Binh Duong Province Seeing Dynamic Development

 

Binh Duong has successfully attracted strong economic groups to develop infrastructure for industrial zones. The province has given investors maximum support for favourable location, land clearance, investment formalities and project implementation. Vietnam-Singapore Industrial Zone (VSIP) is a success story of Vietnam and Singapore by Semb Corp (Singapore) in cooperation with other Singaporean companies and Becamex IDC of Binh Duong. VSIP has become an ideal place for investments with modern facilities and high efficiency, and after 10 years of development, has attracted 230 projects and a total investment capital of some US$1.4 billion. VSIP is building an industry-service-urban area and 40 per cent of the land has been rented. In addition to VSIP, Semb Corp has also invested in the building of Highway 13 from Binh Phuoc to Thu Dau Mot to facilitate the operation of VSIP as well as the tapping of Binh Duong resources.

 

The engagement of big economic groups also affects the global investment flow. Their success in certain countries will lead to the expansion of investments as well as export markets with their global distribution channels. Consequently, their success will also attract other economic groups. They are a true promoter of investments. Binh Duong has made good use of the advantages. As a result, investor after investor, business after business keeps coming to Binh Duong. In a short period of time, hundreds of businesses from Taiwan, South Korea and Singapore have invested in the province with such strong industries as textile and garment, footwear, agricultural produce processing, construction materials, wood processing, etc. There are already several successful projects such as Uni President, CKL, Dai Viet, etc. Most recently, Kumho Tyres, a daughter company of Kumho Asiana Group (Korea) has invested over US$380 million in Binh Duong for an auto-tyre project. Mr Le Viet Dung, Deputy Head of Binh Duong Planning and Investment Department regarded the project as an impressive start for Korean investment flow in Binh Duong after Vietnam’s accession to WTO.

 

Binh Duong has also attracted investors from Europe such as Jotun Paint Group, Siemens and Dutch Lady. In addition to telecommunications and electricity, Siemens has also developed activities in automation, control, traffic and public health. Dutch Lady will build a factory with modern milk processing facilities of international standard, promoting the processing industry of high quality and safe foods. These projects will help promote the modernization of the local industry. Binh Duong will continue to attract big economic groups, especially those with high technology, service and distribution networks world wide.

 

The success of investment is also due to the development of communication and transport. Since 1997, Binh Duong has made big progress in the development of the communication and transport sector. In 1997-2003, Highway 14 - Binh Duong was built to develop VSIP. Province roads such as N.745 from Thu Dau Mot to Lai Thieu and N. 743, 746, 747 from Thu Dau Mot to Tan Uyen were built to develop industrial zones in Khanh Binh, Thuan Giao, Tan Binh Hiep, Tan Phuoc Khanh.

 

In Phase 2 (2004-2006), Binh Duong continued to develop road networks to tap the resources in the province. Phase 2 of Binh Duong road from Tan Dinh to My Phuoc – Lai Khe was built for the development of My Phuoc IZs 1, 2 and 3, Rach Bap IZ and The Hoa industrial centre. Road 742 from Thu Dau Mot to Tan Uyen and Cong Xanh was built for the development of Phuoc Chanh, Phuoc My, Vinh Tan, Ninh Hoa communes, and Road 741 was built by BOT to connect Binh Duong with Binh Phuoc province. Also in 2006, 100 per cent of the bridges on the province roads have been completed.

 

In addition to the road network for immediate economic development, the province has also started the construction of the main axis for future economic development, that is the Highway from My Phuoc – Ben Cat to Tan Van – Dong Nai bridge (Binh Duong port) which includes a 30 kilometre stretch which is free of two and three-wheeled vehicles. The highway will shorten the distance by 20 kilometres, reduce the driving time and transport cost for exporters. It will help My Phuoc, Ben Cat and Dau Tieng industrial zones to tap the resources from the Northern region. The second highway from Thu Bien bridge to Phu Giao – Bau Bang and Ben Cat next to Saigon river will help develop the Tan Uyen area. The two highways will promote the fastest and most efficient export of the province.

 

The industry has continued to grow in the past 10 years, especially in the last five years. The industrial value hit VND42,000 billion in 2005, 4.6 times of 2000. The growth rate in 2001-2005 was 35.6 per cent a year. The industrial export turnover increased from US$420 million in 2000 to US$2.8 billion in 2005.

 

The main industries of Binh Duong are agricultural and fishery products processing, garments, footwear and wood processing. They make up 50 per cent of the industrial production value and over 70 per cent of the industrial workforce. The food processing accounts for the biggest share with diversified products such as milk, cashew nut, instant noodles, beverages, cigarettes, paper, etc. Several enterprises have obtained quality management standards ISO 9001:2000, HACCP. GMP and their products are both for home consumption and export. The production value of the industry was VND9,000 billion in 2005, 2.9 times of 2000.

 

Garment and footwear are the main industries of Binh Duong. Their export value was over US$820 million in 2005. Since 2000, many foreign investment projects have started production. FDI projects make up 83.7 per cent of the production value of the sectors. However, as the operation is mainly contractual work, the labour productivity was only VND42.2 million in 2005.

 

Though inadequate in materials resources, Binh Duong has quickly developed wood processing and attained US$678 million in export value in 2005, or 22 per cent of the export value of the whole province. Many foreign enterprises with modern technology and markets have come to Vietnam. Many timber importers of the world have turned to Vietnam for wood processing contracts. The growth rate of the sector in 2001-2005 was 58.4 per cent. And the markets are mainly the EU, the US, Canada and Japan.

 

Though with high industrial growth rates, the added value was only 18.1 per cent. Explaining the cause, Ms Nguyen Thi Ha, Director of Binh Duong Industry Department said that as the province is in the early stage of industrialization, market and investment pressure have led to the development of large scale. In the past, Binh Duong attracted mostly labour-intensive industries with contractual work, assembly and small added value. Most of the industries are dependent on imported materials such as garments, footwear and even wood processing. For instance, in the textile and garment sector, 60 per cent of production is contractual, 70 per cent of the materials are imported and have little added value. Furthermore, the province is without supporting industries to ensure stable production.

 

According to Ms Nguyen Thi Ha, Binh Duong needs three basic conditions: stable growth, strong enterprises and sustained international division of labour. The growth must be both in quantity and quality. The quality consists of added value, competitiveness and industrial structure, with added value as an indicator of growth. Binh Duong should shift from contractual work to technology-based industry. Strong enterprises can manage and readjust themselves in the changing environment, ensuring business efficiency and contribution to the community and environment. In the conditions of integration and trade liberalization, developing and maintaining a position in international division of labour is both vital and pressing. It is a position in the global production chain and the international division of labour.

 

To this end, Binh Duong will develop the industry to 2020 with the following priorities:

 

·         Mechanics: producing specialized and precision machines, parts and spare parts, assembling and repairing for advanced technology.

·         Electronics: producing and assembling electronic equipment for office, information and telecommunication.

·         Chemistry : processing natural rubber for medical equipment, auto industry and pharmaceuticals

·         Food processing of high quality for export.

·         Ceramic and porcelain fine art articles for export.

 

While focusing on industrial development, Binh Duong continues to develop a sustainable agriculture with cash crops, more materials for the processing industry and increased food supply. Though agriculture has decreased in structural proportion, it has continued to increase in production value. The growth rate remained at 5.56 per cent for the period of 2001-2005. In 2006, the production value of agriculture, forestry and fisheries was VND1,697 billion, up by 5.7 per cent.

 

To maintain high efficiency and production value, the sector has encouraged farmers to transform the production structure, increasing the area for long-term crops of high economic value, raising more pigs, cows and chickens with automatic and semi-automatic technology, meeting the demand of market and ecology and increasing the non-agricultural workforce. Certain projects will be implemented such as the improvement of cashew nuts in 2001-2010, Lai Thieu fruit quality and cows milk in 2006-2010. Over 200 demonstrations of new technology are organized every year for agricultural production, animal husbandry and aquaculture. Some 10 new species of plants are introduced each year.

 

Binh Duong has quickly increased the area for the plantation of new strains of high yield and better quality products for consumption. The areas for rubber and cashew nut – high value export items, are leading in the region. 90 per cent of the plan has been completed by the end of 2006.

 

Binh Duong will continue the development of high yield and quality agricultural products for home consumption and export. The province will restructure the agricultural production, upgrade the quality and processing, apply high technology and combine processing with cultivation. This will reduce transport cost, improve relationships between farmers and entrepreneurs and promote trademarks of main agricultural products.

 

There are more and more retail sales models in Binh Duong : supermarkets, commercial centres, specialized business centres, showrooms, etc. Six supermarkets and four commercial centres have been established. Di An alone already has Saigon Outlet Mall, Vinatex and Hai Long, particularly Saigon Factory Outlet Mall which is attracting both entrepreneurs and consumers. Producers will sell commodities directly to consumers without intermediaries so producers can promote their trademarks more effectively. Consumers can also have an ideal place to buy directly from producers at lower prices. Saigon Outlet Mall is designed with several sections: shopping area (home decoration, electronics, furniture, fashion, and foods), restaurants, recreation centre and theatre for cultural performance.

 

The province has also a network of urban and rural markets developed by private sectors. Rural markets are not only rich in commodities but also ensured in quality, food safety and better business methods. At showrooms producers can introduce their specialized products: ceramic, porcelain, lacquer, electronic, motorbike, automobile, etc. Ms Nguyen Thi Dien, Director of Binh Duong Trade-Tourism Department pointed out that businesses in Binh Duong are no longer small traders; they are true entrepreneurs with market knowledge, new business approach and long-term vision.

To enhance efficient trade and its role in the economy, Binh Duong has developed trade culture and encouraged its application by small traders and commercial centres. Human resources have been upgraded with high expertise and sense of responsibility. Associations are being formed to strengthen the relationship between wholesales, retail sales and supermarkets to ensure healthy competition. In 2006, the province also established the Association for Protection of Consumers’ Interests.

 

The province will build an exhibition and trade fair centre to help small and medium enterprises introduce their products. An e-commerce portal will be developed to encourage business activities by means of networking.

 

In the past 10 years, the first task of education in Binh Duong is to promote economic growth. As a result, education and training have been expanded, enrolling young people and producing skilled workers to meet the demand of socio-economic development. The province helped establish private schools such as Huong Viet Hi-tech Training School, Binh Duong College, Economic and Technical High School, increasing the enrolment of private schools to 4,612 students out of the total of 7,410 (62.24 per cent). The province has 28 training establishments (13 private establishments) with 17,000 trainees in 2006. However, there is a serious shortage of trainers. To attract trainers, the province has granted scholarships to students in order to recruit them back to the province.

 

The province has also developed relationships with several universities to multiply education faculties and levels. For example, the cooperation with colleges in Ho Chi Minh City has attracted over 2,000 students a year. So far, thousands of graduates have returned and upgraded the education standard of the province. International cooperation has also been promoted: Huong Viet private school has obtained foreign capital and technology for the processing industry; Economic and Technical High School together with Malaysian partners have signed two MOUs on training; Agriculture and Forestry School and Korea International Cooperation Agency (KOICA) have concluded an agreement on volunteers to help farmers in the province. Recently, Vietnam-Singapore Technical School has started operating with investment capital of VND110 billion and modern facilities. It will supply skilled workers to the province.

 

In the next 10 years, Binh Duong will mobilize local resources to upgrade education and training, ensuring human resources for the province and Vietnam in general. All establishments, public and private, local and foreign, will be encouraged to participate in the education and training.

 

The workforce has increased in the past 10 years. However, with the development of new enterprises, the demand of the workforce is some 40,000 workers a year while the local supply is only 15,000-20,000. To ensure an adequate supply of workforce, the province has adopted a most efficient policy to attract human resources.

 

As 70 per cent of enterprises still require ordinary workforce, the province has assisted them in obtaining labour supply. Mr Nguyen Phung Trung, Deputy Director of Labour, Invalids and Social Affairs Department said that Binh Duong, in conjunction with 11 other provinces, have assisted guest workers in their expenses for travel, training and lodging. Seminars have also been organized to promote the training and recruitment of the workforce. Cooperation will be encouraged to ensure the training meets the demand of the production and the interests of the workers.