New IPs to catch investor wave

The government recently approved plans to establish and expand 15 industrial zones (IZs) in the first half of the year, complementing the more than 100 IZs in operation and under construction across the country.
More IZs are slated for the North, including the 327ha Ba Thien and 271ha Binh Xuyen in Vinh Phuc Province. Taiwan’s Bentham International, the developer of My Xuan A2 IZ in Ba Ria-Vung Tau Province, is expected to pour in $21 million to build infrastructure for Ba Thien.
Dai An Joint Stock Company also won permission to expand Dai An IZ in Hai Duong province another 470ha.
The government also gave a green light for Quang Chau IZ to be set up on 426 ha in Bac Giang Province, Thanh An IZ on 107ha in Nam Dinh and Viet Hung IZ on 301 ha in Quang Ninh.
Southern industrial hubs continue developing infrastructure. Dong Nai won approval to set up two new IZs of 177 and 97ha and expanding Ho Nai and Dinh Quan another 271 and 150ha. Long An province will also set up two IZs on 400ha.
Binh Dinh and Ninh Thuan provinces in central Vietnam also want to attract more investment to boost economic growth, setting up the 630ha Nhon Hoi and 371ha Phuoc Nam respectively.
These IZs are keen to accommodate the growing number of foreign investors who want to set up production bases in Vietnam to tap low labour cost and bigger export markets as the result of the country’s expected admission to the WTO by the end of this year.
The Japan External Trade Organization said earlier this year that wages in Vietnam were lower than that in many other surveyed countries and this is the most attractive range for Japanese investors who are seeking cities where labour cost is lower.
Japanese companies are expanding production in northern IZs. Sanitaryware producer TOTO is due to open a $52 million factory after it invested in a $23 million plant in Hanoi three months ago.
Canon is aggressively expanding as well, opening the third factory in Que Vo IZ a few months ago, and is building another printer factory in Tien Son IZ in Bac Ninh Province.
Nguyen Thi Nguyet Huong, chair of the Nam Quang Infrastructure Development Company, said: “Developing IZs is an unavoidable trend due to stronger foreign investment flow and expanding local businesses as the result of new investment and enterprise laws.
“Most manufacturers want to locate factories in IZs because they are concerned about environment problems outside,” said Huong.
She said IZs in Hanoi fetched the highest rental rates, of $80-$100sq.m for 50 years while the level was below $30 in Hai Duong Province.
By the end of last year, the country established 130 IZs on 26,500 ha, attracting 4,516 projects valued at $18 billion in foreign capital and $6.4 billion in domestic capital.
The ministry expected foreign investment flow into the country would exceed $6 billion this year.




No. 770/July 17-23, 2006