Northern work ignites Vinh Phuc

Horst Geicke, chairman of Vina CPK - developer of the 308 hectare Ba Thien 2 Industrial Park  project in the province's Binh Xuyen district said: "Besides the improved outbound communications system in the province for several years, labour costs in China have now increased, it is a great chance for well-organised and managed parks to attract many multinational companies, especially those migrating from plants in China to take advantage of Vietnam's lower costs."

Giecke said the Chinese labour costs were expected to triple in several coming years and Vinh Phuc province parks would take the advantage.

That is the main reason for the VinaCPK, the alliance formed by VinaCapital Group's Vietnam Infrastructure Limited (VNI) - the first publicly traded fund to focus on infrastructure assets in Vietnam and CPK Group, to break ground of its $65million Ba Thien 2 IP after four-years delaying.

Hoang Thieu Son, director of the Ba Thien 2 Industrial Park said that the Vina CPK signed a 20ha parcel leasing contract with the first tenant - Vigracera Thang Long.

At the time, the Ba Thien 2's first phase comprising 65ha was handed over to Vina-CPK in January, 2011. Compensation of an additional 50ha is in progress and is expected to be completed in June, 2011. A whole of the project is expected to be finished next three years.

Recently, Italy-backed Piaggio Vietnam has just broken ground its 20,000sqm second scooter factory in Vinh Phuc due to its labour costs.

Nguyen Cong Loc, director of Vinh Phuc Industrial Park Management Department, also said that the current average Chinese labour costs was $340 per month per person, five times higher than the current average labour costs in Vinh Phuc province.

The outbound communication system in Vinh Phuc province is expected to be developed in coming years with the $1.1 billion Hanoi-Lao Cai Highway expected to be completed in 2012, the Hanoi-Lao Cai railway linking to China and a large-scale inland container depot (ICD) project have just been licenced.

Trinh Dinh Dung, deputy minister of Ministry of Construction, said: "Vinh Phuc province planned to be an ecological tourism city in the near future. So far, the industrial parks there only are allowed to call for enterprises with high technology and eco-friendly factories."

Vinh Phuc province now has 25 licenced industrial park projects with total $1.24 billion of investment capital and covering 6,000ha. However, there are only six of them set up.