Vietnam’s Nam Dinh Province: Investment Opportunities in the Red River Delta
Northern Vietnam’s Nam Dinh province is among the emerging destinations for investment in Vietnam. In 2021, the locality attracted the highest amount of capital ever while also stepping up a remarkable 16 places in the Provincial Competitiveness Index 2021 (PCI). Here, Vietnam Briefing highlights the opportunities available for investors in the province.
Vietnam’s Nam Dinh province is located in the southern part of the Red River Delta region of northern Vietnam. It borders Ninh Binh province to the southwest, Ha Nam province to the northwest, Thai Binh province to the northeast, and the Gulf of Tokin to the southeast.
The locality also has an advantageous geographical location. Nam Dinh belongs to the economic triangle Hanoi – Hai Phong – Quang Ninh, 93km away from the capital Hanoi, 130km away from Noi Bai International Airport, and about one hour by road from the Hai Phong port.
|Nam Dinh Profile|
|Labor force||1 million|
|Number of FDIs||123|
|Registered capital||US$3.7 billion|
|Monthly income per capita||US$76.9|
Source: General Statistics Office (GSO)
Logistic infrastructure in Nam Dinh province, though yet to be fully developed, is diverse, including:
- A Trans-Vietnam railway, through the province, 42 km long, with six stations catering for transporting passengers and goods;
- A 72 km coastline and a river system consisting of four major national rivers: Red River, Dao River, Day River, and Ninh Co River flowing through 251 km;
- Nam Dinh river port with a wharf length of 500m along the right bank of the Dao River in Nam Dinh city, with a capacity of 200,000 tons per year;
- Hai Thinh seaport with a capacity of 3 million tons per year and will be upgraded to a general commercial seaport with a capacity of 4.5 million tons per year.
More recently, the province has begun the construction of a backbone road for marine economic development. Upon its completion, the road will connect the province’s marine economic zone with the Cau Gie – Ninh Binh Expressway and other economic and political centers in the region as well as connect with national highways 10, 37B, 37C, 21B, and coastal roads.
Labor is also an interesting feature of Nam Dinh province. In particular, the province’s labor force is abundant at around one million, with the labor force participation rate standing at 76 percent in 2020 (as per CEIC).
Noticeably, Nam Dinh has been among the top provinces leading the country in education and training for many years in a row, with four universities and seven colleges, providing thousands of highly-skilled engineers and workers every year.
Despite facing numerous difficulties imposed by the pandemic as well as global price hikes, last year, Nam Dinh enjoyed a GRDP growth of 7.9 percent – the top 11 highest growth in the country.
Also in 2021, the province’s industrial output value expanded by 14 percent while the export value rose 34.4 percent year on year to US$2,927 million. Nam Dinh’s total social investment jumped 15.5 percent to US$3.7 billion and has had the best economic performance so far.
In the first seven months of 2022, the province managed to maintain economic growth momentum, featured by GRDP growth of 9.69 percent, agricultural growth of 3.13 percent, and construction growth of 12.1 percent.
In 2021, Nam Dinh climbed 16 places from 2020, in the Provincial Competitiveness Index (PCI), one of the best results ever. Particularly, compared with previous years, time cost climbed by 45 places, access to land by 33 places, informal charges by 31 places, and legal and security institutions by 16 places.
These improvements show that Nam Dinh is progressing in speeding up administrative reforms and improving provincial competitiveness.
Over the 2016-2020 period, the province licensed 461 new investment projects; witnessed a solid increase in corporate establishments; simplified 210 administrative procedures, all of which were public and transparent; and promoted e-Government construction, which was ranked one of the seven best reformers of Level 4 administrative procedures nationwide by the Ministry of Information and Communications.
In the 2020 – 2025 term, the provincial authorities look forward to further proceed administrative reform, competitiveness improvement, and investment promotion as regular and continuous tasks of the political system.
These objectives are followed by separate resolutions and action programs on stepping up administrative reforms, raising competitiveness, promoting and attracting investment, and a higher PCI ranking in the 2021-2025 period (Resolution 04-NQ/TU dated June 18, 2021).
FDI and business environment
According to Vietnam’s General Statistics Office (GSO), as of 2021, Nam Dinh province was home to 123 FDI projects, with a total registered capital of US$3.7 billion.
Seven countries and territories have invested in the province, which are Australia, China, Hong Kong, Japan, South Korea, Saudi Arabia, and Singapore. The above projects are engaged in toy production, automobile spare part manufacturing, food processing, garment and apparel, trade and services, and thermal power generation.
Currently, the US$2.07 billion Nam Dinh 1 thermal power project is one of the largest build-operate-transfer (BOT) investment projects in Nam Dinh province, a joint venture between South Korea and Saudi Arabia. Covering 242.7 hectares in Hai Chau and Hai Ninh communes, the Hai Hau district’s coal-fired thermal power plant has an output of around 1,109 MW.
More recently, in the first seven months of 2022, the province attracted three new FDI projects with the newly registered capital reaching US$9.72 million.
Besides, there are nine industrial parks in operation in the province with a total area of 2,003 hectares as of 2020. In addition, the province has started infrastructure construction in 159-ha My Thuan Industrial Park, 50-ha Thanh Coi Industrial Park, and 50-ha Yen Bang Industrial Park with a view to creating an available land fund for further investment.
Investment attraction for the province, in general, has expanded in both investment projects and value over the past few years, including a group of large projects invested by Xuan Thien Group at around US$4.2 billion, and My Thuan Industrial Park registered with US$70.5 million of investment capital.
The local government itself has also worked to provide a friendly and supportive business environment in the province. Investment procedures, for example, are processed at one focal agency and investors will not have to pay service charges, except the prescribed fees.
Investment projects in areas and fields eligible for investment incentives in the province’s IPs will be partly supported by expenses for site clearance and compensations, labor training, and building workers’ dormitories. The provincial authorities will also work with investors to study and submit to the Government special policies for large and important projects.
Opportunities in Nam Dinh Province
Nam Dinh has always been a historically significant province in Vietnam and is also home to Vietnam’s famous Phở. With a coastline of 74 kilometers and beautiful beaches, Nam Dinh has big potential for the development of the sea economy and tourism.
At present, there are 1,655 historical and cultural relics located in the province, that are popular among Vietnamese visitors. There are also another 70 craft villages based in the province, which include famous villages for wooden carving, bronze casting, as well as bonsai.
However, the province attracted only 6,000-7,000 foreign holidaymakers each year, according to the province’s Tourism and Sports Department’s Tourism Management Office.
The number of foreign visitors remained modest because the province has yet to have either five- or four-star hotels or tours attractive enough for domestic and international tourists. This is exactly where investors can inject capital to involve in the province’s highly-potential tourism industry and to gain market share at an early stage.
Nam Dinh is a locality with the foundation for the development of the pharmaceutical industry. The province is home to large pharmaceutical companies while many localities in the province have also developed quality drug-growing areas to supply large pharmaceutical enterprises across the country.
Nam Dinh province has all it takes to become a social and industrial hub in the future considering its geographical location, labor force, as well as local government incentives yet limited infrastructure, lack of institutional reforms, and land management, remain the key impediment to the province’s social and economic growth.
In order to foster higher growth, Nam Dinh province will need to focus on projects on maritime economic development, prioritize high-tech agriculture and attract investments in ecological urban areas.
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