Last update: 15:30 | 15/03/2017
VIR updates on all the new developments at the billion dollar projects licensed between 2006 and 2016 that were valid as of February 2016. Projects that were finished and have seen no new developments are omitted.
1) $1.1 billion Posco project in Ba Ria-Vung Tau
Licensed in 2006, the project aimed to build a steel plant on an area of 130 hectares. The plant is going to operate for 48 years, producing cold and hot rolled, as well as galvanized steel items. The first phase of the plant was completed in 2009 at a cost of $340 million and now has a total capacity of 700,000 tonnes per year.
In September 2016, the Government Inspectorate requested the Chairman of Ba Ria-Vung Tau People’s Committee to review the licenses for four steel projects in the province because they are not included in the government’s master plan on steel development.
The Posco project is one of these, besides the ones by Fuco Steel Corporation Ltd., Vina Kyoei Steel Co., Ltd., and China Steel Sumikin Vietnam Joint Stock Company.
2) $1 billion Intel project in Ho Chi Minh City
Intel Corp first announced its $300-million investment for an assembly and test plant in Vietnam in 2006. The firm’s total registered investment was raised to $1 billion during the following year.
The $1 billion plant in Ho Chi Minh City went into operation in 2010. In November 2014, the company expanded the plant with an additional CPU production line.
At the beginning of 2016, there were some rumours that Intel Corporation’s operation in Ho Chi Minh City will be stopped. Instantly, the representative of Intel rejected this rumour. Nevertheless, Intel confirmed its plan of sharply cutting the number of staff from October 2016.
3) $6.2 billion Nghi Son Refinery in Thanh Hoa
Invested by four companies, namely PetroVietnam, Kuwait Petroleum International, and Japanese companies Idemitsu Kosan and Mitsui Chemicals, the refinery was licensed in 2008. With an area of 400 hectares, the refinery produces LPG, Ron 92 and 95 fuels, diesel, fuel oil, jet fuel, polypropylene, para-xylene, benzene, and sulphur.
The investors raised the capital by $2.8 billion in 2013 to make the refinery the biggest oil refinery and petrochemical project ever licensed in the country. It is scheduled to become operational in 2017 and reach its maximum annual capacity of 9.62 million cubic metres of petroleum products by 2018.
At the end of 2016, the project was 94.4 per cent complete, behind schedule because the contractor had not achieved the deadline as specified in the EPC contract.
Besides, Nghi Son Refinery may not be eligible for the preferential selling price negotiated with PetroVietnam. The reason is that its products do not meet the Euro 4 standards and the water supply is neither clean nor enough.
4) $4.3 billion New City in Phu Yen
The project, licensed in 2008, is an investment of the Brunei-based New City Properties Development. Occupying an area of 560 hectares, the project was supposed to include a resort, hotel, villas, bungalows, a cruise port, and various sea entertainment facilities. However, the project was coming along rather slowly.
In September 2014, the People’s Committee of Phu Yen allowed the investor to reduce the project area to 357 hectares and the investment capital to $1 billion.
Sun Rise Vietnam, a joint venture between South Korean companies Hyundai Telecom and Hwa Pyung Holding, now holds 70 per cent of the project. The remaining stakes are held by companies from China, the US, and Australia.
In June 2015, New City Vietnam Ltd. held the project’s ground breaking ceremony. Local authorities expect the project to become a highlight of the province and a major tourist attraction.
In the first quarter of 2017, the project is still being constructed, however, due to unfavourable weather conditions, it is behind schedule.
5) $4.2 billion Ho Tram project in Ba Ria-Vung Tau
The Grand Ho Tram Strip Hotel was licensed in 2008 and is developed by Ho Tram Project Co., Ltd., majority owned by US fund Harbinger Capital Partners. The first phase of the five-star fully integrated resort opened in July 2013. This is the first resort in Vietnam with permission to operate a casino on its premises.
In December 2015, Ho Tram Project Co., Ltd. signed an agreement with Vietnamese company CotecCons to erect condo towers on a 164-hectare area of the project site.
In July 2016, the developer proposed the plan of a specialised airport to transport tourists to the complex and the Ba Ria-Vung Tau People’s Committee has agreed in principle to the construction of the airport in Loc An Commune.
However, according to the 2020-2030 air transportation development plan approved by the Prime Minister, Ba Ria-Vung Tau will only have two airports (in Vung Tau and Con Dao), so the project will need to secure approval from the Ministry of Defence and the Ministry of Transportation before the company can request the government to adjust this plan.
6) $2 billion Nhon Trach Berjaya Dong Nai New City in Dong Nai
Licensed in 2009, the project is located on a 600-hectare site in Dong Nai Province, about 25 kilometres from downtown Ho Chi Minh City. It will house a theatre, cultural house, square, exhibition centre, museum, administrative quarter, and commercial and social facilities, such as offices, hotels, serviced apartments, food and beverage outlets, and entertainment spaces, a sports centre, hospital, and open green spaces.
Developer Berjaya Land Bhd., a subsidiary of Berjaya Corporation Berhad, stated in October 2015 that the construction of the project will begin in 2016.
2016 has passed and the project is still idle, like a number of other Berjaya projects in Vietnam. Yet in October 2016, Berjaya met with the authorities of Danang, an attractive tourism city, to show interest in building a resort and shopping mall complex in the city centre.
7) $4 billion South Hoi An project in Quang Nam
South Hoi An project, a complex including a residential and a commercial area, a resort, and various gaming facilities, was licensed in December 2010. VinaCapital and its closed-end fund VinaLand Limited planned to develop the project with Malaysian company Genting Berhad. However, in September 2012, Genting withdrew from the project, leaving VinaCapital to adjust the project plan in mid-2013, rescheduling the first phase to start operation by the end of 2015.
In September 2015, VinaCapital announced its newfound partnership with Hong Kong company Chow Tai Fook in the project. VinaCapital continued to be the strategic shareholder. Now the first phase is set to start construction in 2016.
Unfortunately, less than a year after the construction started, Chow Tai Fook chairman Henry Cheng took an abrupt leave due to unspecified illness, letting his heir Adrian take over the firm. At present, there is no information about the implications for the South Hoi An project.
8) $1 billion Kobelco steel plant in Nghe An
Licensed in 2010, Japanese Kobe Steel’s plant was to operate at a capacity of 2 million tonnes per year. The raw material for steel production would be sourced from Thach Khe Iron Mine in Ha Tinh and the coal from Quang Ninh.
As of October 2015, construction of the Kobelco steel plant had yet to start due to delays in the exploitation of Thach Khe Mine. According to a member of the People’s Committee of Nghe An Province, Kobe is working with Thach Khe Iron JSC, the owner of the mine, on a potential purchase of shares in the company. A VIR source commented that negotiations had been on-going for two years at the time and the two parties had yet to reach an agreement.
At the beginning of 2017, some experts urged Ha Tinh to facilitate Thach Khe Mine. It is hoped that when the Thach Khe project is green-lighted by authorities, the Kobelco project will also be implemented.
9) $902.5 million Skybridge Dragon Sea resort project in Vung Tau
Skybridge Dragon Sea MICE project, invested by US-based Skybridge Intercontinental Development Corporation, was Ba Ria-Vung Tau province’s largest project in terms of registered capital at the time of its licensing in 2010.
The project had been delayed for years. The delay, according to Skybridge chairman cum CEO Michael Nguyen, was due to the overly high land rental fees in the past few years. According to Nguyen, the rent specified by the province’s Department of Finance rose from VND325 billion ($14.6 million) in 2010 to VND1.7 billion ($76.2 million) in 2012 when the company was to start construction.
As of the end of 2016, the Ba Ria-Vung Tau authorities were looking for Michael Nguyen to officially revoke the project.
10) $2.26 billion Jaks Hai Duong thermal power plant
The 25-year BOT 2x600 MW project by Malaysian company Jaks Resources Bhd. was licensed in 2011. Preliminary construction work on the project has already started, with the land clearance and boundary walls completed.
In July 2015, Jaks Resources Bhd. inked agreements with China Power Engineering Consulting Group Co., Ltd. to jointly develop the plant through a 50:50 joint venture.
The project’s construction was kicked off in March 27, 2016. Since then, there was no progress. By the end of 2016, the Hai Duong People’s Committee was trying to find ways to urge the developer to continue with the project but there is no new development as of now.
11) $1.2 billion Tokyu Binh Duong New City
Licensed in 2012 and starting construction in the same year, Tokyu Binh Duong New City is a 1,000-hectare industry-service-urban complex in Binh Duong, invested by Becamex Tokyu Ltd.—a joint venture between Vietnamese company Becamex IDC Corporation and Japanese company Tokyu Corporation.
The Binh Duong authorities estimated that the total investment into the complex is going to exceed VND150 trillion ($6.7 billion) by 2020. Many domestic and foreign investors have built high-rise buildings and carried out low-price commercial housing projects in the province, but sales fall below expectations.
Over the two-year construction, SORA Gardens I, which consists of two 24-storey towers on an area of 10,000 square meters, was completed in 2015.
In 2016, another city house and city garden house project, called Midori Park, was opened for sales in New City. Besides, the developers have also erected several convenient stores, transportation facilities, etc., to serve citizens in New City.
12) $574.8 million Bridgestone radial tyre manufacturing plant in Haiphong
Licensed in 2012, the plant invested by Japanese tyre manufacturer Bridgestone started operation in October 2014. Currently, the plant boasts a capacity of 6,000 tyres a day. As of January 2016, in a meeting with Haiphong authorities, leaders of the company talked about the prospects of expansion and about selling its products in Vietnam, instead of producing purely for export.
At present, Bridestone has a range of dealers to distribute its products in Vietnam and has developed a range of Passenger Tire Care Service Centres in Hanoi, Haiphong, and Dongnai, among others.
13) $2.018 billion Vinh Tan 1 Thermal Power Plant in Binh Thuan
Licensed in 2013, the BOT plant is an investment of a consortium of two Chinese companies and Vietnam National Coal-Mineral Industries Holding Corporation Ltd. (Vinacomin). The plant is part of Vinh Tan Thermal Power Complex, which consists of four projects with a total capacity of 5,600 MW. This is the country’s largest coal-fired thermal power plant.
While Vinh Tan 1, 3, and 4 remain under construction, Vinh Tan thermal plant 2 has started operation in January 2014.
The operation of the plant sparked strong opposition from residents in the surrounding area on account of potential pollution hazards. Due to strong coastal winds, Vinh Tan Thermal Plant 2 is obscured by fumes and dust, despite efforts to regularly irrigate the area, as required by local authorities.
In April last year, thousands of people blockaded National Highway No. 1A, stopping traffic for hours to complain about coal dust and cinder from the power complex, especially the newly built Vinh Tan No 2.
The Binh Thuan People's Committee urged the power complex management board to stop all executive work when wind speed reaches above level 8 (88 km per hour).
At the end of 2016, Binh Thuan authorities stopped Vinh Tan 1 from pouring 1.5 million cubic metres of waste into the sea. As of January 2017, people living nearby still complained about the coal dust and cinder from the plant whenever wind blows heavily.
14) $1 billion Bus Industrial Center in Binh Dinh
Russian investor Bus Industrial Center Ltd.’s project was licensed in 2013, with a view to build a factory to produce spare parts for buses and provide related services.
Since licensed, the Russian project stood still and by April 2016, it was revoked.
15) $3 billion Samsung Thai Nguyen phase II
In 2014, Samsung received the license to invest $3 billion in the second phase of Samsung Electronics Vietnam Thai Nguyen Plant (SEVT 2), raising the facility’s total investment capital to $6.5 billion. SEVT 2 was designed with a capacity of 10 million products per month and to employ 30,000 workers. The project is currently being built.
16) $1.4 billion Samsung CE Complex Ho Chi Minh City
Licensed in October 2014, the construction of Samsung’s Ho Chi Minh City complex started in May 2015 on a 70-hectare area of Saigon Hi-Tech Park (SHTP). The complex is expected to come into operation in February 2016. SHTP has recently granted investment licences to several projects worth more than $120 million that will produce components for the complex.
In December 2015, Samsung received the investment certificate to expand the project by $600 million, bringing the complex’s total investment value to $2 billion.
Samsung will set up a research and development centre for audio-visual devices and provide warranty services at SHTP.
Samsung’s complex in Ho Chi Minh City was put into operation in June 2016.
17) $2.018 billion Duyen Hai 2 thermal power plant in Tra Vinh
Licensed in 2015 by Malaysian Janakuasa (Malaysia), the Duyen Hai 2 thermal power project is going to be built in a BOT format.
The project has two turbines with a total capacity of 1,200 MW. Construction is going to start in the second quarter of 2016.
The plant, which is expected to go on stream before 2020, will be one of the four thermal power plants in Duyen Hai Power Centre. The remaining plants, representing a $6 billion investment by Electricity of Vietnam Group (EVN), are Duyen Hai 1, Duyen Hai 3, and Duyen Hai 3 extension.
Once completed, the power centre will contribute to the national power grid an additional capacity of 30 billion kWh annually.
On August 3, 2016, the Malaysian investor broke ground for this project.
18) $1.2 billion Empire City in Ho Chi Minh City
The developer is a joint venture of Tien Phuoc Real Estate JSC, Tran Thai Real Estate JSC, and UK-based Denver Power Ltd. a subsidiary of multinational financial company Gaw Capital Partners with the two Vietnamese companies contributing 50 per cent of the capital.
Licensed in 2015, the project is expected to be completed in 2022. Occupying a 14.5-hectare area on the bank of the Saigon River, the project is going to include a trade centre, a five-star hotel, office space and apartments, and a multifunctional building of 86 floors.
Construction started in October 2015, and by February 2017, the foundation for the first tower had been constructed.
19) $1 billion Cheng Loong Binh Duong packaging plant
In December 2015, Taiwanese industrial paper producer Cheng Loong received the investment certificate to build its $1-billion packaging factory in the southern province of Binh Duong.
The plant is going to be built on an 80-hectare land plot in Ascendas Protrade Singapore Tech Park and will have the capacity to push out one million tonnes of industrial paper and consumer paper products per year.
Cheng Loong currently has 29 plants all around the world, providing supply packaging to big companies, such as Apple and Nike. The Vietnamese plant is Cheng Loong’s biggest ever, according to the company’s president Tsai Tong Ho.
At the moment, the plant is being built.
20) $1 billion Samsung Display Bac Ninh project
Licensed in 2014, Samsung Display project, which produces screens for mobile phones, started operation in March 2015. The project aims to supply the two Samsung plants in Bac Ninh and Thai Nguyen with screens and has a capacity of 48 million products per year. In August 2015, Samsung increased the project’s total investment volume by an additional $3 billion, to $4 billion.
At the end of February 2017, Samsung affirmed the $2.5-billion expansion of the Samsung Display project in Bac Ninh. With this project, Samsung Display’s total investment in Vietnam is going to be $6.5 billion.
21) $2 billion Nghi Son 2 Thermal Power project in Thanh Hoa
Nghi Son 2 was the first international tender for a large-scale coal-fired power plant in Vietnam. The project is going to be carried out under the build-operate-transfer (BOT) format. The $2-billion plant will be located in the province’s Nghi Son Economic Zone. It will have a capacity of 1,200 MW, produced by two 600 MW units.
In November 2016, the consortium of Japanese company Marubeni Corporation and Korea Electric Power Corporation (Kepco) signed with the Ministry of Industry and Trade the investment agreement for the project.
As of the end of 2016, the consortium was awaiting the investment certificate and was arranging the finances for the project. Though the ground-breaking ceremony was held in September 2015, the project has yet to secure a range of agreements to complete the BOT contract package.
22) $1.5 billion LG Display project in Hai Phong
The project of South Korean LG Display to produce organic light emitting diode (OLED) display products is located in Trang Due Industrial Zone (Hai Phong), covering an area of 40 hectares. LG Display received the investment certificate for this project at the end of April 2016.
Construction started in May 2016, and the plant is expected to start operation in the middle of 2017. Only 20 per cent of the products would serve domestic consumption.
23) $3.5 billion Vietnam International University Township project in Ho Chi Minh City
Having received its investment certificate in July 2008, Berjaya’s project is going to have 20 schools and universities, as well as a multi-purpose complex on an area of 925 hectares.
However, almost ten years since then, the project is still a field of grass. Therefore, in 2016, the Ho Chi Minh City People’s Committee has requested the city’s Department of Planning and Investment to review Berjaya’s project. It is likely that this project will be revoked if Berjaya keeps delaying.