Japanese funding on Hai Duong radar

Secretary of Hai Duong Party Committee Pham Xuan Thang (second from right) and Japanese Ambassador to Vietnam Yamada Takio (second from left) meet representatives from the Vietnam-Japan Friendship Association and Japan External Trade Organization. Photos: Ta Duan- Thanh Chung

The 2022 Japan Business Conference on the potential and opportunities for foreign direct investment was set to take place on May 30 in the northern province of Hai Duong, offering up opportunities for investors to exchange cultural signatures. At the same time, companies can enjoy the Lychee Festival, Chu Dau ceramics, and other local specialities that are sold from Hai Duong to many places around the world, including Japan.

In early April, the province held a meeting with Yamada Takio, Japanese Ambassador to Vietnam so as to promote investment in the province. At the meeting, Pham Xuan Thang, Secretary of Hai Duong Party Committee, proposed that Takio along with the Japanese embassy and Japan External Trade Organization continue to promote Hai Duong’s potential to their investors and businesses.

Takio recommended that Hai Duong should introduce its provincial competitiveness for Japanese enterprises such as infrastructure, human resources, labour costs, and tax incentives. In addition, the ambassador hoped that Hai Duong would hold training programmes to strengthen the relationship as a “reliable, stable, and long-term partner”.

Meanwhile, Thang said, “We will continue to connect people with people and businesses with businesses. We will engage in a variety of promotion activities, with a focus on local promotion. We call on Japanese businesses to actively support the province in building investment programmes and serve as a bridge to introduce other potential investors.”

According to Hai Duong Department of Planning and Investment, the province is home to 65 Japanese-invested projects, capitalised at $1.4 billion. In the province, Japan ranks second in the number of foreign-invested projects and investment capital, at 13 and 16 per cent respectively.

The Japanese have made greenfield investments in industrial zones (IZs) in various areas in Hai Duong such as manufacturing, electronic components, mechanical components, telecommunications equipment, casting and molding, automotive wires, and more. On average, Japanese investors poured about $24 million into each project.

These investors spent a large amount of capital turning Hai Duong into their manufacturing bases, such as Sumidenso Vietnam Co., Ltd (over $120 million), Brother Vietnam Co., Ltd (over $253 million), UMC Electronics Vietnam (over $100 million), and Uniden Co., Ltd. (over $85 million).

Approving development

Dai An Industrial Park has become a magnet for Japanese investors

Le Hong Dien, director of Hai Duong Department of Planning and Investment, stressed that Japanese projects have been implemented on schedule with efficiency. “Most businesses adopt modern and clean technology in line with the government’s regulations on environmental protection. In particular, most of the projects not only offer good salaries and welfare policies but also create a healthy working environment for workers,” Dien said.

At present, Japanese investors in Hai Duong have employed 40,000 local employees.

Kurihara Kiyokazu, general director of Sumidenso Vietnam Co., Ltd., said that Hai Duong offers ample potential for Japanese investors. “For example, Dai An Industrial Park is a promising destination to lure investors, especially in the fields of IZ development, resort services, and supporting industries, which are also the key focus area for the partnership between Japan and Vietnam,” Kiyokazu said.

“Since the pandemic is subdued, both parties need to sit together and figure out a new development goal. Japanese businesses expect Hai Duong to offer more flexible incentives to attract high-quality projects,” he added.

The Vietnamese government has approved Hai Duong’s list of IZ development planning, which includes 18 IZs with a total area of 3,517 hectares. According to the planning, 11 have been put into operation, and infrastructure construction has been implemented with a total detailed planning area of 1,732ha. The infrastructure in the construction area is 1,470ha, while the IZs have an average occupancy rate of 83 per cent.

The province has been greenlit by the prime minister to invest in four IZs covering nearly 760ha, as well as develop two existing IZs embracing nearly 340ha. The projects increase the total detailed planning area of IZs in Hai Duong to 2,567ha. In 2022, the province started to implement site clearance and construction works for all newly-established and extended IZs.

In addition, the province also plans to develop IZs in Binh Giang and Thanh Mien districts, totalling 9,230ha. Among them, roughly 5,000ha is earmarked for developing industrial land to woo large-scale IZ investors with modern and clean technology. Hai Duong also focuses on developing high-tech parks, integrated townships, and industrial parks with an entrepreneurship and innovation centre at the heart.

Furthermore, the province has also formulated a comprehensive master plan of its transportation, urban, and logistics systems to support industrial development both locally and regionally.

Earning trust

Tran Anh Tuan, director of Hai Duong Industrial Zones Management Board, said that the province strongly recognises the importance of Japanese investment here. At the same time, the province also plans to lure more in other IZs such as Dai An Industrial Park (phase 2), expanded the IZs of Tan Truong, Phuc Dien, Kim Thanh, and Gia Loc.

Aside from electricity and electronics, which are currently the main fields for Japanese investors, there are numerous potential fields, including high-quality infrastructure, energy, supporting industries, logistics, technology transfer, and human resources training. More attention has been paid to agriculture, consumer goods production, supporting industry, trade, and services.

Hai Duong has made a significant step forward in enhancing the investment climate, as evidenced by an impressive rise of the Provincial Competitiveness Index from 47th to 13th place in Vietnam between 2020 and 2021. Hai Duong has been listed among the top 20 cities and provinces due to its strong ranking.