China accounts for nearly 50% of new FDI projects in the wood industry.
The Report on the Activities of Foreign-Invested Enterprises in the Wood Industry in 2023, jointly conducted by the research team of Forest Trends and the Wood Associations, shows that in 2023, FDI investment projects in the wood industry increased in both quantity and investment capital in all three forms of investment including new investment, capital adjustment, and capital contribution to buy shares.
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| China leads in number of new investment projects in wood industry in 2023 |
Accordingly, with new investment, the number of projects and new capital increased by more than 2 times and 3.3 times respectively compared to 2022. In 2020, the wood industry received 63 new projects with 372.68 million USD, down 36.4% in the number of projects and 48.7% in investment capital compared to 2019. In 2021, the number of new investment projects in the industry continued to decrease, receiving only 35 projects with a capital of 332.84 million USD, down 44.4% in the number of projects and 10.7% in investment capital. In 2022, the number of new investment projects received only 28 projects with a capital of 90.25 million USD, down 20% in the number of projects and 72.9% in capital. In 2023, the wood industry received 57 new investment projects, with a capital of 300.06 million USD.
In 2023, 12 countries and territories invested in new projects in the wood industry, however, the investment capital was mainly concentrated in countries/territories such as China, Singapore, Japan, Hong Kong (China) and Seychelles. Notably, in 2023, the Netherlands was a new country on the list of countries/territories with large investment capital.
Specifically, with 28 investment projects with an investment capital of 106.63 million USD, China accounts for 49.1% of the number of projects and 35.5% of the total foreign investment capital in the wood industry in 2023. Singapore with 7 new projects with a capital of 35.28 million USD, accounts for nearly 12.3% of the number of projects and 11.8% of the investment capital. Hong Kong (China) with 5 new projects, an investment capital of 23.21 million USD, accounts for 8.8% of the number of projects and 7.7% of the total investment capital.
Seychelles with 4 new projects; Japan with 4 new projects; the United States with 3 projects; the Netherlands with 1 project. In addition, in 2023, Vietnam will also receive new investment capital from countries/territories such as: Taiwan (China); Marshall Islands.
The average investment capital scale of each new FDI project in 2023 will reach about 5.26 million USD/project, an increase of 1.6 times compared to before.
Of which, Japan has the largest average investment capital per project, reaching over 11.2 million USD/project. Taiwan (China) ranked second with an average capital of 8.25 million USD/project. Seychelles ranked third with an average capital of 5.5 million USD/project. Singapore ranked fourth in terms of investment capital per project, reaching 5.04 million USD/project. Hong Kong (China) had an average investment capital of over 4.64 million USD/project. The Netherlands had 1 project with an investment capital of nearly 31.99 million USD. Although China is the country with the highest number of investment projects, the average capital per project is only 3.81 million USD/project.
In 2023, the number of projects contributing capital to buy shares reached 36 times, with a total contributed capital of 139.83 million USD, an increase of 9.1% in the number of times and 27.1% in the contributed capital compared to the same period in 2022.
There are 9 countries and territories with capital contribution projects to buy shares in the wood industry in 2023, concentrated in countries/territories such as China, Taiwan (China), Singapore and the United States. These are also the countries/territories leading the list of capital contribution to buy shares in 2023. In 2022, the average capital contribution to buy shares was about 3.33 million USD/time, an increase of 7.3 times compared to the average capital contribution for a project in 2021 (0.45 million USD). By 2023, the average capital contribution to buy shares increased to 3.88 million USD/time, an increase of 1.2 times compared to the previous year.
In 2023, 10 countries/territories adjusted investment capital in wood industry projects, with 35 times, reaching 57.24 million USD, an increase of 16.7% in the number of times and 7.8% in capital compared to 2022.
FDI enterprises still account for nearly half of total export turnover.
In 2023, Vietnam will have 4,508 enterprises participating in direct exports with a turnover of over 13.18 billion USD. The number of FDI enterprises participating in exports is 706, accounting for 17.4% of the total number of exporting enterprises, down 0.8% compared to the number of FDI enterprises participating in exports in 2022. The export value of these FDI enterprises reached nearly 6.25 billion USD, down 18.3% compared to the previous year, accounting for 47.4% of the total export value of wood and wood products of the whole country.
In 2023, FDI enterprises with capital from China, Taiwan (China), the British Virgin Islands, Singapore and Japan led in export value. The total export turnover of FDI enterprises from the above 5 countries/territories reached 4.75 million USD, accounting for 76% of the total export turnover of the FDI sector.
The FDI enterprise sector is one of the important driving forces of economic development with important input factors for development such as capital strength, management level, technology and market access. The Government also expects that over time, these input factors will spread to the Vietnamese enterprise sector.
Foreign direct investment (FDI) has become an important component of the wood industry. The number of FDI enterprises participating in the industry and the export turnover of this sector have always had stable growth in recent years.
However, the current performance of FDI enterprises in the wood industry shows something worth pondering for the Vietnamese wood industry. Accordingly, the number of FDI enterprises participating in direct export is small but the wood export turnover is very large. This shows the superiority in the export stage of this sector compared to the domestic enterprises. This advantage can come from many factors such as production/investment scale, management level, technology, market access, etc.
Mr. Tran Le Huy – Vice President of Binh Dinh Timber and Forest Products Association (FPA Binh Dinh) – commented that, to date, the connection between FDI enterprises and Vietnamese enterprises is still limited. The Government and wood associations need to promote the formation of appropriate institutional and policy environments to encourage the formation of connections between FDI enterprises and Vietnamese enterprises. This connection should also include stronger and more practical participation of FDI enterprises in policy discussions related to the development of the industry. The implementation of these will contribute to promoting the sustainable development of Vietnam’s wood industry in the future.
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