Unilever Vietnam increases investment capital
Added capital by FIEs exceeds fresh FDI funds
By Quoc Hung - The Saigon Times Daily
HCMC – Unilever Vietnam International Company Ltd. has pledged an additional investment of US$11.2 million to expand production at its factory in the Tay Bac-Cu Chi industrial zone in HCMC’s Cu Chi District.
The new capital brings the company’s total investment pledge to its factory to over US$86.47 million, said a source from the HCMC Export Processing Zone (EPZ) and Industrial Park (IP) Authority (Hepza) who approved the 
new capital last week.
According to Hepza’s investment department, the company will build a new facility for health care products at its factory complex in the park.
Established in 1995, Unilever Vietnam recently became 100% foreign-owned after its acquisition of 33.33% of the shares in the joint venture from its local partner, Vietnam National Chemical Corporation (Vinachem).
After careful consideration, Unilever and Vinachem decided to move their cooperation to a new level, Unilever Vietnam chairman Marijn van Tiggelen told the Daily recently. The strategic cooperation agreement was signed between Unilever and Vinachem in March.
The two parties agreed to restructure the joint venture to increase flexibility, expand outsourcing contracts of member enterprises and cooperate in raw material production to replace imported material. The company has earned nearly US$1.75 billion from outsourcing contracts in the last five years and imports around US$75 million worth of materials per year.
The capital increase is one of the biggest of the year at the city’s EPZs and IPs.
January-July saw 20 foreign-invested enterprises pledging an extra US$56.4 million compared to over US$11 million registered by the seven new projects licensed into the city’s EPZs and IPs.
Hepza attributed the lower-than-expected investment pledges by new projects to the fact that EPZ and IP developers could not meet the land demand of investors and the global recession. Hepza also said the city’s drive to encourage eco-friendly and less labor-intensive projects in sectors such as animal feed and dried food production and textile and garments has had an impact on investment activity.
Experts said that many foreign-invested enterprises (FIEs) had been operating at a profit and had increased capital to fund expansion schemes.
Nidec Tosok Vietnam, producing electric wires and motor fans for computers in Tan Thuan EPZ in District 7, added over US$23.7 million to expand production.
With the new fund, the company has raised its pledged investment capital to nearly US$110 million from the original US$1 million, according to Hepza.
Nidec Tosok has called for Japanese companies to invest in projects to manufacture precision mechanical tools in Vietnam.
Japan’s Nidec Tosok Corp. last month established a joint venture with another Japanese firm in Vietnam, Akiba Die Casting Co., to manufacture auto parts at Tan Thuan EPZ. The new joint venture has registered capital of US$7 million.
HCMC has 15 export processing and industrial zones that are almost fully occupied. Hepza expects the zones to attract US$100 million in investment this year.