Hau Giang applying efficient IZ plan

June 21, 2023 | 11:00
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Industrial development, particularly production at local industrial zones, is deemed the focal task to spur socioeconomic development in the Mekong Delta province of Hau Giang this year and beyond.
Hau Giang applying efficient IZ plan
Part of Phu Huu A Industrial Cluster’s third phase in Hau Giang province

Tran Ngoc Hung, director of Hau Giang Industrial Zones Management Authority, noted last week that the province plans to develop seven new industrial zones (IZs) covering over 1,740 hectares this decade.

Before 2025, the province aims to develop three new facilities over 784ha: Dong Phu 1 and 2 as well as Song Hau 2, all in Chau Thanh district. During 2026-2030, four more IZs will be planned: Nhon Nghia A, Tan Hoa, Tan Binh, and Long Thanh.

In addition, the province is to accommodate 10 industrial clusters (ICs) before 2025, then leading towards 2030 will focus on perfecting technical infrastructure and enticing businesses, along with expanding Vi Binh cluster in Vi Thuy district. From 2031-2050, Hau Giang will accommodate 15 ICs, covering more than 900ha.

To accelerate the pace of construction to create a motivating force for socioeconomic development, Hau Giang is stepping up efforts to effectively handle the land and resettlement policies, striving to stabilise the life of affected people; boosting investment attraction; increasing vocational training; and working on the planning of material growing areas,

Efforts will be geared towards creating a cleared land bank and facilitating infrastructure investment to draw businesses to the province, creating competitive advantages to welcome investment into the Mekong Delta region.

Due attention will be paid to expediting transport engineering projects that bridge regions and national transport backbones with local IZs and ICs, and major commodity production areas.

Hau Giang will also plan urban and service areas and residential blocks for related developments.

Investment magnet

Currently, Hau Giang is home to two IZs and three ICs, as well as Song Hau Power Centre, which has a 70 per cent occupancy rate.

Meanwhile, the first phase of Song Hau IZ has already been filled with investors; phase 1 of Tan Phu Thanh IZ is reporting an occupancy rate of 80 per cent; and phases 1 and 3 of Phu Huu A have been filled by investors. Phase 1 of Dong Phu IC reported an occupancy rate approximating 23 per cent.

Hau Giang’s IZs and ICs are contiguous to Can Tho city, a vibrant development centre in the delta region, and favourable for both road and waterway transport. By road, they adjoin main highways such as South Song Hau Highway and Highway No.61C.

By waterway, they connect the Hau River, the Ba Lang River, the Xa No channel, and the Cai Cui international seaport system, as well as VIMC Hau Giang Port. They are accessible to large ships from 10,000-20,000DWT, favourable for the transport of goods and materials for production and export.

For airways, Hau Giang IZs and ICs are just 20km from Can Tho International Airport. Besides a convenient location, they sit on diversified agricultural and aquatic input material sources of the delta, which is believe to be a great advantage to draw investment into developing local processing industries.

Particularly, these IZs are located in areas with extremely difficult conditions for development, so they are entitled to the highest incentives according to current regulations.

The IZs and ICs are the focus of investment attraction, providing jobs to many labourers in the province and surrounding areas. According to Hau Giang Industrial Zones Management Authority, they are home to 75 businesses implementing 77 projects, including 13 foreign-invested projects with a total domestic investment capital volume reaching $3.4 billion, and the foreign investment capital touching $3.85 billion.

Of these, 54 projects have been put into operation, creating jobs for about 26,000 workers; while 23 projects are in the process of site clearance and construction.

These facilities have made significant contributions to Hau Giang’s economic development. In 2022 alone, IZs posted $1.54 billion in gross industrial output, and the local export value reaching $615.8 million, accounting for more than 80 per cent of the province’s total export value. They contributed $63.3 million to state coffers, accounting for one-quarter of the province’s total budget revenue.

Hau Giang applying efficient IZ plan
VIMC Port at Song Hau Industrial Zone’s first phase in Hau Giang

Criteria to select investors

To enhance the investment attraction efficiency into province’s IZs and ICs, Hau Giang People’s Committee enacted Decision No.1748/QD-UBND in October 2022, regulating the criteria to select investors to local facilities.

For secondary investors, equity must be at least 20 per cent for projects with an area of less than 20ha, and 15 per cent for projects with an area from 20ha or beyond, compared to the project’s total investment. Priority shall be given to investors with higher equity.

Projects should contribute from VND10 billion ($43,500) per year per hectare to the provincial budget after the tax incentive period, and priority shall be given to selecting the investor with the highest contribution and using local resources. The project investment ratio comes from VND50 billion ($2.1 million) per hectare or more, except for the warehouse industry.

Ventures should also have feasible and environmentally friendly management and environmental protection plans, applying cutting-edge technology, using skilled labourers, and prioritising local labourers.

Investors who get on par with the aforementioned criteria and engage in industries set for investment attraction in the province’s IZs will be considered by the investment registration agency to carry out the process of investment policy approval as regulated.

As for the criteria to select investors to carry out ventures on related infrastructure construction, the investor’s equity capital must be at least 15 per cent of the total project investment.

In terms of experience, the investor must complete at least one project to build an equivalent IZ in localities with vibrant industrial production such as Binh Duong, Vung Tau, Dong Nai, Bac Ninh, Bac Giang, or Quang Ninh.

IZs must also report an occupancy rate of at least 60 per cent or more, and be capable of attracting secondary investors, especially foreign-invested enterprises.

Priority industries to draw investment into Hau Giang IZs and ICs are high-tech and green fields; warehousing and logistics; electronics, computers, and optical products manufacturing; manufacture of electrical equipment; and energy-saving item production, among others.

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By Truc Giang

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