Invest in Vietnam, but where? Binh Duong provides a good answer
In our previous publication, BDG revealed the ranking of provinces in Vietnam that attract the most foreign investments by the end of November 2016. Among those, Binh Duong ranked second with $1.93 billion in the total amount of foreign investment capital.
Binh Duong - reasons to invest
1. Strategic geographic position
Located in the southeast of Vietnam, Binh Duong possesses a golden geographical spot as it is considered the trade gateway between the three Vietnam’s key economic regions: the Southeast, Mekong Delta and Tay Nguyen (Central Highlands). With its favorable position, Binh Duong has a close access to the main traffic routes in Vietnam such as Highway 13, Ho Chi Minh road, Asian Highway 1 and ring roads number 3 and 4. The province is also only one hour away from Tan Son Nhat international airport in Ho Chi Minh City and 1.5 hours away from the nearest sea port. All of these facts lead to two important benefits for investors: great transportations and dynamic trading activities.
2. Favorable terrain for setting up factories
As it is located in the transition zone between the southeast and the Mekong Delta, Binh Duong’s terrain mostly consists of low hills with a flat and solid ground. This factor not only allows quick and simple factory set up but also ensure the safety of the workers in the long run. Furthermore, situated inland, Binh Duong is rarely affected by natural disasters such as storms, floods or soil erosion. Therefore, the stable terrain conditions play a key role in reducing the risks for investors to set up factories in Binh Duong.
3. Great labor force conditions
Abundant employees, low cost and high productivity are the three key characteristics of the workforce conditions in Binh Duong. Statistics show that Binh Duong population in 2014 reached 1.9 million and is expected to extend to 2 million in 2016. Among those, 76% are within the working age. The proportion of trained workers in 2014 reached 68% and is expect to grow to 80% in 2020. In term of labor cost, this is considered to be one of the Vietnam’s main competitive advantage as compared to other Asian countries’ (Figure 1). As a result, there are a large number of workers who are trained and are willing to work at a low cost.
Figure 1: Comparison of average monthly wages in Asian Countries in 2013
Source: International Labour Organisation (2014)
4. Supporting local authorities
Other than the readily available factors as mentioned above, one of the key elements that makes Binh Duong stand out from the other provinces lies at its supporting local authorities. Binh Duong local authorities have always been actively encouraging and supporting enterprises to invest through frequent meetings with investors to discuss various investment opportunities and to promptly resolve any emerged issues. Administrative reform was implemented radically at all levels and sectors to ensure the transparency and accessibility of information for citizens, enterprises and investors, which consequently helps to create the most convenient environment for businesses to grow. For instance, an administrative center was established in order to support enterprises with administrative procedures, in particular with providing investment certificates, land use right certificates and construction permits.
Binh Duong is always dynamic, "dares to think and dares to do." said by Mr. Tran Thanh Liem, Vice Chairman of the provincial People’s Committee of Binh Duong. The provincial government has made positive solutions in exploiting the resources economically and modernizing infrastructure system. Investment capital from the State budget is used more efficiently, as a "push" or "seed capital" to create a range of high-quality roads, hospitals, schools, electricity, postal and telecommunications, urban areas, and residential areas. By spending $2.5 billion as social expenditures, Binh Duong not only aims to generate better conditions for enterprises to operate but also to improve the living standards of their workers.
Impressive results
By the end of November 2016, Binh Duong has attracted $1.93 billion worth of FDI from 26 countries and territories. Among those, Singapore took the lead with 7 new projects and a total added capital of $84 million from 8 implemented projects. This is followed by Korea ($149 million), and Japan ($85 million).
The most notable recent projects in Binh Duong include the establishment of the Singaporean Uniben factory for processing and preserving fruits and vegetables. The establishment of factories for producing and processing coffee of Fovolin Global Trading Pte. Ltd; the road vehicles and accessories manufacturing project of Kingstar Technology, etc. This has added up to the total number of 2700 FDI enterprises and $24.75 billion in the foreign invested capital that Binh Duong has gained over the years.
Sources: 1, 2, 3