|WHA Industrial Zone 1, Nghe An |
The first investors have already started setting up operations at WHA Industrial Zone 1 – Nghe An, launched just three years ago in the central province of Nghe An.
The moves add to the prominence of Vietnam as a leading recipient of foreign direct investment (FDI) and its growing status as a key manufacturing hub in ASEAN, especially in the electronics industry.
After showing constant growth for the past decade, Vietnam has become one of the fastest-developing economies in Southeast Asia. High domestic demand, a strong manufacturing industry, vigorous exports, plus government efforts to attract investors and facilitate businesses, have helped boost the national economy.
According to the Ministry of Planning and Investment’s official statistics, Vietnam continues to attract large inflows of FDI, with $28.53 billion in registered capital in 2020, equal to 75 per cent of that in the same period of 2019.
Both the central government and provincial authorities recognise the importance of developing industrial zones (IZs) to welcome local and international investors.
Measures are being introduced to attract investment in a range of industries to create clusters, with the objective of playing a bigger role in the global value chain. They also offer tax and other incentives to bolster local production and promote anchor companies in IZs throughout the country.
The electronics industry is one of the key sectors where Vietnam is fast becoming a major manufacturing hub. Foreign investors are allured by the country’s geographic location, its competitive labour costs, and its access to ASEAN markets and beyond.
Several multinational groups have invested heavily, bringing in other competitors and satellite companies to the playing field. The electronics industry now represents 35 per cent of the country’s total exports, making it the top export sector, followed by textile and agro-food industries.
Goertek Precision Industry Vietnam Co., Ltd. is a good example of foreign investment in the electronics industry. Specialising in micro-electromechanical systems, Goertek recently held a ground-breaking ceremony that kicked off the construction of its new facility in WHA IZ 1 – Nghe An.
Last October, the company purchased land with an area of 40.48 hectares to build a factory complex for the manufacturing of mobile phone electronic components, such as air pods. It joined other investors from various origins and sectors that also selected WHA IZ 1 – Nghe An for their operations in Vietnam.
WHA Group, Thailand’s leading developer of logistics properties, industrial estates, industrial utilities, and power, as well as a provider of digital services, launched its first industrial estate in Nghe An province in February 2017.
Three years later, 50 per cent of phase 1, representing 145ha, is already occupied by the first customers. Coming from China, Hong Kong, Japan, Thailand, and Vietnam, their businesses cover sectors such as automotive parts, machineries and equipment, food processing, plastics parts, electronic components, and cement.
This year, WHA Group will continue with the pre-construction steps for the remainder of phase 1 (336ha), phase 2 (528ha), and phase 3 (272ha). Upon completion, WHA IZ 1 – Nghe An will be one of the largest IZs in the north-central coast region, covering an area of 3,200ha.
Developing additional space
Encouraged by its initial success in Nghe An province, WHA Group announced in last December the signing of an MoU with Thanh Hoa People’s Committee for the development of two new IZs.
Positioned to attract high-value technology companies, the first one will be named WHA Smart Technology IZ – Thanh Hoa, representing a gross area of approximately 600ha, plus an additional residential area of 30-50ha.
The second project, to be named WHA Northern IZ – Thanh Hoa, with a gross area of approximately 540ha, will target downstream industries, including plastics, rubber, chemical and bio-chemical products, metal fabrication and foundries, building materials, automotive parts, mechanical assembly, appliances, and others. Considering the usual process for obtaining the projects’ licences and approvals, construction is expected to commence in 2023 and 2022, respectively.
“After successfully launching our first IZ in Nghe An province three years ago, we are delighted to embark on this new partnership with Thanh Hoa People’s Committee,” Jareeporn Jarukornsakul, chairman and group CEO, WHA Corporation PCL, said.
“Within the past few years, Vietnam has become an important industrial and manufacturing base in ASEAN. It is now a destination of choice for international investors in various industries, including high-value technology businesses.”
|David Nardone, group executive Industrial and International, cum vice chairman of WHA Corporation PCL |
David Nardone, group executive Industrial and International and vice chairman of WHA Corporation PCL, commented, “These two new developments in Thanh Hoa province will reinforce our presence and growth strategy in Vietnam. Both projects offer location advantages to target specific market opportunities.”
In his words, the first project, with its 12km proximity to the province’s main city and available educated workforce, will capture demand from high-value technology companies. The second project, located near the well-established Nghi Son petrochemical complex, will further enable the integration of the petrochemical and metal supply chains.
To meet its investors’ expectations and provide them with development opportunities, WHA Group will continue to place emphasis on the quality of infrastructure construction and maintenance, including traffic management, power grid, water supply and drainage, as well as wastewater treatment according to environment-friendly standards.