An Economic Overview of Ba Ria – Vung Tau Province
Ba Ria – Vung Tau (BRVT), situated in the southern key economic zone, is one of the major economies and investment destinations in Vietnam. The region contributes close to eight percent to the national GDP and over 10 percent to the government’s revenues. The rapid economic growth in the last decade has led the province to have one of the highest GDP per capita and the third highest living standard in Vietnam.
Economy and trade
During the first six months of 2018, the region’s gross regional domestic product (GRDP) grew by seven percent, while its State budget contribution reached US$1.6 billion (VND 37 trillion). Industry and construction contributed the majority, followed by the services sector and agriculture, forestry, and fishery.
In the first six months of 2018, industrial production (excluding oil and gas), which accounts for a major share in the province’s economy grew by 8.17 percent, compared to the same period last year.
The highest growth was witnessed in accommodation services, which grew by 13.15 percent during the same period. Retail sales increased by 11.26 percent.
In the logistics sector, port services grew by 12.96 percent, while transportation revenue, warehousing and transportation services increased by 8.02 percent.
In the agriculture, forestry, and fishery sector, fishery production grew the fastest at 4.4 percent, followed by agriculture and forestry at 4.27 and 1.21 percent respectively during the first half of 2018.
In addition to the aforementioned sectors, BRVT is also a major oil and gas production hub due to its huge reserves. The province accounts for around 93 percent of the country’s oil reserve and 16 percent of natural gas reserves. This has led to large-scale investments in industries such as petrochemicals, oil exploration, machinery, power generation, LPG, fertilizer, steel, logistics, and construction materials.
Excluding oil and gas, export turnover grew by 12.84 percent in the first half of 2018, while import turnover increased by 13.2 percent.
As of 2017, the province has 315 FDI projects with a total registered capital of US$27 billion. In addition, BRVT has also attracted 450 domestic projects with a total registered capital of more than US$11 billion.
Last year, FDI flow reached US$1.5 billion in 29 new and seven existing projects.
In the first seven months of 2018, BRVT emerged as the third largest destination of foreign investment, just behind Hanoi and Ho Chi Minh City. Total registered capital reached US$2.15 billion, accounting for 9.4 percent of the total FDI investment in Vietnam.
BRVT serves as a major trade gateway for Vietnam due to its proximity to industrial zones, port complex, major highways, and transshipment routes. Infrastructure investments in the province have not only increased connectivity within the province but also with neighboring economic hubs such as Ho Chi Minh City and Dong Nai.
BRVT is a major gateway for international shipments in Southeast Asia, due to the Cai Mep- Thi Vai port complex. The port system ranks among the major ports in the region and one of only 19 in the world capable of handling 190,000 deadweight tonnage (DWT) vessels.
Container ships from this port complex are capable of transporting goods to Europe as well as North America. In addition, the province is also around 70 km from Ho Chi Minh City’s Cat Lai port.
The government is also planning to increase investments in the development of terminals and road infrastructure to increase connectivity, efficiency, and port capacity.
The Tan Son Nhat International Airport in Ho Chi Minh City is less than 90 km from the province and around 70 km from the Cai Mep – Thi Vai port complex.
In addition, the new Long Thanh international airport which is under construction is only around 30 minutes from the port complex and 50 km from the province.
The province has access to major national highways such as National Highway 51 and National Highway 1A. In addition, expressways such as Ho Chi Minh – Long Thanh Dau Giay Expressway, Bien Hoa-Vung Tau expressway, and Ben Luc-Long Thanh highway (to open in 2020) further increase connectivity with the surrounding provinces.
Within the province, the connectivity between ports or industrial zones with the national roadway systems is supported by numerous regional highways, port roads, and industrial zone roads.
BRVT is home to 15 industrial parks, including nine which are operational with an average occupancy rate of 47 percent. There are currently 339 projects in local industrial parks, including 162 foreign and 177 domestic projects.
The locality is also home to two industrial parks that specialize in supporting industries, Phu My 3 and Da Bac.
The government aims to attract US$4 billion FDI by 2020. In order to meet its target, the provincial government plans on more investor-friendly reforms in areas such as granting of investment licenses, building permits, and customs to reduce clearance time. In addition to reforms, BRVT also plans on increasing investments in infrastructure, distribution networks, technology transfer, skill development, and funding for small and medium-sized enterprises.
The four key sectors promoted by the government include hi-tech industrial production, seaport logistics, tourism, and high-tech agriculture. Other areas of opportunities for investors include food processing, shipbuilding, traffic infrastructure, and metallurgy-mechanical engineering.