Some places to accelerate, some places to run out of steam.

Attracting foreign direct investment (FDI) to the Southeast region of Vietnam shows a clear divergence, with provinces possessing large land reserves and infrastructure advantages accelerating their growth, while localities with limited industrial land are struggling.

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Dong Nai and Ba Ria - Vung Tau accelerate their growth.

Many business leaders attending the Ba Ria - Vung Tau Province Planning Implementation and Investment Promotion Conference at the end of March 2024 were surprised to see that investment attracted to the province in the first quarter of 2024 exceeded the total capital of 2023.

According to Mr. Le Ngoc Linh, Director of the Department of Planning and Investment of Ba Ria - Vung Tau province, in the first quarter of 2024, the province granted new licenses and adjusted investment capital for 23 domestic and foreign projects (including 13 FDI projects with an investment capital of over 1.56 billion USD), with a total investment of over 62,000 billion VND, reaching over 90% of the 2024 plan and exceeding the total for 2023 (nearly 51,000 billion VND).

Another bright spot in attracting FDI in the Southeast region is Dong Nai province . Statistics from the province's Department of Planning and Investment show that in the first quarter of 2024, the province attracted $571.3 million in FDI, an increase of 13% compared to the same period last year. The province aims to attract $700 million in FDI in 2024; thus, by the end of the first quarter of 2024, it had already achieved 81% of its annual plan.

While Dong Nai and Ba Ria - Vung Tau are experiencing strong growth in attracting FDI, Binh Duong and Ho Chi Minh City are seeing a slowdown after many years of high results. Statistics show that in the first quarter of 2024, FDI attraction in Ho Chi Minh City reached only US$459.7 million, a decrease of 7.6% compared to the same period; while Binh Duong reached US$158.3 million, a decrease of 36.1% compared to the same period.

The slowdown in attracting FDI in Binh Duong and Ho Chi Minh City was not unexpected by investors, because after years of attracting large corporations, industrial land in these two localities has gradually shrunk, and new industrial parks have not been built. For example, after attracting the $1.3 billion Lego Group project, FDI in Binh Duong surged, but in subsequent years it failed to attract large projects, resulting in a significant decrease in FDI.

Why are investors flocking to Dong Nai and Ba Ria - Vung Tau?

The influx of foreign investors into Dong Nai and Ba Ria - Vung Tau shows that these two localities have significant advantages over other provinces and cities in the Southeast region, especially in terms of infrastructure.

Mr. Nobuyuki Matsumoto, Chief Representative of the Japan External Trade Organization (JETRO) in Ho Chi Minh City, stated that Ba Ria - Vung Tau is one of the localities that JETRO recommends businesses invest in. This locality has many advantages such as: the Cai Mep Thi Vai port and the Long Thanh International Airport (under construction); rich in oil and gas resources and an LNG receiving facility, providing stable electricity; two universities; and proximity to Dong Nai and Binh Duong – two localities with many factories ensuring supply for the supply chain.

"Importantly, the Japan One-Stop Shop has been established under the Department of Planning and Investment of Ba Ria - Vung Tau province to provide comprehensive support and resolve issues related to Japanese businesses. I believe this is the most important factor in attracting investment to the province," Mr. Nobuyuki Matsumoto stated, highlighting the advantages.

Speaking about the reasons for choosing Ba Ria - Vung Tau as an investment destination, Mr. Lee Sang-Woon, Vice President of Hyosung Group, assessed that the area is a maritime gateway, has an abundant and highly skilled workforce, good infrastructure, and attractive incentive policies. Hyosung has invested $1.6 billion in a polypropylene and LPG production plant. The group also plans to invest $730 million to build a bio-BDO production plant with a capacity of 200,000 tons per year.

“Hyosung will strive to become a leading company in the biotechnology industry and work together with the provincial government to create a global biotechnology hub here,” said Lee Sang-Woon.

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