VSIP move into townships adds value to its IP business
Vietnam-Singapore Industrial Park (VSIP) is expanding into integrated township and industrial park projects, rather than just focusing on industrial parks alone, is aimed at improving the group’s competitiveness while also attracting global manufacturers to Vietnam. Kelvin Teo, CEO of Sembcorp Development and co-chairman of VSIP sat down for a chat with VIR’s Ngoc Linh.
Since being established in Vietnam in 1996, VSIP has grown into the most successful industrial park developer in the country with five projects nationwide. What are the key factors driving the success of VSIP?
On the macroeconomic level, VSIP is helping facilitate Vietnam’s industrialisation journey as the country strives to attract global manufacturers to the country as a production base. In the regard, VSIP is very dependent on the continuous inflow of foreign investment. The country will need to keep its doors open to foreign investors with the right incentives, laws and regulations. On our part, VSIP is focused on delivering good facilities and systems that enable manufacturers to produce at competitive levels. Sembcorp Development has more than twenty years of operating experience in the region, so we bring best practices in development and management to Vietnam. We also bring with us values of transparency, efficiency and reliability when working with our customers and partners.
When VSIP was established in Vietnam, the firm was only focused on building industrial parks. However, more recently your company has expanded into building townships. Why?
In the late 2000s, while Vietnam’s economy boomed and urbanisation exploded, we noticed increasing congestion in cities, as well as rising costs for people living in cities. We felt that integrated townships and industrial parks located in provinces close to cities which promote living, working and playing within the same site would meet the needs of both employers and their families.
As most of VSIP’s townships are located very near your industrial parks, how are townships affected by your industrial park business?
Our design has well integrated this concept, as we host non-polluting industries in our developments, we use proper zoning between industrial, commercial and residential areas, and we don’t compromise on environmental standards. At VSIP we invest in good long-term solutions to ensure sustainable infrastructure is in place.
Because VSIP is a joint venture between Sembcorp and Becamex IDC, what do you think about the co-operation between the Vietnamese and Singaporean sides?
Becamex and Sembcorp have been working together since we entered Vietnam in 1996. The foundation of our business relationship is mutual trust and respect. Most importantly, we share the same long-term vision and commitment to the country’s progress.
How is investment attraction to your industrial parks going in the first half of this year? Now VSIP has five projects in Vietnam, with FDI still on the rise what’s next for the company?
We have seen a mixed reaction in manufacturing investments in the first half of this year. Some customers have delayed their investment decisions, likely due to the riots in May in Binh Duong. On the other hand, we have customers who have pushed forward with their expansion plans. The main point is that all businesses are very sensitive to instability, and we will continue to invest in Vietnam correlative with market demand.