Sitting amidst an interlaced network of rivers and canals in the Mekong Delta, the province of Ben Tre enjoys abundant natural resources that drive its agriculture-focused economy. It is one of the 13 provinces in the delta, covering an area of 2,360 square kilometers, and is home to 1.29 million people.
While many know Ben Tre as Vietnam’s “Coconut Kingdom” and an eco-tourism site — boasting its sea of green coconut trees and unique cultural features — the province is fast becoming an attractive destination for investors.
Ben Tre was the eighth most competitive province for doing business in Vietnam in 2020, according to the Provincial Competitiveness Index, despite ranking 46 out of the 63 provinces in terms of gross regional domestic product.
Last year, thanks to Vietnam’s outstanding COVID-19 handling, Ben Tre’s GRDP reached $2.4 billion, a growth of 0.84%. In the first half of 2021, the province bounced even stronger, with a 6.47% growth, as its agricultural and industrial activities rose by 7.29% and 10.59%, respectively. Before the pandemic, the GRDP growth rate of the province consistently stood above 7%.
A recent report from Dezan Shira & Associates examined the investment climate of Ben Tre and the key factors that make it a considerable destination for foreign investors.
Strong traditional sectors
Like all the other 12 provinces surrounding the vast maze of the Mekong River Delta, Ben Tre relies on agriculture, forestry and fishery to thrive. The sector accounts for nearly 40% of its GRDP.
With more than 73,000 hectares of coconut farms, its yearly output of 645 billion coconuts has created a million-dollar industry. In 2020 alone, the export turnover of coconut-based products reached $346 million, almost 25% of the provincial total export turnover. This has also given most of its residents a stable source of income, with above 100 businesses operating in this field.
Ben Tre’s diverse ecological features also warranted it with water resources that made the abundant growth of rice, fruits, flowers and plants, as well as aquatic products possible.
In 2020, the total output of aquatic products in the province hit 533,788 tons, an increase of nearly 5% compared to the previous year. Catfish was the most popular product, with a total output of 174,790 tons, followed by white shrimps with 68,930 tons. These aquatic products were exported to key markets, including the US, EU, Japan, China and Taiwan.
Beyond agriculture, the service sector is also a major contributor to Ben Tre’s economic growth. In fact, it has surpassed agriculture to become the largest component of the provincial economic structure, taking up 39.55%.
And while currently small, the industrial and construction sector has seen incredible progress over the years. Food product processing, paper production, garment, and the widening sphere of the renewable energy sector are all driving Ben Tre’s economy forward, and playing consequential roles in attracting foreign direct investments to the province.
Foreign direct investment
Until June 2021, Ben Tre had 61 foreign direct investment projects with a total capital of more than $1.71 billion. Most of the investments were poured into agricultural and aquatic processing, automobile technology, leather shoe production and garment. Driven by the Vietnamese government’s investor-friendly policies on the renewable energy sector, wind development projects were the key engine for FDI attraction in 2020, increasing provincial FDI by more than 97% compared to 2019.
The province also exhausted efforts on incorporating high technology in agriculture and food processing to fully develop their potential and advantages. Priorities were also set for education, healthcare, rural development, industrial park construction and eco- and cultural tourism as key areas for foreign investment attractions.
Incentives for investment
With its goal to become the center for agricultural production and distribution in Vietnam, Ben Tre’s local government vowed to continue improving the business climate and introducing policies for investments directed at agriculture and rural development.
Back in 2018, Ben Tre trade officials pointed out the necessity of reducing intermediaries to increase profits for enterprises and investors. The province offered a variety of incentives and policies to further attract foreign investment. Lower rates for corporate income tax and land rentals, and a longer period of exemption for land leasing fees, as well as worker training were all added to an already-generous State-stipulated incentives.
A one-price policy for water, electricity and telecommunications for domestic and foreign investments was also put in place, combined with proactive support from the local authorities in site clearance and administrative procedures.
However, with the Mekong Delta considered as one of the most vulnerable areas to climate change, investors looking to invest in Ben Tre should prepare for typhoon season and other environmental hazards that have seemed to worsen in recent years. The saline intrusion, for example, has already destroyed hundreds of hectares of rice and fruit crops.
Promising future
All factors considered, Ben Tre is showing a lot of promise as a leading investment destination in the Mekong Delta and in the southern region.
The province’s exciting development, aided by a strategic roadmap towards becoming a well developed province by 2025, presents great advantages for investors who want to take advantage of its growing momentum. With Ben Tre’s potential yet to be fully untapped, opportunities are plenty and huge.