Hai Phong: Vietnam’s Rising Star on the Investment Horizon

Located in northern Vietnam, Hai Phong is a major port city, a leading industrial hub, and one of the nation’s fastest-growing economies. Its strategic location, modern infrastructure, government incentives, and commitment to sustainable growth make it a highly attractive investment destination.

Foundations of Hai Phong’s Appeal

• Dynamic Growth: Hai Phong consistently ranks among Vietnam’s top two cities in GRDP growth. In 2021, GRDP reached US$13.58 billion, up 12.38% year-on-year, despite global disruptions.

• Multimodal Connectivity As the North’s only city with five transport modes (sea, rail, road, air, inland waterway), Hai Phong is a key trade gateway and logistics hub.

• Industrial Powerhouse: Industry and construction dominate the economy, growing 19.04% in 2021. Hai Phong is a major manufacturing center attracting global players like LG, Bridgestone, and Pegatron.

• Focus on High-Tech: Hai Phong prioritizes investment in high-tech industries, positioning itself for future-focused growth.

Agriculture, Forestry, and Fisheries: Untapped Potential in Hai Phong

While Hai Phong’s focus is primarily on industry, its natural resources and proximity to major markets offer opportunities for investment in:

• High-Value Aquaculture: Hai Phong’s coastline and brackish water resources support expansion of:

  • Shrimp Farming: Focus on sustainable practices, disease prevention, and value-added shrimp products (processed, ready-to-eat).
  • Catfish: Expand intensive farming methods for high yields, while ensuring environmental responsibility and export standards.
  • Marine Fish Species: Explore the potential for species like seabass and grouper, catering to growing domestic and regional demand.

• Aquaponics and Integrated Systems: Combining aquaculture with hydroponic vegetable cultivation creates a highly efficient, closed-loop system, ideal for urban and peri-urban settings within Hai Phong. These systems can attract investment focused on food security and sustainability.

• Niche Horticulture: Hai Phong’s diverse microclimates may be suitable for:

  • Tropical Fruits: Mango, avocado, and less-common varieties targeting domestic and export markets.
  • High-Value Herbs and Spices: Cater to growing demand for fresh, locally sourced ingredients for the food industry and hospitality sector.

• Sustainable Forestry: Hai Phong’s inland areas may possess land for responsible forestry projects, including:

  • Eucalyptus Plantations: Supply for pulp, paper, and wood-product industries.
  • Eco-Tourism Forestry: Develop forest areas in conjunction with low-impact tourism, generating revenue while preserving natural assets.

Government Support & Incentives

Hai Phong’s government promotes investment in these sectors to diversify its economy and ensure sustainable development:

• Land Availability: The city may designate specific zones for agricultural, forestry, and aquaculture projects.
• Financial Incentives: Eligible ventures in these areas could qualify for tax benefits, preferential loans, and investment support programs.
• Technology Focus: Hai Phong encourages projects that incorporate modern technologies like precision aquaculture, closed-loop farming, and resource-efficient forestry.
• Market Access: Collaboration with local distributors and logistics providers can help businesses tap into Hai Phong’s growing domestic market and access export channels.

Foreign Direct Investment (FDI) Magnet

• FDI Success: Hai Phong ranks sixth nationwide in FDI attraction, with US$24.15 billion in committed capital. Key investors hail from Japan, South Korea, China, the EU, US, and Taiwan.

• Ambitious Target for 2022: Hai Phong aims to secure an additional US$2.5 – 3 billion in FDI this year.

• Dinh Vu – Cat Hai Economic Zone: This major economic zone offers attractive incentives, including corporate income tax breaks and import/export duty exemptions.

Infrastructure: Driving Investment

Hai Phong is investing heavily in infrastructure upgrades to boost its appeal:

• Bridges for Connectivity: 100 new bridges (US$3.6 billion investment) will enhance logistics and regional integration.

• Lach Huyen Deep-Sea Port: Expanding to handle 100,000DWT vessels, facilitating direct US and EU trade.

• Key Expressways: The Hanoi – Hai Phong and Hai Phong – Ha Long expressways, when complete, will link the city seamlessly to major economic centers in the North.

Ideal for “China Plus One” Strategies

Hai Phong offers a compelling alternative or addition to China-based manufacturing:

• Competitive Production Base: Manufacturing costs, skilled labor, and favorable business environment create advantages.

• Proven Success: Companies like Tesa (Germany) have adopted the “China Plus One” strategy, establishing their operations in Hai Phong.

Governance and Growth: Hai Phong’s Advantage

• Business-Friendly Province: Hai Phong ranked 2nd in the 2021 Provincial Competitiveness Index (PCI), highlighting a pro-business environment.

• Manufacturing Strength: The Industrial Production Index (IPP) surged 18.15% in 2021, demonstrating industrial dynamism.

The Hai Phong Opportunity

With its strategic location, infrastructure investment, industrial focus, favorable FDI policies, and robust growth trajectory, Hai Phong presents a highly promising investment landscape in Vietnam. Companies seeking to expand in Southeast Asia, diversify their supply chains, or participate in Vietnam’s manufacturing boom should give Hai Phong serious consideration.

Originally posted 2024-03-09 16:49:37.