Concerns in Nghe An Industrial Development

Nghe An’s industry occupies 22^nd position out of 63 provinces and cities in terms of growth rate and value. Notably, some provincial industrial spearheads have been listed in the country’s top 10, including beer brewing (250 million litres/year), tin exploitation and manufacturing (ranked the 2^nd), hydropower, white stone (ranked the 2^nd); some famed industrial brands such as Meli sugar (T&L), Phu Quy tile, TH milk.

 

It’s difficult to say that Nghe An has an adequate capacity for high tech industrial development. A project manufacturing electronic chips on a large scale may need hundreds of skilled engineers at the same time, which cannot be provided overnight by provincial human resources.

 

Several years ago, given the central assistance and provincial efforts, the multi-billion dollar project of Japanese Iron Kobelco was assigned to Nghe An. However, it then encountered the restructure of material zone Thach Khe (Ha Tinh) plus the earthquake and tsunami in Japan. What remained was regret and even hurry for a project motivating the provincial development.

 

The “treasures” for Nghe An industrial development that can be taken into account include traditional resources such as 4 billion cubic meter of stone for cement production, 800 million square meters of white stone (which is only present in Nghe An and Yen Bai), forestry resources, the minerals tin and mangano. Nevertheless, some enterprises manufacturing cement have had to suspend their ambitious projects, eg Vicem Hoang Mai is hesitant to invest into a second production line, Tan Thang has suspended its production, Sai Gon Tan Ky Cement has had it’s investment license withdrawn etc. These have resulted in the provincial production of only 1.5 million tonnes (against 10 billion tonnes as planned).

 

When the national economy gets over the hard period, real estate, infrastructure investment (including public investment) will heat up, while there are a total of 20 million tonnes of cement all over the country. It means a potential market is still available for Nghe An to implement its strategy of promoting the cement industry.

In addition, Nghe An generates 30 thousand tonnes of fishery products per year, 100 thousand tonnes of sugar, 300 to 500 thousand cubic meters of wood (mainly wattle) etc. Regrettably, most of them are semi-processed. Discussing with us, Director Phan Thanh Tinh, Provincial Department of Industry and Trade said with regret that: “The turnover of US $40 million from wood export this year mainly comes from chopped wood. If there was a lamination plant, the export value would increase by 5 times”.

Turning potentials into real value takes a long time. It’s not only central support and provincial effort, but time and economic conditions that enable Nghe An to best exploit its industrial potentials.

 

Since the beginning of the year, although the provincial Department of Planning and Investment has issued business licenses for nearly 700 enterprises, there have been nearly another 2000 that had to void their tax code (half of which operate in the industrial sector). Many building materials seeing significant inventories include cement (400 thousand tonnes), 40 – 50 million tiles, 50 - 70 million bricks. The industrial growth rate in the first 9 months was 8.66 percent (against the national rate of 5.2 percent), equating to ½ of the annual plan.

 

Confronting the situation, Nghe An has organized 3 dialogues with the full participation of businesses. All related agencies, from Mr Ho Duc Phuoc – Provincial Chairman, heads of local departments and agencies have joined hands to help enterprises overcome difficulties. “What can be done, such as easing the tax burden if possible, stimulating consumption such as fostering the use of Vietnamese goods by Vietnamese, giving aid to agricultural export and addressing the banks which cause obstacles for businesses should be done with full attention”, shared Mr Phan Thanh Tinh.

 

Administrative reforms have been fostered in Nghe An with the recent introduction of a ‘one-stop-shop’ mechanism on August 13th, which has assisted and benefited businesses and individuals when they deal with public agencies. Heads of the province, departments and agencies have come to enterprises to grasp their desires and help them address difficulties.