Japan pushes up FDI into city’s industrial parks

Between this January and September, the industrial parks and zones welcomed total FDI of $341.4 million, a year-on-year increase of 114 per cent, according to Hepza, the city’s management authority of industrial parks and export processing zones.

The total capital is comprised of $63.6 million from 14 new projects and 277.8 million from existing companies.

Hepza investment manager Tran Viet Ha said in September Ho Chi Minh City issued three licences to Japanese investors for the combined capital of $170 million.

The first license went toward a $31 million industrial zone for small and medium-sized engineering firms from Japan, the first of its kind in the southern hub. Vie-Pan Techno Park is a 55-45 joint venture between Japan’s Unika Holdings and the city’s Hiep Phuoc Industrial Park Company. Vie-Pan will begin with a factory site for Japanese hi-tech businesses.

The second licence was for a $129 million injection to already operating Saigon Precision Ltd., putting its total investment capital at $219 million.

For the third license, Nidec Tosok Akiba registered an additional $10 million, bringing its total investment up to $38.25 million which will be put toward manufacturing control valves for automotive gear boxes and other car parts.

Hepza office manager Ho Xuan Lam said Hepza officials would join a Ho Chi Minh City mission to Japan this October to call for more Japanese FDI inflows. He added Vie-Pan Techno Park was initially designed to cover 13 hectares but was expected to expand to 100 hectares later.

The city is currently home to 15 industrial parks and export processing zones with an average occupancy rate of 73 per cent. However, 12 of them have 98 per cent, while the other three – An Ha, Tan Phu Trung and Dong Nam IP in Cu Chi District – have just 20 per cent as infrastructure development is still in progress.

Both FDI and Vietnamese investment into the city’s IPs and export processing zones reached $480.2 million between January and September, up 48 per cent year-on-year, said Hepza. However, domestic investment capital fell by 15.7 per cent due to economic difficulties.