Vietnam will take the role of “locomotive” of the region in the green transition process.
Commitment to sustainable development is seen as a key driver to promote the development of sustainable projects, thereby attracting more high-end customers to Vietnam…
Vietnam is expected to play a leading role in the region’s green transformation. According to a recent report by Jones Lang LaSalle (JLL) Vietnam titled “ From Vision to Action: Accelerating the ‘Greening’ of Vietnam’s Industry ”, the industrial market’s growth drivers, demographic advantages and ongoing green initiatives will act as catalysts for the green transformation journey of this sector.
VIETNAM’S GREAT ADVANTAGES
According to JLL, with its strategic geographical advantage, Vietnam benefits significantly from the ‘China +1’ strategy. Foreign direct investment (FDI) here has a compound annual growth rate (CAGR) of 10% in the period 2010 – 2023, higher than the average of 7.6% of countries in the ASEAN region (including Indonesia, Philippines, Malaysia, Thailand, Vietnam) and in contrast to the -3.8% decline in China.
With a commitment to achieve net-zero emissions by 2050, as announced at COP26, Vietnam is actively implementing a roadmap to transition to a carbon neutral economy. Key action groups include increasing the use of renewable energy, using energy efficiently, and promoting electric vehicles. The industrial sector is leading the way in achieving green building certification, with more than 70% of projects achieving LEED Certification in 2023 belonging to the industrial sector, according to the US Green Building Council.
In addition, Vietnam has issued Decree 35/2022/ND-CP to accelerate the green transition, with one of the focuses being the development of eco-industrial parks. Currently, pilot projects such as Amata City Bien Hoa and Deep C Industrial Parks demonstrate significant progress in implementing eco-industrial park models. These projects focus on improving energy efficiency, recycling waste and using renewable energy, achieving sustainable benefits in both the environment and the economy.
“Vietnam’s industrial market is at a pivotal point where adopting sustainable solutions is not only a requirement but also a strategic advantage,” said Trang Le, Senior Director of Research and Consulting at JLL Vietnam. “We strongly believe that all stakeholders who are looking to drive sustainable change and seize opportunities in Vietnam’s industrial market will also see the business benefits of green initiatives.”
SECTORS EXPECTED TO HAVE STRONG GROWTH
Vietnam’s exports are expected to grow at a CAGR of 6.8% annually during 2024-2030, while domestic consumption is forecast to grow at 6.1% during the same period. The e-commerce industry is witnessing strong growth with a CAGR of 33.8% during 2019-2023, considered one of the fastest growing markets in the region.
According to JLL, another factor that helps attract investment in the supply chain and industrial production is Vietnam’s highly educated workforce, with 87% of the working-age population holding a degree, the second highest in Southeast Asia. In addition, the average wage of workers in the manufacturing industry is only about 34% of that in China, helping Vietnam take advantage of the ‘China +1’ strategy.
As an export-driven economy, Vietnam currently has 12,254 hectares of industrial land in the North and 28,251 hectares in the South, creating enough land supply to meet upcoming demand.
According to JLL, Vietnam’s industrial and supply chain market has become one of the fastest growing industrial markets in the region thanks to the strong presence of institutional investors in recent years. This also shows the ability to improve the stability, standardization and transparency of the market.
The ready-built factory (RBU) market has also shown solid performance amid the economic downturn, thanks to the growth of the manufacturing sector and the attraction of foreign investment. “As the industrial sector and supply chain develop rapidly, the market is also attracting attention to new potential assets such as data centers and cold storage. Vietnam is considered an attractive location due to its economic growth potential and population structure,” said the JLL report.
vneconomy.vn
