European companies are showing optimism in Vietnam’s recovery, fueling further expansions.
In the early weeks of 2024, several European businesses have announced their plans for continued growth in Vietnam. The LEGO Group revealed its $1.3 billion factory in the southern province of Binh Duong will begin production this year, with high-quality products expected in the second half of 2024, marking a significant milestone in the project’s transition from planning to production.
Nestlé also made headlines last week, injecting an additional $100 million into its Nestlé Tri An factory in the neighboring province of Dong Nai. This follows a $132 million investment in 2021, bringing Nestlé’s total investment in the factory to $500 million, establishing it as one of the company’s largest production plants in the country.
Gabor Fluit, Chairman of the European Chamber of Commerce in Vietnam (EuroCham Vietnam), commented on the positive trend of Euro-backed projects, stating, “Vietnam has witnessed a clear increase in European companies investing in the country for business initiation or expansion. This reflects investors’ confidence in Vietnam’s growing economic stability and its status as a cost-effective manufacturing location. These significant investments have a positive ripple effect, inspiring more European companies to follow suit.”
According to the latest Business Confidence Index (BCI) from EuroCham, the BCI remained below the midpoint at 50 in Q4/2023. Nevertheless, there has been continuous quarter-over-quarter improvement in BCI since Q2 2023, suggesting a cautiously optimistic trend in market recovery.
“Vietnam’s attractiveness to European investors lies in its stability, offering a predictable policy environment, stable exchange rates, and a consistent economic and political climate. Fiscal responsibility and exchange rate stability contribute to investor confidence,” noted Fluit. He added that Vietnam’s diversification into renewable energy and high-tech sectors, coupled with increasing domestic consumption, presents appealing opportunities for international investors, including those from Europe.
“With projections indicating Vietnam will continue as one of Asia’s fastest-growing economies, European companies are likely to increase their investments in the country in the coming years,” Fluit concluded. “Leveraging its unique advantages and gradually improving regulations, legal frameworks, and infrastructure, Vietnam is well-positioned to remain a favored destination for European capital for years to come.”
