The Ministry of Planning and Investment and the Vietnam Invest Network Corporation recently co-organised the Exhibition for Investment Promotion in Vietnam Industrial Zones 2013 (VietIZ 2013) in Hanoi. Themed “Promoting investment into Vietnamese industrial zones”, VietIZ 2013 is expected to be a bridge linking domestic and foreign investors, helping increase their investment capital in industrial zones in Vietnam.
Linking investors and authorities
Mr Nguyen Viet Anh, CEO of Vietnam Invest Network Corporation, said VietIZ 2013 was attended by domestic and foreign industrial zone infrastructure developers, industrial zones authorities of many provinces and cities nationwide and investors, among others. It is a good opportunity for participants to present the potential and strengths of industrial parks and economic zones through maquette systems, diagrams, models, documents and investment project lists. In addition, the event is also a chance for industrial service providers, infrastructure developers and provincial/municipal management boards of industrial zones to expand investment ties and cooperation.
Mr Nguyen Van Trung, Deputy Minister of Planning and Investment, said VietIZ 2013 is highly practical and is an essential activity for promoting investment into industrial parks in Vietnam. This is a good condition to create transaction exchanges for investors and industrial zones to meet and exchange cooperation, as guided by the Government.
He further analysed that industrial zones not only serve as economic centres with huge contributions to export value and industrial production, but also generate nearly 2 million jobs and pay large amounts of taxes to the State Budget each year.
According to economists, investment attraction into industrial zones nationwide slowed down since 2009 on the global economic downturn. VietIZ 2013 is expected to generate breakthroughs in advertisement and increase investment.
According to the organisers, VietIZ 2013 had 50 booths for 45 domestic and international exhibitors, including Viet Hung Industrial Park (Quang Ninh province), Vietnam Economic Times (Hanoi), Thua Thien Hue Industrial Zones Authority (Thua Thien - Hue province), Vietnam - Russia Joint Venture Bank (Hanoi), and Singapore Ascendas - Protrade Tech Park (Ho Chi Minh City).
"Red address" in investment attraction
Mr Tran Duy Dong, Deputy Director of the Economic Zones Administration Agency under the Ministry of Planning and Investment, said most big investment projects approved this year chose to locate in industrial zones and economic zones. Particularly, Nghi Son oil refinery was located in Nghi Son Economic Zone (Thanh Hoa province); Samsung was based in Yen Binh Industrial Park (Thai Nguyen province) and Yen Phong Industrial Park (Bac Ninh province); LG picked up Trang Due Industrial Park (located inside Dinh Vu - Cat Hai Economic Zone, Hai Phong City) and Bus Industrial Centre chose Nhon Hoi Economic Zone (Binh Dinh province). These billion US dollar projects are primary contributors to bringing total investment capital in industrial zones and economic zones to US$9 billion this year. “This demonstrates the fact that industrial zones and economic zones continue to be the top choice of foreign investors, especially processing and manufacturing sector investors, when they choose Vietnam," he added.
In the first 10 months of 2013, 75 percent of foreign direct investment (FDI) flowed into industrial zones and export processing zones in Vietnam, because of better infrastructure and investment incentives. Not only that, according to the summary assessment report on more than 20 years of industrial zone and economic zone development, most big brand names have chosen to build their factories in industrial zones, including Honda, Canon, Panasonic, Piaggio, Nissan, Hyundai, Intel and Unilever. Specifically, Bridgestone, a Japanese investor, recently decided to raise investment capital for its plant in Dinh Vu Industrial Zone to US$1.2 billion after enjoying good business here. Fuji Xerox has also inaugurated a printer factory in Vietnam - Singapore Industrial Park (VSIP) Hai Phong. And not long ago, Nokia also put into operation mobile phone manufacturing facilities in VSIP Bac Ninh.
Besides, not only investing to build factories in industrial zones and economic zones, foreign investors have also spent on infrastructure construction in industrial zones and economic zones to attract secondary investors. For example, Vietnam - Singapore Industrial Park Joint Venture Company (VSIP) - a joint venture company between Sembcorp Group of Singapore and Becamex Corporation of Vietnam - commenced construction on VSIP Quang Ngai in Quang Ngai province in mid-September, after being successful with VSIP Binh Duong, VSIP Hai Phong and VSIP Bac Ninh. And, VSIP Quang Ngai has its first investors after just being built. URC Central Company of the Philippines plans to invest US$35 million to build Jack & Jill brand potato chips production plants here. King Riches Footwear Vietnam Company, a subsidiary of Kingmaker Footwear Group, will invest US$20 million to build footwear production plants for famous brands. Hebei Xindadong Garment and Textile Company of China pledged to invest US$60 million into a garment and textile plant here. To date, more than 300 investors have invested over US$4.7 billion in VSIPs.
Thai investor Amata is planning to cooperate with Tuan Chau Group to invest US$2 billion to build a high-tech park in Quang Ninh province, after the success of Amata Industrial Park in Dong Nai province. The project is expected to be licensed this year.
Mr Dong said the attractiveness of industrial zones and economic zones in Vietnam to foreign investors is very obvious, but some barriers started to appear since 2009 like reduced incentives for investors in industrial zones and site clearance issues stipulated in Government Decree 69/2009/ND-CP.
Vietnam now has 184 out of 289 industrial zones in operation. As of the end of 2012, about half of FDI projects in Vietnam were located in industrial zones and they paid some VND20 trillion a year to the State Budget. In the first 10 months of 2013, industrial zones attracted 5,196 domestic investment projects with a total registered capital of VND461,469 billion, of which VND246,909 was disbursed, or 54 percent of the total registered capital.
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