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Industrial production sees positive recovery

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Vietnam’s economic growth in the first half of 2024 achieved a positive result with a figure of 6.42%. The significant recovery in industrial production has made an important contribution.

According to the General Statistics Office, the industrial sector experienced many positive changes and achieved good growth, in the first six months of the year. Notably, in the second quarter, industrial production recovered positively, based on relatively low growth in the same period of 2023 (0.86%), with the added value reaching 8.55%, compared to the same period. Specifically, the manufacturing and processing industry surged with a growth rate of 10.04%, while the electricity production and distribution industry continued to grow strongly at 14.15%, ensuring electricity supply for production, business, and people’s needs. The water supply, waste management, and wastewater treatment sectors increased by 7.83%, and the mining industry recorded a negative growth of 9.06%, due to the policy of gradually reducing domestic mineral extraction.

Overall, in the first six months, the added value of the industrial sector reached 7.54%, and many secondary sectors had double-digit growth.

Enterprise’s recovery beyond expectations

Despite many pessimistic forecasts, at the beginning of the year, industrial enterprises have shown a good recovery in the first half of the year. Many businesses have made a spectacular comeback.

For multi-industry conglomerates like DNP Holding, systems operation under unstable economic conditions over the past six months, has been a significant challenge. However, by the end of May, the company’s revenue exceeded 50% of the plan, and profits increased by more than 50%.

Tran Huu Chuyen, Deputy General Director of the Group, noted that this result was beyond the initial forecast thanks to a remarkable orders recovery amid cheaper and more accessible credit. “Despite challenging economic conditions, we highly appreciate the timely support from the Government. We have taken advantage of boosts related to policy to restructure and recover effectively.”

A highlight in the economic picture of the past six months was the attraction of foreign direct investment (FDI). The capital flow continued to increase, estimated at 10.84 billion USD, up 8.2% from last year. This is the highest figure for the first six months in the past five years.

This has provided companies in the cleanroom and high-tech supply areas, such as Intech Group, with many advantages. According to Cao Dai Thang, CEO of the Group, the industrial production activities of FDI enterprises have been quite active, with a high demand for building production systems, allowing the company to recover better.

Phi Huong Nga, Director of the Industrial and Construction Statistics Department under the General Statistics Office, assessed that industrial growth was positive, with industrial production continuing the recovery momentum from the first quarter of 2024 and showing a clearer growth trend in the second quarter. The industrial production index increased month by month and quarter by quarter, with 5.9% in the first quarter, an estimated 9.5% in the second quarter, and an estimated 7.7% in the first six months of 2024, compared to the same period last year. Among these, three out of four primary industrial sectors (including manufacturing, electricity production and distribution, water supply, and waste treatment) increased compared to last year, with growth rates of 8.5%, 13.0%, and 6.3%, respectively.

Especially, the manufacturing and processing industry, which accounts for more than 74% of the added value of the entire industrial sector, continued its growth trajectory in a clearer trend, increasing by 8.5% in the first half of the year, compared to the same period last year while the same period saw a decrease of 1.8%.

In the manufacturing and processing industry, inventory levels decreased as reflected by an increase in production index, a higher consumption index than production, and an inventory index reduction. Specifically, the production index and consumption index increased by 8.5% and 10.8%, respectively (the consumption index increased by 2.3 percentage points higher than the production index) and the inventory index was expected to increase by 9.6% as of June 30, 2024, compared to the same time last year, significantly lower than the 19.9% increase in the same period in 2023. The average inventory ratio of the manufacturing and processing industry in the first six months of 2024 was 76.9%, much lower than the 83.1% increase in the same period in 2023.

Business confidence

Le Duy Binh, an economic expert, believes that this recovery is also clearly reflected in the relatively high increase in exports and imports, with 14.5% and 17%, respectively. These figures indicate that enterprises had good order volumes and showed positive imports of raw materials for production.

Binh said the number of enterprises returning to the market and the number of newly established enterprises increased strongly, showing that the health of the business sector has improved. This has reversed the trend of previous years when the number of enterprises withdrawing was higher than that of new establishments. “Particularly, the recovery of the manufacturing and processing industry has been stronger, showing a more reliable recovery of the economy,” said Binh.

Paulo Medas, Head of the International Monetary Fund (IMF)’s 2024 Article IV Mission to Vietnam, gave a positive evaluation of Vietnam’s flexible fiscal and monetary policy management. State’s support policies are targeted correctly to help the economy recover and grow more sustainably. “Especially, the recovery of the business sector shows that business confidence has returned. This is also quite clearly reflected in the FDI sector. When global capital flows are still very gloomy, Vietnam remains a reliable destination for many foreign investors”, Paulo assessed.

However, in the context of many global uncertainties, the Government and relevant ministries and agencies must continue to support business activities, Binh added. There are still more than 100,000 enterprises withdrawing from the market, and the survey results on business trends of manufacturing and processing enterprises showed that more than 60% still believe that the business situation will not improve. This indicates that there are still issues in need of being addressed to improve the business environment and boost the spirit and enthusiasm of enterprises in business activities.

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Vietnam adds 142 inspected solar power projects to Power Development Plan’s implementation scheme

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10 minutes ago

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March 16, 2025

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Vietnam’s Ministry of Industry and Trade has approved the inclusion of 142 solar power projects, which were previously inspected, into the implementation scheme of the Power Development Plan for the period 2021-2030, with a vision until 2050 (PDP VIII).

The 100 MW Ea Sup 3 solar power complex, developed by Xuan Thien Group, in Dak Lak province, Vietnam's Central Highlands. Photo courtesy of the company.

The 100 MW Ea Sup 3 solar power complex, developed by Xuan Thien Group, in Dak Lak province, Vietnam’s Central Highlands. Photo courtesy of the company.

Among them are large-scale solar power plants such as Trung Nam in the central province of Ninh Thuan (204 MW), CMX Renewable Vietnam in Ninh Thuan (168 MW), Hong Phong 1 A & B in the central province of Binh Thuan (250 MW), Dau Tieng 1 & 2 in the southern province of Tay Ninh (350 MW), Sao Mai in the Mekong Delta province of An Giang (210 MW), Hoa Hoi in the central province of Phu Yen (214 MW), BIM 2 in Ninh Thuan (250 MW), Ea Sup 1, 2, 3, 4, 5 in the Central Highlands province of Dak Lak (600 MW), and Van Ninh in the central province of Khanh Hoa (100 MW).

In its decision issued on Wednesday, the ministry (MoIT) clarified that the 142 projects had been commercially operational as of January 13. They were included in the scheme based on the Electricity Law, the Planning Law, the Investment Law, the Bidding Law, PDP VIII, and other relevant documents.

The move aligns with the government’s policy to address issues related to renewable energy projects.

The list of such solar power projects only comprises project names, capacities, and names of provinces where they are located. Specific project sites are mentioned in their investment proposals or pre-feasibility study reports.

Last year, the Government Inspectorate concluded that the MoIT had approved the inclusion of 154 solar power projects into the scheme without sufficient legal foundation. Of these, 123 were identified as the primary cause of energy source imbalances and wasteful use of social resources.

The government later agreed to remove obstacles for these 154 projects per a resolution passed at its November 2024 meeting. In a subsequent meeting on December 12, 2024, Prime Minister Pham Minh Chinh outlined the government’s general principles to resolve those projects’ difficulties, especially for those with no intent of violating regulations.

“We will not legalize violations, but create mechanisms to resolve these issues decisively,” the PM remarked, stressing the importance of avoiding wastes of social resources while maintaining investors’ confidence.

“Local authorities and businesses need to work together to resolve such issues. It is critical to strictly prevent corruption, bribery, and unfair practices, and those committing violations will be held accountable,” he added.

According to the MoIT, by the end of 2023, the capacity of renewable energy sources (wind and solar) reached 21,664 MW, accounting for approximately 27% of the country’s total capacity.

The cumulative electricity generation from renewable energy (wind, ground-mounted solar, and rooftop solar) in 2023 was approximately 27,317 million kWh, making up nearly 13% of the total electricity system.

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Removing legal barriers for eco-industrial park development

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1 hour ago

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March 16, 2025

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By 2030, 40-50 per cent of localities will have plans to convert existing industrial parks into eco-industrial parks, while 8-10 per cent of localities are determined to build new eco-industrial parks to attract investment.

According to data from the Ministry of Planning and Investment, by the end of 2023, the country had 416 industrial parks established, including four export processing zones, with a total natural land area of ​​about 129,900 hectares and a total industrial land area of ​​about 89,200 hectares.

Up to now, the system of industrial parks has been present in 61 out of 63 provinces and cities nationwide, becoming a key area attracting domestic and foreign investment projects and a destination for many leading world corporations.

In the new development trend, economic organisation models by territory are changing in development goals, and Vietnam is no exception.

At the same time, towards sustainable development, the requirement to build green industrial parks and convert existing industrial parks into ecological industrial parks is becoming an urgent need to adapt to development requirements.

An assessment report by the Ministry of Planning and Investment shows that in over 30 years of forming and developing industrial zones in Vietnam, up to now, the development of industrial zones in width is facing difficulties due to the limited resources of labour, land, and resources. Labour productivity and resource exploitation efficiency are low, not ensuring harmony between economic development, environmental protection and social security.

This process also faces difficulties as tax and land incentives are gradually decreasing. The linkage and cooperation in industrial production in industrial zones and economic zones are still limited.

According to the plan, by 2030, 40-50 per cent of localities will have plans to convert existing industrial parks into eco-industrial parks, while 8-10 per cent of localities are determined to build new eco-industrial parks to attract investment.

A survey by the Institute for International Investment Studies (ISC) shows that the demand for attracting investment capital to fill the remaining area of ​​Vietnam’s planned industrial parks is about 600-650 billion USD. The total investment capital for infrastructure development and filling industrial parks is about 650-700 billion USD.

In addition, the demand for investment capital for technological innovation in enterprises in industrial parks and restructuring and converting 293 existing industrial parks into ecological industrial parks, to realise the green growth target according to the commitment of the Vietnamese Government to the international community, is also very great.

According to the Vietnam Industrial Park Finance Association, the implementation time of an industrial park infrastructure investment project can last more than three years, even five years, because of many difficulties and obstacles in the legal framework and site clearance, especially investment in the model of new industrial parks and ecological industrial parks.

Dr Ngo Cong Thanh, Vice Chairman of the Vietnam Industrial Park Finance Association, said that attracting investment to develop economic zones and industrial parks is showing limitations that must be overcome.

The planning and development orientation of industrial parks and economic zones still lacks a comprehensive vision and long-term perspective. They are still spread out across administrative boundaries, lack industry and regional linkages, and the quality and efficiency of investment attraction have not met the requirements for in-depth development.

In addition, localities and investors developing infrastructure for domestic industrial parks still prioritise attracting investment to fill in, not paying attention to the industry structure, technology, and environmental and social factors of investment projects, so the efficiency of investment in developing industrial parks has not met the requirements.

On the other hand, due to limited financial capacity, investors in industrial park infrastructure still have the mentality of waiting to find secondary investors before investing in shared infrastructure in the industrial park while foreign investors want to have land and technical infrastructure immediately before deciding to invest. This is one of the reasons why many industrial parks have low occupancy rates.

To mobilise large capital sources for investment in industrial parks and economic zones in the coming time, Dr Ngo Cong Thanh said there should be fundamental changes in attracting capital flows, creating conditions for investors to easily access production factors and innovate investment promotion activities.

In addition, legal issues regarding the formation and development of ecological industrial parks, and converting existing industrial parks into ecological industrial parks, need to be legalised or specifically guided, encouraging investors to participate in developing industrial park infrastructure.

Every year, the amount of foreign direct investment (FDI) in industrial parks and economic zones accounts for 60-70% of the FDI capital attracted nationwide, and this rate is still on the rise. This shows that industrial parks play a very important role in foreign investment cooperation activities in Vietnam. The trend of foreign investment in Vietnam in the coming time will focus mainly on industrial parks and economic zones.

Dr Phan Huu Thang, Chairman of the Vietnam Industrial Park Finance Association

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SAM to develop $1.5 bln data center in southern Vietnam

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2 hours ago

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March 16, 2025

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Ho Chi Minh City-based fund Saigon Asset Management (SAM) has launched a $1.5 billion data center project in the southern province of Binh Duong, aiming to capitalize on Vietnam’s growing demand for digital infrastructure.

SAM will partner with the Vietnam Singapore Industrial Park (VSIP), a Singapore-backed major industrial park developer, to implement the project, called the SAM DigitalHub.

The data center, with a designed capacity of 150 MW, will cover 50 hectares at the VSIP and is expected to begin operations in two years. Once completed, it will be the biggest data center in Vietnam.

The Vietnam-Singapore Industrial Park I in Binh Duong province, southern Vietnam. Photo courtesy of VSIP.

The Vietnam-Singapore Industrial Park I in Binh Duong province, southern Vietnam. Photo courtesy of VSIP.

SAM is seeking potential investors, including local banks, to finance the project, SAM’s CEO Louis Nguyen said.

Recently, SAM debuted the $300 million Vietnam Data Center Fund (VDCF) to prepare for the project, with the first closing scheduled by Q4 this year.

According to a report by Cushman & Wakefield, Vietnam’s developing data center capacity is approximately 92 MW, with an average construction cost of $6.9 million per MW. To meet future demand, the country will need to attract around $640 million in investment over the next five to seven years.

Vietnam’s data center market is still in its early stages, with the lowest population-to-MW ratio in the Asia Pacific region (1.83 million people per MW). However, with a population exceeding 100 million and an average GDP growth rate of 6.25%, the market presents significant growth potential in the coming years, said Trang Bui, country head of Cushman & Wakefield Vietnam.

To support long-term growth, the Vietnamese government should continue improving its digital infrastructure, including terrestrial and submarine cable connectivity, ensuring reliable and uninterrupted power supply, and fostering a policy framework conducive to data center expansion, she suggested.

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