Key southern region needs support to develop warm investment climate

In southeast Vietnam many industrial parks and manufacturers needed supporting industries to increase their competitive edge, said Nguyen Van Lai, director of the Ho Chi Minh City Department of Industry and Trade.

Seventy per cent of the raw materials used in manufacturing and assembly in Vietnam is imported and exporters are crying out for a strong supporting industries in Vietnam. This was the message from the 13th Conference on Industry and Trade in Ho Chi Minh City last week.

Exports from southern provinces are considerable, but few are high-quality processed products. Assembly and raw material processing was king in the region, said Vu Van Long, vice director of the Ba Ria-Vung Tau Provincial Department of Industry and Trade.

The region was the only area that is recording a trade surplus, while everywhere else in Vietnam has a trade deficit. In 2011, the area had a trade surplus of $11.3 billion, it was reported at the conference.

However, exports from the area were mainly semi-processed products and assembled products with low added-value, while what was imported was expensive equipment, raw materials and industrial products. In addition, imports increased the demand of foreign currency and reduced the competitive edge of domestic products.

Tran Nguyen Nam, deputy director of the Ministry of Industry and Trade’s (MoIT) Domestic Market Department, said a special programme was needed to encourage the growth of supporting industries in Vietnam.

Nguyen Van Khoa, vice director of Dong Nai Provincial Department of Industry and Trade, said: “Let corporate income tax remain at 10 per cent for the first 15 years and provide a land tax exemption for the first 11 years for a supporting industry project.” Long suggested a supporting industry bureau be established. “We are implementing a plan to develop an industrial zone that will attract investment in supporting industries from Japan,” said Long. Recently, Dong Nai established a 280 hectare Long Duc Industrial Park to call for supporting industry investors from Japan.

In a similar development, Ho Chi Minh City is negotiating with Japanese partners to build a 200ha zone in the Hiep Phuoc Industrial Park for supporting industries.