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Dong Nai Province, Vietnam: Opportunities in the Leading Industrial Production Hub
Dong Nai province, in the Southern Key Economic Region, is a prime choice for foreign companies in Vietnam with its strong infrastructure, logistics connectivity, and industrial parks. We profile its key advantages that has made it among the top ranked destinations for FDI in the country across multiple business lines.
As Vietnam increasingly draws international companies seeking alternatives to conventional production hubs, Dong Nai emerges as a prime choice with its strong infrastructure and logistics connectivity, favorable location, growing population, and the presence of multiple industrial zones. This presents an excellent opportunity for enterprises aiming to broaden their presence in Southeast Asia.
In 2021, Dong Nai’s GRDP was estimated at VND 214.37 trillion (US$9.2 billion). By the end of the first quarter of 2024, Dong Nai’s GRDP increased by 5.86 percent over the same period in 2023, per data from the General Statistics Office (GSO).
Investment appeal of Dong Nai province
Dong Nai enjoys connectivity linkages with the South-Central Coast, the South-Central Highlands, and the Mekong River Delta and is also a critical gateway to the east of Ho Chi Minh City—Vietnam’s leading economic center.
Dong Nai province, located in Vietnam’s Southern Key Economic Region (KER), has a natural area of 5,907.2 km². Dong Nai is conveniently connected to major trade routes due to its proximity to Ho Chi Minh City and the Cai Mep-Thi Vai port complex. The province has many industrial parks that are important for economic growth as they attract large investments from manufacturing and technology industries.
The development of critical infrastructure has been key to enhancing Dong Nai’s logistics capacity, with improvements made to its port, rail, and road infrastructure. The Dong Nai government has tried to facilitate the business development environment through quick administrative procedures and incentives for companies.
Location advantages of Dong Nai province
Situated in southern Vietnam, Dong Nai shares borders with various provinces: to the east lies Binh Thuan province, to the northeast, Lam Dong province, to the northwest, Binh Duong and Binh Phuoc provinces, while to the south it borders Ba Ria–Vung Tau province. Its western boundary connects with Ho Chi Minh City via an established transportation network that covers major national arteries—National Highway 1A, Highway 20, and Highway 51, alongside the North-South railway line. Proximity to Saigon port and Tan Son Nhat International Airport further augments its accessibility, fostering conducive conditions for manufacturing and export-oriented industries within the region and facilitating trade across the nation. Additionally, these infrastructural advantages serve to bridge the southeast region with the Central Highlands, amplifying connectivity and economic synergy.
Industrial zones and industrial parks in Dong Nai province
Dong Nai is among three regions in Vietnam that enjoys a concentration of industrial zones (IZs) and export processing zones (EPZs), the others being Ho Chi Minh City, Binh Duong, and Ba Ria–Vung Tau.
According to an approved plan, Dong Nai has 40 industrial parks totaling over 19,000 hectares; 32 industrial parks operational and boast an average occupancy rate of over 85 percent, per a media report.
Industrial zones in Dong Nai are categorized into four main areas: the central zone covering Bien Hoa–Vinh Cuu–Trang Bom–Long Thanh, the industrial zone covering Nhon Trach–Go Dau, the eastern zone in Long Khanh, and the northern zone in Tan Phu–Dinh Quan.
Prominent industrial parks include:
- Loc An – Binh Son Industrial Park
- Dau Giay Industrial Park
- Giang Dien Industrial Park
- Long Khanh Industrial Park
- Ong Keo Industrial Park
- Bau Xeo Industrial Park
- Thanh Phu Industrial Park
- Nhon Trach VI Industrial Park
- Long Duc Industrial Park
- An Phuoc Industrial Park
- Long Thanh Industrial Park
- Tam Phuoc Industrial Park
- Song May Industrial Park
- Nhon Trach III Industrial Park
- Amata Industrial Park
These industrial parks host business lines across the electronic process and assembly, electrical appliances, and IT equipment production industries; mechanical engineering; pharmaceuticals, agro-pharma and agrochemicals; medical equipment; cosmetics; spice; rubber; wood processing; textile, leather, and footwear industries; agrifood, animal feed, and aquatic products; machine tool production; metallurgical; paper; plastics; ceramics; glass; construction materials; packaging; sustainability consulting services for manufacturing industries; jewelry; sports equipment; toys; chemicals PE fibers, plastic beads, industrial pigments – to mention a few.
Public Administration Performance Index
Vietnam’s Provincial Governance and Public Administration Index (PAPI), which evaluates the performance of Vietnam’s 63 provinces, proves that Dong Nai has strong leadership and effective governance. The province has made progress in implementing administrative reform and improving public service.
Dong Nai achieved a PAPI 2023 index score of 39.92 points, boosted by positive observations in the fields of “Corruption Control” and “Service Delivery”. Credit goes to the adept leadership of the Dong Nai government, positioning the province among the top performers in these domains. Nonetheless, “Environmental Governance” remains a challenge, underscoring the necessity for targeted environmental regulations to improve and streamline management practices effectively.
Dong Nai’s performance in the areas of “E-Governance” and “Administrative Procedures” demonstrates its steady commitment to digital governance and efficient bureaucracy, which may take it to a higher position in the near future.
PAPI, Dong Nai, 2018 to 2023
|
Category |
2023 |
2022 |
2021 |
2020 |
2019 |
2018 |
|
Participation |
4.34 |
4.31 |
4.29 |
4.27 |
4.25 |
4.23 |
|
Transparency |
4.59 |
4.55 |
4.53 |
4.51 |
4.49 |
4.47 |
|
Accountability |
4.14 |
4.10 |
4.12 |
4.09 |
4.07 |
4.05 |
|
Corruption Control |
6.48 |
6.45 |
6.42 |
6.40 |
6.38 |
6.36 |
|
Administrative Procedures |
7.03 |
7.00 |
6.98 |
6.95 |
6.93 |
6.90 |
|
Service Delivery |
7.00 |
6.97 |
6.95 |
6.92 |
6.90 |
6.88 |
|
Environmental Governance |
2.99 |
3.02 |
3.05 |
3.08 |
3.10 |
3.12 |
|
E-Governance |
3.35 |
3.32 |
3.30 |
3.28 |
3.25 |
3.23 |
|
Total |
39.92 |
39.72 |
39.64 |
39.50 |
39.37 |
39.24
|
Source: Vietnam Provincial Governance and Public Administration Performance Index
Provincial Competitiveness Index
The Provincial Competitiveness Index (PCI) was announced for the first time in 2005 as a tool to evaluate the economic competitiveness of Vietnam’s regions. Based on a comprehensive assessment, it identifies suitable locations for investment and provides valuable information for investing businesses.
Dong Nai is ranked 29th in the 2022 national rankings. The province has registered an encouraging performance across several categories, although its overall scoring has increased somewhat marginally from 63.84 in 2018 to 65.67 in 2022.
Dong Nai province has continuously made remarkable improvements in the categories of “Time Costs” and “Law & Order”. This development illustrates that local authorities are actively reducing barriers and improving accessibility for businesses, making Dong Nai an attractive investment location.
PCI scoring in the last 5 years: Dong Nai performance
|
Category |
2022 |
2021 |
2020 |
2019 |
2018 |
|
PCI Score |
65.67 |
65.75 |
64.56 |
65.82 |
63.84 |
|
Entry Costs |
7.16 |
6.92 |
6.48 |
7.13 |
8.12 |
|
Land Access & Tenure |
6.77 |
7.37 |
7.01 |
6.06 |
6.19 |
|
Transparency |
5.49 |
5.98 |
6.34 |
6.60 |
6.13 |
|
Time Costs |
8.03 |
7.93 |
8.05 |
8.02 |
7.00 |
|
Informal Charges |
7.33 |
6.88 |
6.53 |
5.57 |
6.78 |
|
Policy Bias |
5.86 |
5.48 |
6.39 |
6.04 |
5.25 |
|
Proactivity |
6.57 |
6.51 |
6.23 |
5.92 |
5.43 |
|
Business Support Policy |
6.04 |
7.42 |
5.87 |
6.88 |
6.54 |
|
Labor Policy |
5.74 |
5.75 |
6.55 |
6.75 |
6.32 |
|
Law & Order |
7.05 |
6.92 |
6.85 |
6.49 |
6.18 |
|
Ranking |
29 |
22 |
20 |
23 |
26 |
Source: The Provincial Competitive Index 2022
Foreign direct investment
In early 2024, Dong Nai province recorded high levels of foreign direct investment (FDI), indicating the region’s potential for industrial development and its proactive efforts to welcome foreign enterprises. Per the provincial statistics office, Dong Nai attracted US$571 million in FDI in Q1 2024 (Jan-March), up 13.3 percent over the same period last year.
Dong Nai issued investment certificates for eight investment projects with a total capital of nearly US$500 million. Of this, the combined value of four new projects exceeds US$155 million, while additional capital injected in the remaining four projects totaled US$217 million.
SLP Park Loc An Binh Son in the Loc An-Binh Son Industrial Park with a core capital of more than US$120 million, is one of the most recent projects. Other important investments include the US$100 million invested by Nestlé Vietnam in the Tri An factory and the considerable capital increases made to enhance production capacity at the Dong Nai Industrial Park by companies like Advanced Multitech Vietnam, Kenda Rubber, and Hyosung Dong Nai.
Dong Nai is home to nearly 1600 valid FDI projects, with a combined investment capital worth over US$34 billion, per a media report dated April 3, 2024.
In the first three months of 2024, Dong Nai saw 24 newly licensed projects with a total registered capital of US$291.4 million. In addition, 24 projects were allowed to inject US$279 million to their registered capital.
FDI investment in Q1 2024 was mostly directed to newly licensed industrial parks.
These investment trends are proof that Dong Nai is among top locations in Vietnam for setting up manufacturing operations, supported by the local government’s efforts to promote an investment-friendly environment and improve regional connectivity.
In the foreseeable future, Dong Nai is expected to be a sought after base by overseas investors for their Southeast Asia operations.
More information
Dong Nai, a burgeoning economic hub in southern Vietnam, has garnered attention as a key player in the region’s growth trajectory. With a vibrant workforce, improving infrastructure, and streamlined administrative processes, the province is poised for further advancement in the coming years.
More recently, Dong Nai has attracted substantial foreign investment from key target markets, including the US, Germany, S.Korea, and Japan. These investments cover a wide range of industries, such as electronics, auto manufacturing, and textiles, and have taken advantage of the province’s extensive industrial parks and economic zones.
Dong Nai offers dynamic prospects for firms looking to invest or expand in the Vietnamese market. Dezan Shira and Associates provides strategic consulting services to companies seeking investment opportunities in Dong Nai and other regions of Vietnam. For more information, please email our experts at vietnam@dezshira.com
(With additional inputs from Melissa Cyrill.)
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Vietnam Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Asia, including ASEAN, China, and India. For editorial matters, contact us here and for a complimentary subscription to our products, please click here. For assistance with investments into Vietnam, please contact us at vietnam@dezshira.com or visit us at www.dezshira.com.
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