Monthly Report on Implementation status of Industrial Projects in Vietnam – June 2020

(HOUSELINK) – The Report on Implementation of Industrial Projects in Vietnam – June 2020 analyzed the latest movements in the economy, investment activities as well as the implementation of industrial projects across the country.

In June 2020, contributions to the recovery from the total registered FDI capital and the total amount of foreign direct investment have gone beyond expectations to mark its success compared to the same period last year, marking the momentum in boosting production and investment activities in the following months. Simultaneously, the process of implementing construction projects have begun to accelerate since the socio-economic context was stabilized.

The report is periodically conducted by HOUSELINK’s market research team to comprehensively monitor project implementation in the Industrial construction market. Industrial projects under construction as well as projects in the preparation stage (preparation, design, selection of contractors). They will also be summarized and analyzed for Report.

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Highlighted content

I. Socio – Economic overview

1. Foreign direct investment

Despite the impact of the epidemic, the total foreign investment in June 2020 is still rising significantly compared with the same period last year. Meanwhile, newly registered foreign investment capital increased 15%, equal to US $1.1 billion.

Total foreign direct investment capital implemented in June 2020 reached US $1.95 billion, the highest over the past 5 years.

2. Industrial production

The index of industrial production of June 2020 raised 7% compared to the same period of last year. Due the sharp decline in global demand to crude oil, crude oil and natural gas exploitation, as well as support services were also dramatically dropped compared to June 2019.

3. Import and export of goods

In June 2020, Vietnam has trade surplus of US $500 million. In term of total import and export turnover, foreign direct investment (FDI) enterprises have a value that 1.5 times greater than domestic enterprises.

4. Business registration

After 2 months of loosening and removing social distancing campaign, socio – economic activities are gradually being recovered. The number of newly registered enterprises up by 28% over the previous month, as well as increasing by 5.9% compared to June 2019.

5. Consumer price index and inflation

The consumer price index in June 2020 increased by 0.66% as of the previous month. The main reason is that gasoline price was adjusted up 3 times in a row after a series of deep declines since Chinese New Year, going in the same path with the raise of pork price in the first couple days of June.

II. THE IMPLEMENTATION STATUS OF INDUSTRIAL PROJECTS ON JUNE 2020

Based on the data of industrial projects with a total investment of more than US $2 million (equivalent to VND 46 billion) with foreign direct investment (FDI) and domestic direct investment (DDI) on HOUSELINK platform, we have conducted data collecting, analyzed and formulated report on projects under construction in June 2020, as well as projects planning for construction within 2020.

1. Overview of the implementation status of industrial projects in June 2020.

2. Industrial projects planning for construction

a. Industrial projects planning for construction by work type

Industrial projects are mainly in the form of new construction. However, more and more manufacturing investors are expanding scale of their existing industrial projects.

In addition to the form of new construction, there are more investors expanding their existing factories and warehouses. The number of these projects raised up to 22% in June, compared to May of 2020.

b. Industrial projects planning for construction by locations

Binh Duong owns the highest in the number of industrial projects planning for construction. Despite Quang Ninh ranks first in total investment value and construction floor area. Hai Phong, Hai Duong, Ba Ria – Vung Tau ranked second, third and fourth in terms of the number of industrial projects under construction, with 44, 43, 42 projects respectively.

While Hai Phong, attracts Korean investors for electrical supply and electronic equipment; domestic investors and Korean investors also have a large number of projects in Hai Duong in the fields of textiles, food and beverages. Ba Ria – Vung Tau has a large number of direct investment projects from South Korea and focuses on manufacturing components of machinery, construction materials.

The remaining in top 10 provinces with the highest investment value and construction floor area are mainly concentrate in the North (Hai Phong, Hanoi) and the Central (Thanh Hoa, Quang Tri, Thua Thien Hue, Quang Nam, Quang Ngai). This brings up the trend of investing in industrial manufacturing in Northern and Central area of Vietnam in the upcoming periods.

c. Industrial projects planning for construction by project types

Textile and garment sector has the largest number of industrial projects planning for construction. Meanwhile, the energy sector owns the largest total investment and floor area planning for construction.

d. Industrial projects planning for construction by investment forms

Domestic direct investment (DDI) ranks first in term of number of projects, total investment value and gross floor area of projects planning for construction.

3. Industrial projects under construction

a. Industrial projects under construction by work types

The number of projects under construction in June 2020 surged high compared to May 2020 in both forms of new construction and expansion construction.

In addition to the new form of construction, manufacturing investors are considering the option of expanding the existing factory.

b. Industrial projects under construction by location

Binh Duong is still taking the lead in the number of projects under construction. However, Dong Nai has the largest gross floor area and investment value.

The remaining provinces in the list of Top 10 localities with the largest number of projects under construction are concentrated in the Southeast region such as Long An, Dong Nai,….

c. Industrial project under construction by project types

Textile and garment sector accounts for the largest number of projects under construction. However, electronic sector has the biggest investment value and gross floor area. Plastic factory, electrical equipment supply, agriculture & animal feed ranked third, fourth and fifth in the number of industrial projects under construction.

Plastic production projects are focusing in Long An and Hai Phong]provinces. In addition, investors are focusing on developing electrical equipment plants in Hai Phong and Ha Nam, as well as agricultural & animal feed factories in Binh Dinh.

The remaining in Top 10 having the largest in investment value and total floor area include plastic factories, industrial infrastructure, construction materials, agriculture & animal feed, furniture, forest products processing, logistic centers, energy and chemicals with total investment value ranging from US $200 to $300 million.

d. Industrial projects under construction by investment forms

In term of investment forms of industrial projects under construction in June 2020, direct domestic investment still dominates in the number of projects, total investment value and gross floor area.

As expressed by investment value and construction floor area criteria, domestic direct investment projects ranked first, with US $1.63 billion and 584 hectares of area. This investment form targets their capital more for industrial infrastructure and in Dong Nai province.

The rest in Top 10 investment value primarily from East Asia (Hongkong, Japan, Singapore).Moreover, foreign direct investment from Belgium has an impressive investment value of US $125 million with 42 hectares of gross floor area.

III. TOP 10 OUTSTANDING INDUSTRIAL CONSTRUCTION PROJECTS IN JUNE 2020

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