Workers at a factory at the Tân Thuận Industrial Park in HCM City. VNA/VNS Photo

 HCM CITY — Foreign direct investment in supporting industries is expected to spike in the coming months as more and more foreign companies establish production facilities in Việt Nam and seek to develop supply chains here, experts said.

HCM City has, for instance, exceeded this year’s FDI target despite the Covid-19 pandemic, racing to more than US$591 million in the first 10 months, a 7 per cent increase from the same period last year, according to the HCM City Export Processing and Industrial Zones Authority (HEPZA).

The investment was focused in sectors prioritised by the city government, including supporting industries, Hứa Quốc Hưng, head of HEPZA, said.

Six of the 11 newly licensed foreign companies are in supporting industries, he said.

Japanese company Nikkiso Vietnam MFG invested an additional $3 million in its medical equipment factory at the Tân Thuận Export Processing Zone to expand production.

Other localities in the south have also licensed a number of large foreign projects in supporting industries this year.

Bình Dương Province has licensed a $20 million venture by Singapore’s Ever Giant International Private Limited in the Bàu Bàng Industrial Zone and a $30 million project by Singapore’s Sung Shin Tech Limited at the Tân Đông Hiệp B Industrial Park.

A majority of FDI in Đồng Nai Province this year has gone into supporting industries, according to its Industrial Zones Authority.

Many foreign companies in supporting industries in the province have increased their investment. Germany’s Schaffler Vietnam based in the Amata Industrial Park pumped in another $50 million and South Korea’s Chang Shin Vietnam at Thạnh Phú Industry Park increased its investment by $87 million. 

The Saigon Hi-Tech Park in HCM City last month signed an agreement with export processing and industrial zones authorities in the South Key Economic Zone, which comprises HCM City and the provinces of Bình Dương, Đồng Nai, Long An, Tây Ninh, and Bà Rịa- Vũng Tàu, to develop a network for supporting small and medium-sized supporting industry firms by promoting regional linkages.

Fifteen of 30 Japanese enterprises diversifying their supply chains to Southeast Asia under the Japanese Government’s pandemic stimulus package have opted to move to Việt Nam, according to the Japan External Trade Organisation.

They include nine small and medium-sized enterprises and six large ones, with most producing medical equipment, semi-conductors, mobile phones and parts, and air conditioners.

Việt Nam has become a preferred alternative manufacturing base for its facilities and labour costs, according to a report on the industrial property market released recently by Savills Việt Nam.

Multinationals producing high value added products such as electronics, under increased pressure to cut costs, would shift more and more to Việt Nam and the rest of Southeast Asia, the report added. —VNS