Long An – A Promising Investment Hub in Southern Vietnam

Long An’s economic profile

Compared to other localities of the Southern economic region, Long An remains an agricultural-based province in which agriculture accounts for 71 percent of the total land in the province.

However, the provincial economic structure is shifting toward industrial activities, recording an average growth rate of 14.9 percent over the past five years, compared to 5.84 percent growth in the service sector and 1.98 percent in the agricultural sector.

In 2020, the proportion of the agriculture, industry and construction, and service sectors making up the provincial economic structure was 15.32 percent, 52.14 percent, and 32.54 percent respectively. Among these, food processing is the predominant industry, accounting for 98 percent of the province’s industrial structure, alongside supporting industries.

Long An’s 2020 export turnover reached US$6 billion and experienced a 0.5 percent growth rate over the same period. Foreign-invested enterprises continue to contribute the larger part (73 percent) to the sum, with main export goods such as textile and apparel, leather shoes, electronics, mechanics, iron and steel, and agricultural products such as rice, cashew nuts, and seafood. Key export markets of the province are Taiwan, South Korea, Japan, Hong Kong, and the US.

Foreign investment landscape

Long An has steadily emerged as a hub for foreign investment, especially in food processing, textile and garment, supporting industries, and most recently green energy.

At the end of 2020, Long An received nearly 1,100 FDI projects with a total capital of over US$6.6 billion. Meanwhile, in the first 11 months of 2020, the province recorded 106 new foreign-invested projects with US$769.68 million total registered capital (includes US$289.3 million newly registered capital, US$301,96 million additional registered capital, and US$178.39 capital contribution and share purchase).

As a latecomer for attracting FDI, the share of Long An in Vietnam’s foreign direct investment inflow is quite modest by regional standards. However, as the province consistently improves its investment environment, develops infrastructure, and enlarges its industrial land, the province has steadily climbed up the FDI ladder.

Transport infrastructure review

Despite its strategic location, the transportation system in Long An is yet to keep pace with its regional connectivity role and growth potential. While there are various important roads that connect the province, such as Ho Chi Minh City-Trung Luong expressway, key national highways 1A, 50, 62, N2, and provincial route 10, traffic congestion usually occurs due to significant traffic to and from Ho Chi Minh City.?

As such, developing transport infrastructure has been made a top priority by the provincial authorities. Numerous infrastructure projects have been planned and executed to step up the province’s road traffic system.?

Apart from the road system, Long An also sees strong potential to grow its waterway transportation and make it a crucial part of the provincial logistics network. From Long An, ships with more than 100 tonnes can follow canals such as Phuoc Xuyen, Duong Van Duong, Tra Cu, and Kinh Xang; as well as Ben Luc and Rach Cat river to go to Ho Chi Minh City.

Long An international port, with a capacity of 15,000 tons, is an important engine to drive the province forward as an important import and export hub. The port is currently being expanded and is expected to be completed by 2023, increasing its capacity to over 80 million tons of cargo per year and further helping reduce traffic congestion and logistics costs.

Expanding industrial zones

Long An has 26 industrial zones that have been granted investment licenses with total industrial land of more than 8,613 hectares. However, there are 16 out of 26 industrial zones in operation with total industrial land of 2,324 hectares, among which 87.63 percent is occupied. The price for industrial land rent in Long An increased to US$123 per square meter last year due to rising demand for industrial land, ranking third domestically after Ho Chi Minh City and Hanoi.