Thua Thien Hue: An Emerging Investment Destination

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Central Vietnam is becoming increasingly popular with foreign manufacturers. Thua Thien Hue, in particular, has drawn the attention of a number of international firms. In this article, Vietnam-Briefing looks at why that is.


Thua Thien Hue, a well-established province in central Vietnam, stands out as an appealing investment destination due to its cost-effective labor and enticing incentives. The province boasts numerous industrial zones, well-developed infrastructure, and seaports. It is also in an advantageous position at the gateway to the Mekong sub-region and East Asia, strategically located between the North and South regions of Vietnam. This part of Vietnam is poised to play a crucial role in Vietnam’s trade and economy moving forward, and with this in mind, foreign firms looking for alternatives to the more well-known manufacturing hubs in Vietnam should consider Thua Thien Hue.

Economy

GRDP growth rate

In 2023, the People’s Committee of Thua Thien Hue Province reported that the GRDP reached US$3.04 billion, marking year-on-year growth of 7.03 percent. The services sector played a pivotal role, making up 48.84 percent of the GRDP, driven by the recovery of the tourism industry. Additionally, the industry and construction sector contributed 31.93 percent, while the remaining portion stemmed from the agriculture, forestry, and fishery sector.

vn88 proLiên kết đăng nhập Cities/province 2020 2021 2022 Thua Thien Hue 193 211 244 Hanoi 295 321 369 Hai Duong 242 266 302 Hai Phong 236 256 293 Long An 268 289 341 Ho Chi Minh City 246 250 283 Binh Duong 354 313 379

Industrial parks in Thua Thien Hue

Thua Thien Hue has established a conducive regulatory framework to attract foreign investors and businesses, offering legal support in navigating administrative procedures. This is to ensure transparency for businesses looking to enter the market and to improve infrastructure to meet the needs of investors. Specifically, in 2022, Nguyen Van Phuong Chairman of the Provincial People’s Committee approved the establishment of 4 special inter-sectoral working groups focused on investment promotion and support. These groups, led by People’s Committee leaders, are tasked with overseeing and expediting the implementation of projects in Thua Thien Hue. Their responsibilities include directing, inspecting, supervising, and resolving issues related to the acceleration of project execution and investment disbursement. The groups also engage in research on legal regulations, proposing solutions to promptly seize investment cooperation opportunities. They also suggest strategies to approach and attract potential investors to key sectors and projects within the province. Recognizing the province’s potential, numerous industrial park developers have set up businesses in Thua Thien Hue.

Sai Gon – Chan May Industrial Park and Non-tariff zone

Developed by Sai Gon Hue Investment JSC, a member company of Sai Gon Investment Group and a prominent private group specializing in the investment and development of Industrial–Urban –Service complexes, the Sai Gon–Chan May Industrial Park and Non-Tariff zone is a part of the Chan May–Lang Co Economic Zone, covering a total area of 322.3 hectares.

vn88 proLiên kết đăng nhập Name District Classification Investment incentives       CIT rate (%) CIT exemption (number of years) 50% CIT reduction (number of years) Import tax exemption Sai Gon – Chan May Phu Loc District Economic Zone 10 for 15 years 4 9 Yes for fixed assets Phong Dien Phong Dien District Areas of difficult socio-economic conditions 17 in 10 years 2 4 Yes for fixed assets Gilimex Thua Thien Hue Huong Thuy Commune Areas of difficult socio-economic conditions 17 in 10 years 2 4 Yes for fixed assets

Developing infrastructure

Thua Thien Hue, located in central Vietnam along the East-West economic corridor, the province enjoys a strategic position with an 81km border with Laos and a 120km coastline. Recognizing this advantage, the government has made substantial investments in transportation and logistics infrastructure with the view to positioning the region as the most efficient and direct gateway to the Mekong sub-region and East Asia.

Chan May Deep-water seaport

Located in central Vietnam, Chan May Deep-water Seaport is the first-ranked seaport in Vietnam. It serves as the primary gateway to the East Sea for the Eastern-Western Economic Corridor, linking Central Vietnam to Northeastern Thailand, Laos, and Myanmar. Annually, Chan May seaport handles about 3.5 million tons of bulk cargo, including coal, clinker cement, wood chips, sand, and tapioca starch. The port can accommodate 50,000 DWT cargo ships, container ships of up to 2,600 TEU, and passenger cruises of 225,282 GRT. On July 24, 2023, Deputy Prime Minister Tran Hong Ha signed Decision No. 886/QD-TTg, which approves plans, policies, solutions, and resources for implementing the Master Plan for developing Vietnam’s seaport system from 2021 to 2030, with a vision extending to 2050. As part of this plan, Chan May seaport is set to undergo expansion to 702 ha, with a proposed investment of VND750 billion (US$31.25 million) allocated for the construction of port breakwaters in phase 2.

La Son-Tuy Loan Expressway

La Son–Tuy Loan Expressway passing Thua Thien Hue province and Da Nang city is a key component of the North-South Expressway project connecting 63 provinces and cities across Vietnam. The La Son–Hoa Lien section has been operational since 2022. However, following 18 months of operation, the Prime Minister has approved capital allocation for research and investment to upgrade the La Son–Hoa Lien section. This expansion aims to achieve a roadbed width of 23 meters and introduce four lanes for vehicles. The Hoa Lien–Tuy Loan section, sanctioned in the second phase of the North-South Expressway, is scheduled for construction in August 2023, targeting operational status by 2025. The initial phase will involve the construction of a four-lane box with a roadbed width of 22 meters and a road surface of 14 meters.

Phu Bai International Airport

Situated along National Highway 1A, Phu Bai International Airport plays a crucial role as a central airport for the region, serving as a gateway to East Asia and other ASEAN countries. Since 2023, the airport has undergone a tremendous upgrade, including the addition of a second terminal with the capacity to accommodate 5 million passengers annually. This expansion aims to serve 2,500 passengers during peak periods, to attract more tourists and alleviate pressure on the existing T1 terminal.

Investment landscape

Seeing the potential in Thua Thien Hue, investors from various countries and industries have selected the province as their preferred investment destination. In the annual meet-up with foreign investors in Thua Thien Hue province, Phan Quy Phuong Vice Chairman of the People’s Committee shared that in 2023, Thua Thien Hue granted 11 new investment registration certificates for foreign investment projects, totaling US$141.7 million in investment capital. The province currently hosts 126 foreign direct investment projects, with a cumulative registered capital of US$4.5 billion. The FDI sector plays a significant role, contributing over 10 percent to the province’s GRDP and 36.8 percent to the provincial budget. Thua Thien Hue traditionally recognized for its vibrant tourism sector, also has several major FDI projects. These include:

Laguna Lang Co

Laguna Lang Co stands as Singapore’s Banyan Tree’s first international resort project in Vietnam. Positioned adjacent to Lang Co Bay within the Chan May Economic Zone, the resort is surrounded by a 3-km-long coastline, offering direct views of the East Sea. Construction of the resort started in 2008 on a vast 280-hectare parcel of land, with a capital investment of US$875 million featuring hotels, spas, an 18-hole golf course, a comprehensive shopping center, independent villas, and high-end residential areas. In 2018, Banyan Tree increased its investment capital to US$2 billion, aiming to introduce casino services to the resort. Accordingly, the project will complete basic construction and commence full operation in 2026.

Aeon Mall Commercial Center

Following the visit of Emperor Akihito and Empress Michiko to celebrate Vietnam–Japan diplomatic relations, Aeon Group started construction on the Aeon Mall Hue Commercial Center, located in the heart of Hue City. The establishment of Aeon Mall Hue is anticipated to play a pivotal role in advancing the socio-economic development of Thua Thien Hue. In addition to its historical and tourism significance, Thua Thien Hue is also an appealing destination for global manufacturing investors. Notable manufacturing FDI projects in Thua Thien Hue include:

Huda Beer

Founded in 1990, Hue Beer initially operated as a local beer producer. Four years after its founding, the company entered a joint venture with the Carlsberg Group, prompting a rebranding to Huda Beer. In 2011, Carlsberg Group acquired the remaining 50 percent of Huda Beer’s capital, transforming it into a wholly foreign-owned enterprise. Over the years, Huda Beer has consistently played a substantial role in contributing to Thua Thien Hue’s budget and serves as a key sponsor for the Hue Festival held every two years.

Scavi

Scavi Group, a subsidiary of Financière B’Lao–the world’s leading outsourcing servicer in the lingerie-swimwear industry–first entered Vietnam’s market in 1988. In 2005, Scavi selected Thua Thien Hue as its investment destination and as of today, Scavi operates three factories in Phong Dien Industrial Park, employing over 6,300 workers with an average salary of VND 6.2 million (US$258).

Kanglongda

In 2019, Chinese investor Kanglongda–specializing in manufacturing disposable gloves for the electronics and medical industries–chose Thua Thien Hue as its manufacturing hub. The company plans to establish a factory and a research center for disposable gloves, polyethylene fibers, and multifunctional labor protection gloves, with investment capital of nearly VND 5,000 billion (US$208.3 million). Upon full operation, the project is expected to create job opportunities for approximately 1,500 workers, contributing an estimated annual VND220 billion (US$9.2 million) to the budget.

Conclusion

Thua Thien Hue is strategically positioned to emerge as Vietnam’s next economic hub. Investors aiming to enter the Vietnam market should consider the province’s business-friendly policies, investment incentives, and competitive labor rates when deciding where to establish their operations. They should also consult with the expert at to get a more detailed and complete understanding of all Thua Thien Hue has to offer.

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