VPID: Effective Investment and Sustainable Development

Vinh Phuc Infrastructure Development Joint Stock Company (VPID) has become a professional investor in industrial park infrastructure since it began with Khai Quang Industrial Park (IP) in the northern province of Vinh Phuc eight years ago. The company invests and operates many IPs, including Khai Quang covering 248.65ha, Chau Son (Ha Nam) covering 170 ha, Xuan Son-Thanh My industrial complex (Son Tay-Hanoi) and Phu Thanh II (Hoa Binh Province).

 

 VPID is the second largest shareholder of Construction and Investment Joint Stock Company No18 (Licogi 18), ranked among Vietnam’s top 500 joint stock companies. By early 2011, VPID’s total assets reached over VND200 billion, 5.7 times its charter capital. This is a great breakthrough since the company started with the initial charter capital of less than VND10 billion. VPID is examplary for its efforts to select effective investment strategies laying a firm foundation for companies’ development.

 

In 2003, when VPID officially began to implement the Khai Quang IP project, the company had to outline a detailed plan, complete legal procedures and carry out infrastructure investments. To avoid latent risks, the company actively cooperated with concerned agencies to finalise legal procedures and price mechanisms. The firm used capital effectively.

 

 Since 2006, VPID has entered an exciting development stage. More investors have come to the IP to lease land for their projects. Van Phung Ha, Chairman of the Board of Directors, said policies and mechanisms sometimes prove their weaknesses, thus, enterprises need to apply them cleverly. During the investment process, businesses need to have their own priorities suitable for their capacity and also good for the community.

 

To date, Khai Quang IP has attracted 56 investment projects; in which, foreign investors account for 71 percent. The IP is seen as one of the most successful IP investment models in Vinh Phuc Province. This confirms the vision of VPID’s leaders when they decided to invest in Vinh Phuc – one of the most dynamic localities. This is a turning point for VPID’s other IP projects.

 

The fast business growth and larger investment scale have brought challenges for VPID for the new development period. The company’s board of directors found a solution. That is restructuring and applying transparent management and operation mechanisms as well as selecting effective investment projects. On June 1, 2010, VPID listed its shares on Hanoi Stock Exchange (HNX). The company has halted many smaller projects to focus on its strategic projects.

 

According to Chairman Van Phung Ha, this showed VPID’s priority development strategy, also proving the change in its management method into a public company which operates in a clear and transparent mechanism. This is the foundation for VPID’s further development.

 

The eight-year process of IP infrastructure development is a challenging time for Chairman Van Phung Ha. This investment area is considered an “adventure” with possible losses. Like many other IP investors, VPID has to take advantage of opportunities when they are available. More importantly, it has gained success in IP infrastructure development by its own strategies. Ha said, 20 years after Vietnam’s first export processing zone was set up, weaknesses are still seen in policies and mechanisms of local IP development. Investors have to apply these in real time with risks and pressures. IP planning remains weak, depending on local authorities, creating an unfair competition. This has formed a fertile land for speculators.

 

Not all industrial parks can attract investors by low rental rates. To lure enterprises, IPs must have “vitality” which includes a good investment environment and quality workforce. Besides, investment promotion is essential to draw big projects, and then they will be distributed to localities for supporting projects. This is a key to successfully filling IPs.

 

Currently, VPID is among leading IP investors with lots of experience to help it face rising challenges.