Many enterprises all around the world are moving forward to invest in Vietnam these days. An executive director of Plywood panel maker and distributor from Malaysia, Dominant Enterprise Bhd, who has decided to purchase a piece of land in Vietnam for its project, attributed the attractiveness of Vietnam to the country’s construction boom and huge population base. He also expressed the view that Vietnam would eventually become a bigger market than Malaysia. There are many other foreign firms which are approaching the Vietnamese government to invest in the country. According to the Foreign Investment Agency, there are 48 projects with total capital investment of USD 39.8 billion waiting to come to Vietnam. A large portion of this huge amount of capital will be poured into hi-tech, thermo-power, real estate and steel projects.

Real estate and tourism projects account for over USD 16 billion, equivalent to 40.2% of the total amount of foreign capital that will come to Vietnam. Switzerland’s Trustee Suisse will join hands with Vietnam’s Vinaconex to build the ‘Asian Pearl’ complex together with a residential area on Phu Quoc Island, Kien Giang province involving total investment of USD 2.7 billion, which will add to the attractiveness of the country. A Korean firm, Kumho Aisana, will also invest USD 2.5 billion in the Giang Vo cultural-trade center and the My Dinh exhibition center in Hanoi. Not to be left behind, Japan’s Sumitomo also plans to build a 2,640 MW plant in the central province of Khanh Hoa with USD 3.8 billion in investment. There are other projects which are joint ventures between Vietnam and foreign investors from USA, China, Taiwan, Brunei etc.

As for investment in steel industry, a number of steel mills from around the world are knocking at Vietnam’s door to set up new projects. Recently, two giant steel companies from India have come forward to set up steel projects in the country. Tata group will be investing in a rolled steel facility near the Thach Khe iron mine costing USD 3.5 billion. Meanwhile, Essar has entered into a joint venture agreement with Vietnam Steel Corporation and Vietnam Rubber Corporation to build a rolled steel mill with 2 million tonnes per year capacity in Baria-Vung Tau province with investment of more than half a billion USD.

South Korea’s POSCO has pumped in a lot of capital in its various projects in Vietnam. It looks like POSCO is having a long term plan in this country. Having hooked up on a joint venture to produce steel pipes and corrugated steel in Hai Phong and Ho Chi Minh City respectively, POSCO is embarking on several investment plans in steel industry in Vietnam again. Recently, the company announced its intention to build a cold rolled and hot rolled steel complex in the southern Ba Ria Vung Tau province. For this project, it has tied up with local shipbuilding giant, Vinashin to develop the USD 1.13 billion plant which is expected to be ready after 2010. The company has expressed its desire to develop Vietnam as a gateway to the Southeast Asian market and it expects to secure a frontline production base in the region by pursuing its plan to link its Vietnamese operation to those in India and China. 

For the ASEAN countries, at present all the ASEAN member nations have already invested in Vietnam in one way or another. According to statistics of the Ministry of Planning and Investment (MPI), Singapore is the biggest investor in Vietnam among ASEAN member countries with 474 projects and USD 9.07 billion of investment capital. However, there is no significant investment in the steel industry. Most of the investments are concentrated in the oil and gas industry, agricultural, forestry and fisheries sectors.

Vietnam is arguably the most attractive destination for investment and business for foreign firms in the ASEAN region at the moment. It has low cost work force, political stability and a readiness of local businesses to cooperate with foreign firms. The Vietnamese Government’s policy to provide incentives and encourage more investment from other countries is also a contributing factor. Additionally, Vietnam’s admission into the World Trade Organization (WTO) on January 11, 2007 would further enhance its attractiveness as an investment and business destination.