Localities benefiting from industrial zone squeeze
Localities benefiting from industrial zone squeeze
Many emerging localities in the north and north-central coast become a magnet to attract foreign investors in the context that many industrial zones in large cities and provinces are full.
Taiwanese laptop maker Compal Electronics is accelerating procedures to kick off construction of a $260 million manufacturing facility this quarter.
The new facility will be located in Lien Ha Thai Industrial Zone (IZ) in the northern province of Thai Binh. Representatives of Compal and investor Green i-Park signed an agreement to rent land in the IZ in December.
The facility is expected to commence operations by mid-2024. Once completed, it will have capacity of over four million products per year, involving items such as smartwatches, 5G modules, Internet of Things-based equipment, and tablets.
Compal’s factory is the seventh in Lien Ha Thai IZ. Its other ventures involve high-tech activities funded by enterprises from Taiwan, South Korea, Japan, and the United States, such as the $120 million Lotes project to produce computer connections, and the $200 million Greenworks project on manufacturing smart garden equipment.
Bui The Long, general director of Green i-Park said, “Thai Binh in general has advantages in land, mechanisms, and incentive policies. The provincial authorities also support and create favourable conditions for the company’s investment promotion activity.”
The province is opening the door to welcome investors, Long added. “Along with our activities, many other investors from South Korea and Japan are paying attention to our IZ to develop high-tech projects.”
Thai Binh and many other localities in the north and north-central coast have become a spotlight in attracting foreign direct investment (FDI) capital.
Nghe An is another example – in 2018, the province attracted only $25.7 million in FDI and ranked near the bottom of all provinces. However, in 2021, Nghe An garnered $318.5 million from overseas and jumped to 25th among the 60 cities and provinces with FDI capital. In 2022, the position continued to improve when the province lured $890.67 million and climbed to 11th position for the whole year.
These breakouts are thanks to various locality advantages in the context of almost all IZs in large cities and provinces are out of space.
According to statistics published by Savills, IZ supply sources in the six key provinces of the north is currently at an average fulfilment ratio of 83 per cent. Especially, the ratio in Hanoi, Bac Ninh, Bac Giang, and Binh Duong is 95-96 per cent.
Localities such as Dong Nai, Danang, and Haiphong have lost out on opportunities to attract newly registered projects due to a lack of industrial land. Besides that, the room to expand new zones in these localities is narrow. Land clearance and selection of quality investors is also an ever-present issue.
Meanwhile, in emerging localities like Vinh Phuc, Nghe An, and Thai Nguyen, the room to attract foreign investors to IZs is substantial. For example, in Nghe An, six of 11 planned zones are being operated with a fulfilment ratio of 41.9 per cent. In addition, they have advantages in the speed of land clearance.
Long of Green i-Park said it took 10 months to complete the land clearance for nearly 540 hectares at Lien Ha Thai IZ, which is a province record.
In general, emerging localities understand their potential and are proactive in improving the investment and trade environment in terms of traffic, industrial infrastructure, and improving the labour force. They determine key tasks to attract more foreign-invested capital, including those willing to innovate, reform, and improve its business environment and being ready to provide support.
The localities also renew their investment promotion efforts, diversify forms of implementation, systemise data on investment promotion, and maintain regular dialogue between provincial authorities, relevant bodies, and investors to quickly resolve any shortcomings in the implementation of new or expanded ventures.
During a conference to promote Vietnam-Japan investment on January 8 in Vinh Phuc, Yamamoto Kenzo, director of Concele Company, said it is looking for new opportunities in the province. “The key factors that impact our decision are the traffic infrastructure, the water supply and drainage system in IZs, and the accommodation for Japanese experts as well as other skilled employees,” he said.
