Dung Quat EZ and Quang Ngai IPs Welcoming New Wave of Investment

1:54:03 PM | 23/7/2019

Following the success of such projects as Dung Quat Oil Refinery, Doosan Vina Heavy Industry Plant or VSIP Quang Ngai (Singapore), Dung Quat Economic Zone and Quang Ngai industrial parks have now become reliable destinations for major domestic and foreign corporations. The following interview with Mr. Dam Minh Le, Deputy Director of the Dung Quat Economic Zone and Quang Ngai Industrial Parks Authority, will reveal the core factors that help Dung Quat Economic Zone and Quang Ngai Industrial Parks have strong attraction to investors. Thanh Tung reports.

Many investors have chosen Dung Quat Economic Zone and Quang Ngai industrial parks as destinations for their projects, partly because the authority always pays attention to promoting administrative reform, building a favorable, friendly and responsible investment environment. Could you please elaborate on your effort?

With the viewpoint that “The success of investors is the success of Quang Ngai province”, in the past time, Quang Ngai province and the Dung Quat Economic Zone and Quang Ngai Industrial Parks Authority have always supported and facilitated investors to invest in Dung Quat Economic Zone and Quang Ngai industrial parks.

Accordingly, provincial leaders often meet, encourage and support businesses and investors; and implement strong administrative procedure reforms with adoption of a fast-moving single-window mechanism. In 2018, the province launched the Quang Ngai Public Administration Center, a centralized provincial center for receiving and settling administrative procedures under the jurisdiction of 16 provincial departments, thereby reducing costs and time of settling administrative procedures for investors and businesses.

Knowing that land compensation and ground clearance is always a barrier to any project, particularly big ones, the authority has proposed setting up a steering committee directly administered by the Chairman of the Provincial People's Committee or the Vice Chairman of the Provincial People’s Committee. The steering committee hosts regular meetings to seek solutions to help investors resolve difficulties. Typical examples include VSIP Quang Ngai, upgraded and expanded Dung Quat Oil Refinery, Hoa Phat Dung Quat Iron and Steel Complex and recently a project invested by Episode FLC Group.

Besides, to support investors, the authority has actively coordinated with local authorities to deal with the hardships of any project, while working with people on land compensation, ground clearance policies and advising the Provincial People’s Committee on policy solutions to land compensation and ground clearance.

Especially, the authority has communicated to its employees, by perception and in action, that investors and businesses are the ones we serve, not the ones we administer. Hence, the investment environment in Dung Quat Economic Zone and Quang Ngai industrial parks has improved significantly in recent years.

In addition to general incentives specified in central regulations, do you have special support mechanisms for investors?

In addition to general policies for investors in any locality, to systematize regulations on investment incentives, supports and attraction, Quang Ngai issued Decision 36/2016/QD-UBND. This ruling clearly defines preferential policies and specific preferential rates for land rent, support for land compensation and ground clearance, investment support for construction of essential technical infrastructure and construction of centralized wastewater treatment facilities in industrial parks, industrial complexes and economic zones.

The province has outstanding mechanisms and policies. For example, it applies the lowest lend rent rate in the regulatory framework: 0.5% for investment projects, funds 10% of land compensation and ground clearance cost for projects that are specially encouraged for investment; and supports 70% of investment costs of infrastructure inside and outside the project fence. If projects involve the rural and agricultural sector, they will be supported up to 50% - 90% of infrastructure construction costs, and will have lifetime exemption from land rent when investing in education, health, sports, culture and environment. They will be also assisted with labor training costs, conditions establishment announcement and product promotion.

What are potential industries that are expected to boost the development of Dung Quat Economic Zone and Quang Ngai industrial parks in the near future?

Besides existing industries such as petrochemical, mechanical engineering, light industry and garment, the steel rolling industry with the Hoa Phat Dung Quat Iron and Steel Complex and the gas-fired electricity industry with mixed gas turbine power plants fueled by gas sourced from Ca Voi Xanh (Blue Whale) gas field are expected to create a boost for the industry, as well as local socio-economic development, in the coming years.

The Hoa Phat Dung Quat Iron and Steel Complex has a total investment of VND60,000 billion and has a combined capacity of four million tons a year. Hoa Phat Group is striving to bring both phases into full operation in the second quarter of 2020. In order to enhance the self-contained modern production value chain of the complex, Hoa Phat Group has decided to invest heavily in the product chain. The first is the VND3,000-billion Hoa Phat Dung Quat iron alloy production plant and the next one is the VND1,700-billion prestressed steel manufacturing project.

Powered by the gas-fueled electricity industry, Dung Quat Economic Zone will have Dung Quat Power Center, including three Dung Quat mixed gas turbine plants with a capacity of about 750 MW each. It also has a reserve area for the fourth plant in the future. In particular, Dung Quat I and Dung Quat III plants are invested by the Electricity of Vietnam Group (EVN), while Dung Quat II is invested by Sembcorp Group under BOT method.

Currently, the authority is supporting and guiding investors to complete and achieve project quality. Dung Quat Economic Zone expects a wave of new investors in the coming time, say experts, especially after the Blue Whale gas is brought ashore. Currently, the authority is reviewing and adjusting development plans of industrial parks in Dung Quat Economic Zone; invest in infrastructure connected to industrial parks and Dung Quat Power Center with investment projects using gas fuel sources for production. At the same time, it will invite and attract gas-fueled projects to produce petrochemicals, chemicals and gas fuels for industries to boost local industrial development.

What solutions will you focus on to develop Dung Quat Economic Zone into the province's growth nucleus and into the coastal industrial center of the Central Region, as stated in the decision on adjusted Quang Ngai Industrial Development Plan to 2020, with a vision to 2025, issued by the Provincial People’s Committee in 2018?

In the first 6 months of 2019, Dung Quat Economic Zone and Quang Ngai industrial parks attracted 22 projects with the total investment capital of US$465 million, bringing the total number of investment projects to 323, and the total investment capital to about US$12.5 billion, including 57 FDI projects with a total capital of US$1.7 billion and 266 domestic projects with a total capital of VND218,033 billion.

So far, 162 projects here have come into operation and employed nearly 41,603 workers. In addition, more than 7,000 workers are engaged in construction and providing services here. 

In the near future, the authority will continue to support investors to deploy projects that pull other supporting projects and convince existing investors to entice new ones, focusing on projects from Japan, South Korea, Singapore, the United States, Europe and other countries. It will work closely with VSIP Quang Ngai, Dae Young E&C Company (South Korea) to attract foreign-invested light industry projects; concentrate on industries and fields where Dung Quat Economic Zone and Quang Ngai industries have cutting-edge advantages, particularly those related to the use of deep-water seaports, heavy industries, petrochemicals, chemicals, logistics, infrastructure and port services, and infrastructure operation projects.

In addition, the authority will accelerate the investment progress of economic zone infrastructure projects, complete the road from Tri Binh to Dung Quat Port, Dung Quat sand breaker project (phase 2) and traffic routes interconnecting Dung Quat ports. At the same time, it will consult with the Provincial People’s Committee to propose that the Ministry of Transport study and invest in roads linking Highway 24C to Truong Son Dong Road to get to the Central Highlands and Southern Laos provinces to promote the Dung Quat deep-water port.

Thank you very much!