by 8.78%, and Q3 by 9.59%). Specifically, the processing and manufacturing industry grew by 9.76% (Q1 up by 7.21%, Q2 by 10.39%, and Q3 by 11.41%), contributing 2.44 percentage points to the total added value growth of the economy.

Source: Data from the General Statistics Office.

In addition, a business trend survey of companies in the processing and manufacturing industry for Q3/2024 shows that 34.7% of businesses rated their production and business performance better than in Q2; 42.6% reported stable conditions, and 22.7% faced difficulties (similar to the Q2 figures). For Q4/2024, 42.2% of businesses expect an improvement compared to Q3, 40.4% foresee stability, and 17.4% predict more difficulties.

Localities with the highest production index growth in the processing and manufacturing industry for the first nine months of 2024 compared to the same period last year include: Lai Chau (up by 47.0%), Phu Tho (40.3%), Quang Ninh (28.4%), Bac Giang (28.2%), Ba Ria-Vung Tau (22.7%), Thanh Hoa (20.0%), Binh Phuoc (17.5%), Quang Nam (17.4%), Ha Nam (15.9%), and Hoa Binh (15.2%).

Positive signs from Vietnam’s overall economy, especially from the processing and manufacturing industry, demonstrate that Vietnam is becoming an increasingly attractive destination for international investment.

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