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Last updated: Friday, October 19, 2018

 

Hi-Tech IPs and EPZs Development in Focus

Posted: Monday, June 11, 2018


After 25 years of development, Ho Chi Minh City now has three export processing zones (EPZs) and 16 industrial parks (IPs) with a combined area of 4,532 ha, of which 17 EPZs and IPs covering 2,571.64 ha are in operation. With flexible mechanism and open investment environment, EPZs and IPs have attracted many big companies to make key products, created a long-term stable source of income for the State Budget, facilitated economic restructuring, and increased the industrial value of local economy. The following conversation with Mr Nguyen Hoang Nang, Director of the Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA) also partly reflects the growth in both scale and quality of local EPZs and IPs. Anh Dao - Bich Thuy report.

Could you please tell us about investment attraction, production and business development in EPZs and IPs in Ho Chi Minh City up to now and their impact on investment-driven sector restructuring in EPZs and IPs?
EPZs and IPs housed 1,537 effective investment projects with a total investment capital of US$10.02 billion as of the first quarter of 2017, including 563 FDI projects with US$5.78 billion and 974 domestic investment projects with VND66,717 billion (US$4.39 billion). Licensed projects are diversified in industry, scale and technology. According to data as of late 2016, the biggest shares of investment capital respectively went to mechanical engineering (17.95 per cent), electronics (16.20 per cent), plastics (15.69 per cent), garment and textile (11.53 per cent), services (10.55 per cent) and foodstuff (10.28 per cent).

So far, EPZs and IPs have created jobs for more than 290,000 workers and more than 20,000 foreign experts. Working in a scientific environment, labourers become more active, eager to learn and improve their skills, educational level, sense of discipline, professional working manner and knowledge of law. Some tenants have 90 - 100 per cent of employees holding university degrees or higher. Investment capital is being primarily channelled into four key industries (mechanical engineering, electricity and electronics, pharmaceutical chemistry, and food processing), resulting in the labour shift from labour-intensive industries into these four key industries.

Technological development levels of industries have been significantly improved. Investors have upgraded their technologies, invested in modern automated machinery and equipment, and applied advanced technologies to high precision products used in electronics, fibre-optic, microchip, semiconductor and solar battery. Typical tenants include Furukawa, Nikkiso, Saigon Precision, Chubu Rika, Nidec Tosok, Nissei Electric and First Solar. Some investors started to step into technologies of knowledge economy such as chip design research and computing software developed by Renesas and AMCC.

By raising the slogan “accompanying investors”, how has HEPZA focused on enhancing information technology application, reforming administrative procedures and carrying out investor support policies?
To better support enterprises and investors, the Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA) rearranged the division in charge of dealing with administrative procedures. From June 1, 2017, the HEPZA Office received and delivered dossiers at the Reception Division. Administrative procedures are publicly listed at the division and on the HEPZA website. The authority maintains the ISO 9001:2008 quality management system standard in the settlement of administrative procedures; reduces at least 30 per cent of the processing time of 22 administrative procedures on the total of 89 administrative procedures relating to investment, environment, construction and labour.

To achieve the objective of further applying information technology in the State management, since October 1, 2017, HEPZA has put into use the electronic ISO software at the Reception Division; launched a website displayed in Japanese language, built post-licensed business management software; coordinated with GIS Centre under the Department of Science and Technology to build a GIS system in EPZs and IPs; and deployed the software of the Ministry of Labour, Invalids and Social Affairs to issue foreigner work permits online. The authority is providing Level 3 online public services for the certificate of origin (C/O) form D using the software of the Ministry of Industry and Trade and six administrative procedures relating to the issuance of foreigner work permits (the software catered by the Ministry of Labour, Invalids and Social Affairs), accounting for 7.8 per cent of the total of 89 administrative procedures currently being used by HEPZA. Until now, HEPZA has been authorised by central authorities and the Ho Chi Minh City People’s Committee to mandate most tasks in the fields of investment, construction, environment, labour and trade and to help investors settle administrative procedures quickly and conveniently.

With respect to business support policies, HEPZA has joined hands with relevant departments to approve enterprises of taking part in the investment stimulus programme in accordance with Decision 50/2015/QD-UBND and the development investment support programme for industrial companies according to Decision 15/2017/QD-UBND of the Ho Chi Minh City People’s Committee. In 2016, nine supporting industrial projects were approved with a total soft loan value of VND297,368 billion bearing a maturity of 5-7 years. In 2017, two projects were chosen with VND110 trillion of soft loans with a 7-year maturity granted and five projects that borrowed VND200,476 trillion in 5 - 7 years were approved. In addition, HEPZA also cooperated with the Department of Industry and Trade and commercial banks to review borrowing demands of tenants in EPZs and IPs and connected businesses with banks. As a result, it helped 11 companies to borrow VND1,384.5 billion of preferential loans in 2015 and assisted 29 companies to borrow VND2,238.96 billion in 2016. In 2017, it worked with banks to organise three direct meetings with about 120 domestic enterprises engaged in supporting industries in Tan Tao, Tan Binh and Vinh Loc industrial parks.

So, what are the central tasks of the city’s EPZs and IPs from now to 2025?
In the context that numerous trade agreements are signed and effective and the Fourth Industrial Revolution is taking shape, according to the Master Plan for Ho Chi Minh City Socio-economic Development to 2020, with a vision to 2025, the city's economic structure has shifted towards a weighting order of service, industry and agriculture. Ho Chi Minh City has led the nation in the process of industrialisation and modernisation and contributed more and more to the region and the country. A core task for the city from now to 2025 is gradually transforming its EPZs and IPs into green, clean and hi-tech industrial parks; and building new industrial parks for hi-tech industries and hi-tech supporting industries.

To achieve these objectives, HEPZA will give priority to attracting investors and encourage existing enterprises to invest in hi-tech industries, new technologies and basic technologies of the Fourth Industrial Revolution, as well as supporting and service industries that help generate high-added value products. In the 2016 - 2025 period, EPZs and IPs expect to attract US$6 - 8 billion of investment capital.

Furthermore, in order to catch up and approach the Fourth Industrial Revolution, HEPZA will consider proposing business support policies on finance, human resources training and technology transfer; and complete the construction of infrastructure systems for EPZs and IPs. In the long term, we will study the new model of EPZs and IPs to further promote their role in socio-economic development with more advantages and attractiveness for investors and overcome existing shortcomings of the current model.

HEPZA has also proposed the Ho Chi Minh City People’s Committee to legislate regulations on EPZs and IPs to clearly define functions and tasks of HEPZA. At the same time, it will pilot an industrial park that is provided with State-funded finance for land compensation and infrastructure construction. This will ensure the achievement of industrial development objectives, attract strategic sectors, and regulate land leasing prices.

Thank you very much!








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