Vinh Phuc to Become Industrialized by 2015

 

Being a north-western gateway to the capital city of Hanoi, Vinh Phuc, a midlands province, maintained annual GDP growth rate of 14 percent-16 percent over the past years thanks to its economic restructure and industrial park (IP) development.

 

Vinh Phuc will have 14 new IPs with a total acreage of 5,576 hectares by 2020 and will become an industrialized province by 2015.

With the slogan of “All investors in Vinh Phuc are provincial residents and corporate success is the provincial successes and pride”, the province attained an economic growth of 17.77 percent with per capital income of VND21.1 million/year in 2008, up 34.4 percent from a year earlier. Last year, Vinh Phuc had a record state budget revenue of VND9,228 billion ($517.67 million), created 21,200 new jobs and reduced the provincial poverty rate to 10.4 percent. The province attracted 124 new investment projects in 2008, including 31 foreign directed investment (FDI) projects and 93 domestic direct investment projects. The figures had raised the total number of FDI projects to 100 capitalized at $1.98 billion and the number of DDI projects to 265 worth VND15.5 trillion by the end of 2008. A total of 15 countries and territories have had investment projects in Vinh Phuc by that time, including big Taiwan groups of Compall and Hong Hai. Vinh Phuc was ranked among the leading investment attraction destinations nationwide and was ranked the third in terms of PCI after Danang city and Binh Duong province. Almost FDI projects in province are quickly and effectively implemented. In addition to the increasing number of new projects, many investors had expanded plants and raised investment capital at their current projects, which has proven their confidence in business environment there.

In order to lure more investment, the province has built a large number of important roads, particularly roads inside industrial parks and urban areas. In addition to investment of over VND1 trillion in infrastructure projects, Vinh Phuc is calling eligible investors in this field under the BOT (Build-Operate-Transfer) and BT (Build-Transfer) forms. The operation of the provincial spine road, National Highway No. 2A, running from Vinh Yen to Noi Bai has not only helped ease traffic jams but also opened new chances to attract more investment. Other important roads have been completed, including the road linking the Binh Xuyen IP to Ba Thien IP, the Nguyen Tat Thanh road linking four IPs together, National Highways No. 2B and 2C, and the road linking Dai Lai to Dao Tu. Concerning clean water, the province is calling for investors in a project to build a clean water treatment plant using water sourced from the Lo River. Regarding electricity, provincial authorities have reached an agreement with the state-owned Electricity of Vietnam to ensure sufficient electricity supply for production in the province. In term of communication, telecom companies have provided services to every IP.

Vinh Phuc targets to attract investment projects capitalized at $2.5-$3 billion by 2010, with 50 percent-60 percent of which could be disbursed. By that time, the province hopes export revenues by investment projects will account for 90 percent of the provincial total export revenue, contributing 80 percent to its state budget and generate 1,500-2,000 new jobs. At present, the province is focusing on calling investment in high-tech and supporting industry sectors in order to gradually form a high-tech centre there. At the same time, the province is calling investment from traditional countries and territories of Japan, South Korea and Taiwan and aiming to lure new investors from the U.S. and Europe to invest in tourism, services and agriculture in order to ensure level development with priority given to cleaner industrial and environmentally friendly projects. In the circumstance of the global economic recession and narrower domestic consumption, Vinh Phuc will continue to curb inflation, prevent deflation, boost industrial development, improve investment environment and effectively mobilize investment and development resources on the basis of sustainable development. The province is speeding up programming, building infrastructure, training human resources, developing urban areas and tourism and accomplishing investment incentive policies in order to create favourable conditions for investors to do business.

 

Vinh Phuc is among the hardest hit by the global economic crisis as industrial and service sectors contribute up to 60 percent to its economy. The provincial Party Committee Secretary Trinh Dinh Dung said the locality has lowered almost its economic indicator targets. The provincial total investment is estimated to reach VND4,068 billion, accounting for 34.5 percent of its full-year target and down 18.6 percent from a year earlier. In the first six months of this year, the provincial state budget revenue is estimated at VND3,821 billion, down 40.9 percent from a year earlier and completing 38.2 percent of its period target.

 

Of the sum, domestic collection is estimated at VND3,131 billion and tax collection at VND700 billion, down 24.2 percent and 33.6 percent from a year earlier, respectively. In the six-month period, the province attracted five new FDI projects worth $80.5 million, down 61.5 percent and 45.4 percent, respectively, from a year earlier. In the same period, the province had 35 DDI projects capitalized at VND1 trillion, down 5.41 percent and 38.5 percent, respectively, from last year. FDI disbursement is estimated at $89.8 million in the first half, up 42.77 percent from last year and DDI disbursement at VND620 billion, equal to the same period last year. Industrial production of FDI sector has not yet shown signals of recovery due to various obstacles to finding product outlets, particularly auto and motorbike sectors.

 

The provincial People’s Committee’s Chairman Nguyen Ngoc Phi said the province has not yet effectively responded to negative effects by the global economic crisis due to both objective and subjective issues. However, Vinh Phuc will strive to attain the growth of 3.5 percent this year thanks to the government’s demand stimulus package, Phi said. In response to the global economic crisis, Vinh Phuc is taking drastic measures to deal with shortcomings by particular sectors to boost post-crisis development, continue to build a favourable business environment to attract more investment.