Haiphong intensifies preparations to attract investment

December 17, 2021 | 10:14
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The northern port city of Haiphong is building new industrial zones with special advantages to welcome big investors and enterprises to lure in $12-15 billion of additional investment in 2021-2025.

Haiphong has set the target to build 15 new industrial zones (IZs) with a total area of more than 6,200 hectares in the 2021-2025 period.

Early this month, Haiphong Economic Zone Authority (HEZA) awarded the investment registration certificate for the first IZ infrastructure project in the chain of 15 newly planned IZs – the Lach Huyen non-tariff, logistics and industrial hub project with a total capital reaching VND11 trillion($478.26 million).

The project would cover 752ha and be located in ​​Lach Huyen international gateway port, Dinh Vu-Cat Hai Economic Zone area. It will be developed by Xuan Cau-Lach Huyen Investment JSC. The project is slated to kick-off construction in early 2022, completing the first phase in 2025, the second phase in 2030, and the third phase in 2033. Once put into operation, the project is expected to attract 40,000-50,000 labourers.

Haiphong intensifies preparations to attract investment
Le Trung Kien, head of HEZA (right), awards investment certificate to Xuan Cau-Lach Huyen Investment JSC

According to To Dung, chairman of the Board of Directors at Xuan Cau-Lach Huyen Investment JSC, the project, contiguous to Lach Huyen port system, has a favourable position for investment attraction through the incentives offered by non-tariff zone status.

Other investment incentives for businesses includes a corporate income tax (CIT) rate of 10 per cent in 15 years from the first year of earning revenue; exemption of export and import tax on goods from non-tariff zones, import goods into non-tariff zones and goods transfer between non-tariff zones; exemption of VAT and excise tax on goods bought and sold abroad and between non-tariff zones, and more.

Le Trung Kien, head of the HEZA affirmed that in order to lead the economic recovery and be ready to welcome investment inflow post-pandemic, it is necessary to quickly bring Lach Huyen, including new wharfs and Lach Huyen non-tariff logistics and industrial hub project, into operation. This promises significance, contributing to spurring Haiphong and the country’s socioeconomic development.

Shaping eagles’ nests

Haiphong aims to develop 15 additional IZs covering ​​6,200ha in total area. While the existing IZs only account for 80 per cent of space, new big IZs are expected to fuel competition. This also challenges infrastructure investors, particularly the developers of new IZs to create attractive products to charm investors, especially big ones.

The construction of ecological IZs, IZs linked with seaports, IZs, non-tariff zones; or investing in developing social housing for workers within IZs has captured the attention of Haiphong as well as IZ infrastructure businesses to ramp up attraction to investors.

Developing eco- and specialised IP models with distinct advantages and connectivity are crucial to help Haiphong ramp up appeal to investors.

Accordingly, the Xuan Cau-Lach Huyen non-tariff, logistics and industrial hub project, one of 15 new “eagle nests” built to welcome projects in diverse fields of export production, high technology, construction of warehouses, logistics, and more, is expected to hand over space to customers from January 2023.

The remaining projects are pushing up the process of legal setup to be able to receive investment certificates. Of them, five IZ projects are carrying out new establishment procedures are: Nam Trang Cat Industrial Park (IP), Thuy Nguyen IP, Tien Thanh IP, expanded Trang Due IP, and Giang Bien 2 IP.

Nine IZ projects are completing procedures to deploy over 3,466ha of total area, including Cau Cuu IP, An Hoa IP, An Hung-Dai Ban IP, Vinh Quang IP, Ngu Phuc-Kien Thuy IP, Sao Mai IP (Tien Lang 1), Vinh Quang Shipbuilding IP (Tien Lang 2), Cai Trap Island IP, and Nam Cau Kien IP (phase 2).

During 2021-2025, Haiphong aims to attract an additional $12-15 billion in foreign investment. Developing eco- and specialised IP models with distinct advantages and connectivity are crucial to help Haiphong ramp up appeal to investors.

Discussing the development orientations of Haiphong’s IZs and Economic Zones, Chairman of Haiphong People’s Committee Nguyen Van Tung said, “Haiphong has been driving the development of sustainable IZs, especially ecological ones, enhancing its competitive advantages in attracting investment and developing a sustainable environment.”

Since Vietnam has yet to deploy its first eco-IP, Haiphong has been communicating with its sister city in Japan to implement a green IP model. The city also applied to join a programme launched by the Ministry of Planning and Investment (MPI) and the United Nations Industrial Development Organization.

As a result, DEEP C Industrial Zones were approved by the MPI as one of the pilot zones to transform into an eco-IP model.

Haiphong intensifies preparations to attract investment
Workshop space at DEEP C Haiphong I Industrial Zones

Currently, there are two IZs that aim to transform themselves into eco-IPs in Haiphong, including DEEP C (540ha) and Nam Cau Kien (nearly 270ha). These eco-IPs will account for more than 16.5 per cent of the nearly 5,000ha in Haiphong’s 12 IZs.

Melissa Slabbaert, head of the Sustainable Development Department of DEEP C Industrial Zones, said that tenants at DEEP C can benefit from and resonate with sustainability values in fields like chemicals, firefighting, Internet of Things, rooftop solar energy, and road construction from plastic waste.

Nam Cau Kien IP covers a total planned area of ​​457ha. Currently, the first phase has been completed and 103ha has been occupied already. The investor, Shinec JSC, is implementing the second phase with a land use plan of 45ha in 2021 and 85ha in 2022.

Since the inception, Nam Cau Kien IP has been designed to become an eco-IP. As of now, the IP has reached more than 80 per cent of the government's standards for a standard eco-IP.

Haiphong courted $1.5 billion in foreign direct investment in 2020. In the first three quarters of this year, the figure touched around $3 billion and is expected to surpass $3.1 billion in 2021, nearly double 2020’s level.

Haiphong’s prominent advantage compared to other localities is its perfect infrastructure and transport connectivity. This allows foreign investors to save logistics costs by at least 10 per cent compared to the international practice of 20 per cent. Along with that, new IZs with a clear orientation continue to affirm Haiphong as an alluring destination to investors.

By Thu Le - Phuong Dung

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