Over 62pct of Australia’s FDI in Vietnam poured into manufacturing and processing

13-Jan-2015 Intellasia | Tri Thuc Tre | 6:00 AM Print This Post

As per the statistics of Foreign Investment Agency – FIA (the Ministry of Planning and Investment), Australia had 24 investment projects in Vietnam in 2014, ranking 16/60 countries and territories having investment in Vietnam with a total registered capital of $30.73 million.

There were six capital increase projects with a total registered additional capital reaching $112.11 million. Overall in 2014, the total newly registered and additional capital of Australian investors was $142.84 million.

Generally, the size of Australian projects is not large, about $5.2 million – smaller than the average scale of an FDI project nationwide at $14.3 million.

By industry, as of December 15, 2014, Australia investors invested in 18/21 industries in the national economic classification system. Australia’s FDI focuses mostly in the field of manufacturing and processing with 119 projects having a total investment of $1.03 billion (reckoning for 62.7 percent of Australia’s total investment in Vietnam).

The agriculture, forestry and fisheries sector ranks the second with 15 projects having a total investment of $115.42 million (reckoning for seven percent of Australia’s total registered investment in Vietnam), followed by such areas as mining, accommodation, catering, construction, etc.

The fields of professional activities, science and technology also attract a large number of projects, ranking the second after the manufacturing and processing field in terms of the number of projects in Vietnam. However, the average scale of these projects is rather small, only about $0.42 million per project.

By type of investment, Australia investors mainly use capital in two forms, including 100 percent foreign investment and joint venture. Currently, there are 233/320 Australian investment projects in Vietnam in the form of 100 percent foreign capital with a total registered capital of $1.09 billion (reckoning for 66.3 percent of Australia’s total registered investment in Vietnam), 74 joint venture projects with a total registered investment of nearly $471.3 million (making up 28.5 percent of Australia’s total investment in Vietnam). The remaining projects are conducted in the form of business cooperation contracts and joint venture companies.

By localities, Australia investors invested in 39/63 provinces and cities nation-wide (including offshore oil and gas area) mostly in Ba Ria – Vung Tau province with 11 projects having a total investment of $252.17 million (reckoning for 15.3 percent of Australia’s total investment in Vietnam).

Hanoi follows with 63 projects having a total registered investment of $236.8 million (representing 14.3 percent of Australia’s total registered investment in Vietnam). HCM City attracts the highest number of Australia’s investment projects with 125 projects, but only ranks the third with a total investment of $161.9 million (making up 9.8 percent of Australia’s registered investment in Vietnam).

Some of Australia’s major projects in Vietnam can be named as the project on ore exploration, mining, processing, transport, export by Ban Phuc Nikel Mines Co., Ltd with a total registered capital of $136 million in Son La province; Foster’s – Tien Giang Co., Ltd with a total registered investment of $126.4 million in Tien Giang province; Bluescope Steel Vietnam Co., Ltd with a total registered investment of $105 million in Ba Ria – Vung Tau province.

As per FIA’s assessment, Australia has been a Vietnam’s important investment partner in recent years. However, Australia’s investment in Vietnam now has not commensurated with the cooperation potential between the two sides. In order to promote the investment cooperation between Vietnam and Australia, the two countries need to create more favourable conditions for the business communities to have the chance to exchange and communicate with each other to promote the trade and investment process.

With the policy on multilateralisation and diversification of external economic relations, the efforts to improve investment environment to attract and enhance the efficiency of FDI capital use, and the positive impact of the implementation process of Vietnam’s bilateral agreements with other countries in the region and in the world, it can be predicted that, in the years to come, foreign investment flows to Vietnam will increase in which there will be more investment projects from Australian investors.

 


Category: Economy, Vietnam

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