This month, Swedish packaging giant Tetra Pak announced an additional €97 million ($105.3 million) investment to expand its packaging material production in the southern province of Binh Duong, bringing total investment in the site to over $23 million.

Tetra Pak’s expansion plans for the Binh Duong facility will include an additional production line, which will be fully operational by the third quarter of 2025. With this expansion, the facility will have the capability to produce new and innovative packaging formats.

Elsewhere, staBOO Thanh Hoa, a joint venture with Swiss company staBOO Holdings AG, in April gained approval from Thanh Hoa People’s Committee to build a bamboo processing factory with a total investment of around $125.7 million.

The factory has a designed annual capacity of 225,000 cubic metres of chipboard panels and plywood made from bamboo. It is expected to consume 1,000-2,000 metric tonnes of bamboo per day and create more than 3,000 jobs.

European investments such as these are geared towards sustainable development and green production. In particular, Tetra Pak will implement the upcoming changes for the Binh Duong facility in accordance with its dedication to environmental responsibility and corporate stewardship, ensuring sustainability standards are upheld throughout the process.

Another Danish company, Lego Group, is investing more than $1 billion in building its first carbon-neutral plant in Binh Duong province. The toymaker company plans to operate its carbon-neutral factory in the second half of this year.

Likewise, staBOO’s bamboo processing factory will produce green patented products used in construction and furniture, providing efficient carbon emissions reduction solutions to the global market.

Dominik Meichle, chairman of European Chamber of Commerce in Vietnam (EuroCham), told VIR that the trend of green manufacturing led by European companies is poised to have a ripple effect across Vietnam’s industrial landscape.

“As European firms collaborate with local suppliers, valuable knowledge about eco-friendly production processes is shared, encouraging Vietnamese businesses to adopt higher sustainability benchmarks. This not only enhances their competitiveness but also makes them more attractive to foreign investors,” he said.

According to Meichle, when sustainable practices prove to be successful both environmentally and economically, they create positive momentum for the development of regulatory policies. Demonstrating that green manufacturing is advantageous for both environmental health and economic growth encourages policymakers to support and promote these practices among domestic businesses.

“This includes providing incentives, creating supportive frameworks, and fostering collaborations between industry leaders and local enterprises. The alignment of proven sustainable methods with policy support can lead to widespread adoption of greener industrial operations, enhancing the overall competitiveness and attractiveness of Vietnam’s industrial sector to foreign investors,” he added.

Beyond cost considerations, Vietnam’s appeal as an investment destination lies in the government’s concerted efforts to improve infrastructure and promote a business-friendly environment. While progress is still needed, Vietnam is undoubtedly moving in the right direction, making it an increasingly attractive destination for European manufacturing investments, Meichle added.

The trend of European companies expanding their manufacturing capacity is closely aligned with the findings from EuroCham’s Q1 2024 Business Confidence Index report. Accordingly, 71 per cent of European businesses in Vietnam are expressing confidence in the country’s long-term future.

Source: VOV