HCM CITY: A shortage of new large garment and textile projects caused foreign direct investment in HCM City’s manufacturing sector to fall this year compared to 2015, according to the HCM City Export Processing and Industrial Zones Authority (Hepza). Hepza’s report pointed out that industrial parks and export processing zones in the city attracted only US$115.67 million in FDI for the first quarter of the year, a year-on-year decrease of 69.49 per cent.
Projects included a US$35.5 million project by Yazaki Eds Việt Nam Co Ltd in the Tân Phú Trung Industrial Park, a US$30 million increase in its capital by Furukawa Automotive Parts Co Ltd, both in the automobile support industry, and a US$25.6 million project by Nam Dương International Food Company (Singapore) at Hiệp Phước Industrial Park to produce sauces and condiments.
Trần Việt Hà, head of the Investment Management Department at Hepza, said that in the same period last year, IPs and EPZs attracted US$379.14 million in foreign capital, mostly for garment and textile projects such as the US$300 million project of Worldon Việt Nam of Hong Kong and South Korea’s Nobland Việt Nam, which increased investment capital by US$18 million to US$61 million. This year, no licenses have been granted to garment and textile projects, Hà told the Đầu tư (Investment) newspaper.
In recent years, the city has outlined policies to limit investment in labour-intensive and large industries, including the garment and textile sector. But with expected growth after the Trans-Pacific Partnership agreement takes effect, some IPs in the city like Đông Nam and Hiệp Phước will continue to receive key garment and textile projects, which are committed to use hi-technology, modern machinery and equipment, and have a design centre, he said.
For instance, on its investment certificate, Worldon Việt Nam pledged to build a centre for fashion design and produce high-quality clothing to supply to famous brands such as Uniqlo, Nike, Adidas and Puma. Hepza will tightly supervise the number of labourers, production technology and equipment in the garment and textile investment projects. Closer supervision might be why garment investors have decided to open projects in other localities.
Meanwhile, a US$2 billion Samsung project at Saigon Hi-Tech Park, which is expected to open in the second quarter of this year, is expected to create a new wave of investment in the park. But the number of new projects granted investment licenses this year has been modest. Hepza targets a total investment of US$700 million this year, and encourages companies to invest in areas like high technology and support industries, electronics, IT and chemicals.
