Vietnam News Today (Dec. 1): Vietnam Evolving to Manufacturing And R&D Hub With New FDI

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LG Display will inject another US$1 billion into its project, raising the total investment to US$5.65 billion to produce high-tech OLED screens. (Photo: baodautu.vn)

Vietnam evolving to manufacturing and R&D hub with new FDI

Vietnam is witnessing a significant shift in the quality of foreign direct investment (FDI) projects pouring into the country as an increasing number of high-tech and pioneering industrial companies move into the country to expand operations.

Samsung has recently announced an additional US$1.8 billion investment in its Samsung Display factory in Bac Ninh province, expanding production beyond organic light-emitting diode (OLED) screens for smartphones to include OLED displays for IT equipment and automobiles.

LG, another corporation from the Republic of Korea (RoK) will inject another US$1 billion into its project, raising the total investment from US$4.65 billion to US$5.65 billion. This funding will enable the production of 14 million high-tech OLED screens per month, making it one of LG's largest projects in Vietnam.

The additional investment not only supports Vietnam’s goal of attracting US$39-40 billion in FDI this year but also exemplifies the transformative shift in foreign investment into the country.

According to a recent Savills Vietnam report, the country’s industry sector is undergoing a transformative phase, attracting a wave of high-value investments.

John Campbell, Director and Head of Industrial Real Estate at Savills Vietnam, said this marks its evolution into a manufacturing, logistics, and digital hub in Southeast Asia.

Key areas like the digital economy and data centers are expected to see a surge in investment in the near future.

Campbell held that the country’s shift toward high-value-added manufacturing, alongside its expanding logistics and data center capabilities, is bolstering its global supply chain position. With its competitive costs, strategic location, and extensive trade agreements, Vietnam is well-positioned to capture this new wave of investments, he noted.

Meanwhile, Shunsin Technology Vietnam Co., Ltd., a subsidiary of Taiwanese tech giant Foxconn, announced an US$80 million investment in a chip manufacturing project in Bac Giang province, cited VNA.

Universal Microwave Technology, a SpaceX supplier, also plans to expand in Vietnam. Some companies that provide Starlink equipment for SpaceX, such as Wistron NeWeb Corporation and Shenmao Technology, are planning to establish manufacturing bases in the country.

In September 2024, during a meeting with Party General Secretary To Lam in New York, SpaceX Senior Vice President Tim Hughes revealed the company’s intent to invest US$1.5 billion in Vietnam.

A strategic manufacturing hub

Vietnam is becoming a key link in the global supply chain, especially in sectors like semiconductors and artificial intelligence (AI). Savills Vietnam’s observations align with this trend, with the country transforming into a crucial manufacturing and R&D hub for foreign investors like Samsung.

Minister of Planning and Investment Nguyen Chi Dung emphasised the government’s commitment to leveraging the country’s competitive policies, clear strategies, and skilled workforce to play a key role in the global semiconductor value chain.

A report by the US Semiconductor Industry Association and Boston Consulting Group in May this year predicts Vietnam could account for 8-9% of global chip assembly, testing, and packaging (ATP) capacity by 2032, up from 1% in 2022. By 2030, the global semiconductor market is expected to reach US$1 trillion, presenting significant opportunities for Vietnam.

To attract large-scale projects in semiconductors and AI, Vietnam must address challenges such as improving workforce quality along with investment policies. The Ministry of Planning and Investment suggests establishing an Investment Support Fund and implementing special investment procedures for high-tech projects.

Vietnam and Singapore seek to create breakthrough in economic cooperation

Economic and trade cooperation has always been a bright spot in the relationship between Vietnam and Singapore, and the two countries are seeking ways to promote this relationship in a sustainable manner.

Since 1996, Singapore has always been one of Vietnam’s largest trading partners, with two-way trade increasing year by year, and direct investment from Singapore into Vietnam growing consistently. The Vietnam-Singapore Industrial Park (VSIP) has become a symbol of the Vietnam-Singapore partnership, expanding into areas such as green industries, high-tech, and innovation.

Key ASEAN members, both Vietnam and Singapore play significant roles in multilateral forums and international affairs, such as the United Nations, ASEAN, Asia-Pacific Economic Cooperation (APEC), Asia-Europe Meeting (ASEM), and World Trade Organization (WTO).

Cao Xuan Thang, head of the Vietnam Trade Office in Singapore, noted that while Singapore is a relatively small consumer market, it is home to many multinational companies and serves as a global hub for information, trade, finance, and logistics. In addition, it is a key international air transport hub and an important gateway into Asia, particularly Southeast Asia, including Vietnam.

Statistics show in 2023, Singapore was Vietnam’s fourth largest trading partner in ASEAN after Thailand, Indonesia, and Malaysia, and the 14th largest trading partner globally. In return, the latter was the former’s fourth largest trading partner in ASEAN and the 11th largest globally, according to VOV.

The Vietnam - Singapore Industrial Park (VSIP) - a success story in economic cooperation between Vietnam and Singapore.

Two-way trade turnover between Vietnam and Singapore hit US$9.1 billion in 2023, and US$9.6 billion in the past 11 months of 2024, a 17.5% increase compared to the same period last year.

By product group, the top category is processed and manufactured goods, which make up 76% of Vietnam’s total exports to Singapore, followed by fuels and minerals (6%), and agricultural, fishery products, and construction materials (5% each). This highlights that processed and manufactured goods are the main export items to Singapore, including computers, components, machinery, equipment, and transport vehicles.

Opportunities and Challenges

Trade experts pointed out that despite strong political and diplomatic relations, business cooperation has not yet fully matched the two countries’ potential. For instance, in the agriculture and seafood sectors, Vietnam has abundant agricultural and food resources, while Singapore imports over 90% of its food. However, agricultural exports from Vietnam to Singapore account for only 5% of the total exports, with some products such as chicken and eggs still not allowed to be imported into the island state. Furthermore, challenges faced by businesses include stringent food safety, technical standards, environmental protection regulations, and other import requirements in Singapore.

Moreover, Singaporean consumers have high expectations regarding product quality, labelling, branding, and reputation, which means many Vietnamese products still struggle with consistency, variety, and branding. In addition, competition in the Singapore market is fierce, with competitors coming from Thailand, India, and Japan.

Yet, trade experts said, these are favorable factors that promote business cooperation between Vietnam and Singapore, due to the two countries’ good political and diplomatic relations, close geographical proximity, and similar cultural environments within Southeast Asia, not to mention they both are members of many free trade agreements (FTAs). Additionally, every year, many business delegations from Singapore are supported by the Vietnamese Trade Office to visit Vietnam to explore market opportunities and establish partnerships.

During a recent meeting with Singapore’s Ambassador to Vietnam Jaya Ratnam, Deputy Minister of Industry and Trade Nguyen Hoang Long emphasized that Singapore is a leading economic, trade, and investment partner for Vietnam in the region and globally. Long expressed hope that Singapore would continue to support Vietnam in areas like the digital economy, green growth, and sustainable development, particularly in helping Vietnam achieve its net zero emissions target by 2050.

Ambassador Ratnam confirmed Singapore’s willingness to collaborate and assist Vietnam in training its workforce in these sectors and others on request from Vietnam.

To gain a firm foothold in the Singaporean market, Thang underscored the importance for businesses to thoroughly research the market, understand changes in import policies, and develop export strategies. He also noted that Singapore is becoming more cautious in its trade policies and is diversifying its trade partners, presenting an opportunity for businesses to penetrate deeper into the market.

He also suggested that businesses renovate production technologies and improve product quality, packaging, and branding to meet Singapore’s high standards, particularly in the growing green consumption sector. Furthermore, businesses were advised to actively engage in trade connections, expand partnerships, and leverage e-commerce to market products, build a strong relationship with consumers, and gain flexibility in adapting to market demands.

Hanoi Culinary Culture Festival 2024 kicks off

The Hanoi Culinary Culture Festival 2024 with the theme “Hanoi ket noi nam chau” (Hanoi connects the World) is underway at Thong Nhat Park in the capital city.

In her remarks at the opening ceremony on November 29, Vice Chairwoman of the Hanoi People's Committee Vu Thu Ha highlighted that the festival draws the participation of 16 embassies, alongside eight neighbouring provinces with over 80 booths.

The event offers an opportunity for organisations, individuals and artisans to meet, exchange, promote products, and experience the unique culinary culture of countries, territories, provinces and cities. People and tourists can immerse themselves in many folk games, enjoy traditional and modern cultural and art performances performed by Vietnamese and international artists. They can talk with famous artisans and chefs who have "breathed life" into ingredients and food to turn them into unique culinary works of art which are imbued with national identity.

Festival-goers have a chance to connect with artisans and renowned chefs, who have "breathed life" into ingredients and foods, transforming them into unique culinary artworks rich in national identity, VNA reported.

Pho (rice noodle soup) is prepared by smart robots (Photo: VNA)

Alongside Me Tri’s young sticky rice flakes, Phu Thuong’s sticky rice , and Quang An’s lotus-scented tea traditional craft, Hanoi's pho (rice noodle soup) was honoured in 2024 by the Ministry of Culture, Sports, and Tourism as a national intangible cultural heritage. This event is a source of great pride for the people of the capital and serves as an important legal foundation for implementing measures to protect and promote the cultural value of pho as intangible heritage.

“This year’s Hanoi Culinary Culture Festival features ‘Pho So Ha Thanh” or Ha Thang Digital Pho, a unique creation that blends traditional cuisine with cutting-edge technology, presenting a novel perspective on the application of technological advancements and digital transformation in Vietnam's culinary sector,” Ha said.

During the three-day festival, visitors have the opportunity to experience typical traditional pho dishes of Hanoi and 'digital pho' prepared by smart robots.

Lonely Planet lists Vietnamese resort among world’s 12 best Christmas vacation places

World renowned travel guide Lonely Planet has named Alma Resort Cam Ranh in the coastal city of Nha Trang, Khanh Hoa province, among 12 hotels which go all out for the festive Christmas season.

The Vietnamese representative, highly recommended as a wonderful Christmas getaway, ranks sixth on the overall list.

From a gingerbread house-turned-dessert shop to a life-sized advent calendar which reveals little surprises each day, the festive spirit is in full swing at Alma Resort, a 30-acre beachfront resort situated on Vietnam’s south central coast, the website wrote.

Lonely Planet also made a brief introduction about the stunning gingerbread house which is located within the resort. The house is made from 511lbs (232kg) of real gingerbread, including 800 wall tiles and 1200 roof tiles, and frosted with 88lbs (40kg) of meringue.

Furthermore, the resort also hosts a Holiday Maker’s Market where visitors are able to shop for locally crafted treasures. Christmas cards made by kids from a local orphanage can also be bought from the Kids Club, with all of the proceeds going to supporting the orphanage, the travel guide shared.

Topping the list is the Plaza in New York in the United States. Christmas at the Plaza is as magical as the movies which made it famous such as Home Alone 2 (1992) and Eloise at Christmastime (2003), Lonely Planet wrote.

Other destinations featuring in Lonely Planet’s list include Gleneagles in Scotland, Paws Up Montana in the US, Four Seasons Resort Maldives at Landaa Giraavaru in the Maldives, La Mamounia in Morocco, Villa d’Este in Italy, Union Øye in Norway, Hotel Taschenbergpalais Kempinski Dresden in Germany, the Capra Saas Fee in Switzerland, Claridge's in the UK, and Beaches in Turks and Caicos.

British conglomerate targets VN's top corporations amid competitive pressures

British conglomerate Jardine Matheson is deepening its investments in Vietnam's top companies, including Thaco, REE, and Vinamilk, though profits are facing headwinds.

Jardine Matheson, a multinational conglomerate with nearly 200 years of history spanning Asia and Europe, has long been known for its diverse business ventures - from trading opium, tea, and cotton to investments in automobiles and real estate. Today, the group is strengthening its footprint in Vietnam by investing heavily in leading corporations.

Through its Singapore-based subsidiary Jardine Cycle & Carriage (JC&C), Jardine Matheson focuses on automotive distribution and has significant stakes in prominent Vietnamese companies, including Thaco (led by billionaire Tran Ba Duong), REE Corp. (headed by Nguyen Thi Mai Thanh), and Vinamilk (under Mai Kieu Lien’s leadership).

JC&C began its investment in Thaco in 2008 with a 20.5% stake and has since increased its shareholding to 26.6% by 2019. In late 2023, JC&C acquired $350 million in convertible bonds from Thaco, maturing in 2028, a move that will further boost its stake in the company.

In 2012, JC&C invested in REE Corp. through its Platinum Victory fund, initially acquiring more than 10% ownership. This has grown to over 35%, with plans to reach 42.1% through a recent registration to purchase 30 million additional shares, valued at approximately VND 1.9 trillion. At current market prices, JC&C’s stake in REE is worth over VND 11 trillion.

Similarly, JC&C has invested heavily in Vinamilk, holding over 10% of shares valued at roughly VND 14 trillion. Beyond these corporations, Jardine Matheson has also entered Vietnam's real estate market through its subsidiary Hongkong Land, which manages several high-value properties in Hanoi and Ho Chi Minh City.

Jardine Matheson’s success lies in its strategy of investing in market-leading companies with long-standing operational histories. However, the group avoids investing in large real estate corporations or emerging companies less than two decades old, VNN reported.

Jardine Matheson and Hongkong Land celebrate 50 years of Jardine House, Hong Kong’s first skyscraper. (Photo: Jardine)

Despite its calculated strategy, Jardine Matheson has seen profit declines in Vietnam. According to the group’s mid-2024 financial report, JC&C’s profits from its Vietnamese investments fell 12% year-over-year to $30 million.

Thaco contributed $15 million, though its auto sales and market share improved. Profitability in the automotive segment declined due to intense competition, particularly from electric carmaker VinFast (owned by billionaire Pham Nhat Vuong) and Chinese manufacturers.

REE Corp. generated $7 million in profits for JC&C, a 39% drop attributed to reduced hydropower demand. Despite its half-century history, REE's focus on renewable energy and clean water projects has faced challenges.

Vinamilk remains Vietnam’s dairy leader but has experienced slowing revenue and profit growth over recent years, accompanied by a decline in stock value.

In real estate, Jardine Matheson operates through Hongkong Land, which owns prime properties like Central Building in Hanoi and The Nassim in Ho Chi Minh City. The conglomerate also has ties to well-known retail chains in Vietnam, including Pizza Hut, Starbucks, and KFC.

Founded in 1832 in Canton (now Guangzhou, China) by Scotsmen William Jardine and James Matheson, Jardine Matheson initially made its mark trading opium, tea, and spices. By 1834, the company had ended the East India Company’s monopoly in Asia, becoming the largest British trading firm in the region.

In 1844, Jardine Matheson established its headquarters in Hong Kong and expanded along China’s coastline, cementing its dominance in Asian commerce.

Today, the group continues to leverage its historical expertise to navigate the modern business landscape, with Vietnam being a key focus.

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