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“With a view to luring $4 billion in total committed capital and achieving a 15 per cent hike in the export value and 30 per cent hike in tax revenue from 2011-2015, Ho Chi Minh City industrial zones (IZs) and export processing zones (EPZs) will shift into wooing investment projects in areas turning out highly added value products and employing environmentally friendly technologies and skilled workforce. Luring investment into supporting industries and associated services is also a priority,” said Ho Chi Minh City IZ and EPZ Authority (Hepza) chief Vu Van Hoa.
Dong Nai IZ Authority deputy head Nguyen Manh Van said from 2012-2015 the provincial authorities would continue putting close eyes on fresh projects into IZs with incentives given to labour saving, hi-tech and supporting industries.
“Dong Nai just turned to the prime minister for permission to open some sub-zones within provincial IZs to deepen investment into supporting industries and confer certain incentives on projects stepping into this field,” said Van.
A Binh Duong IZ Authority representative said in 2011 provincial IZs lured $818 worth of newly committed and supplemental FDI capital with a number of projects on supporting industries backed by Japanese investors such as Finecs (computer accessories), Tokyo Rope (electric cables) and Showa Gloves (gloves).
“In 2012, the province will prioritise supporting industries and scale-up efforts to wooing global manufacturers of hi-tech competitive products into the province,” said the representative.
According to Ministry of Planning and Investment’s Economic Zone Management Department deputy head Le Tuyen Cu, wooing investment into hi-tech and supporting industries was imperative to economic restructuring. However, to boost efficiency and avoid overlapping and lack of regional integrity, the coordinating role of the government and competent state agencies was of vital importance.
Besides, incentive policies towards hi-tech and supporting industries must be implemented consistently linking to particular fields with concrete standards.
According to a Hepza report, as of December 21, 2011 Ho Chi Minh City IZs and EPZs lured $1.038 billion worth fresh committed capital from 18 new foreign direct investment (FDI) projects and $198 million supplemental capital from existing projects.
Most FDI projects in the zones are small involving in labour intensive industries with low added values such as textile-garment, footwear, and electronic assembling.
The core reason was that in the initial development period the target of filling up the zones with investors to tackle unemployment and approach modern technology and management expertise from foreign partners was a top priority with little attention being paid to project selection, according to Hepza.