Driving Force from Industrial Zones

As the world economic recession affects local and foreign investments, it has also impacts on investment projects and implementation in Vietnam. Vinh Phuc has developed its own strategy, promoting investment and trade to improve its image in the world market by ensuring a decent and efficient investment environment.

Vinh Phuc province lies in the Northern key economic region, close to Hanoi, with comparative advantages in geographical location and natural resources, most important for developing industrial zones (IZs) and socio-economic development as a whole.

 

The Resolution of XIII and XIV Vinh Phuc Province Party Congress pointed out the local determination to drive Vinh Phuc into an industrialized province by 2015 and mapped out the strategy for the development model toward 2020. To realize the goal, the province has focused on the industries, especially high- tech industries. Vinh Phuc has also strived to boost industrial zone development to attract foreign investment. The province has planned to build 23 IZs covering a total of 7,634 hectares by 2020.

 

In December 2002, the province established Management Board to attract investments. So far, the province has nine IZs approved by the Prime Minister with a total area of 2,284 hectares including those under construction or operation such as Kim Hoa (50 ha), Khai Quang (262 ha), Binh Xuyen I (271 ha), Binh Xuyen II (485.1 ha), Ba Thien (327 ha). Other approved IZs are Chan Hung (131.31 ha), Ba Thien II (308 ha), Son Loi (300 ha) and Hoi Hop (150 ha).

 

According to the development plan of the province to 2020, Vinh Phuc will have 14 more IZs with additional 5,576 ha bringing the total area to over 7.860 ha.

 

With industrial development and economic restructuring, Vinh Phuc has been regarded as a province with fast and sustainable development. While flexible mechanism has created a fine image of efficient and environment friendly investment. This has been proven by investment projects in the province. 357 investment projects have been processed by IZ Management Board including 100 FDI projects worth US$1,985.1 million and 257 DDI projects capitalized at VND15,437.32 billion.

 

In 2008, the industrial value was VND30,554.7 billion (VND3.685,89 billion by DDI and US$2,648 million by FDI, making up 97.23 percent of the industrial value of the province). The turnover of FDI projects was US$2,648 million, 18 percent more than 2007 and that of DDI projects was VND4,647.2 billion or 67.5 percent of 2007. The export value of investment projects was US$338.8 million (US$24.06 million by DDI projects and US$314.73 million by FDI projects) 8 percent more than 2007 and accounting for 96.41 percent of the total export value of the province. The revenue (excluding import-export taxes and VAT) was VND6,558.2 billion or 39.6 percent more than 2007 and making up 89.35 total budget of the province. It has also created 36,447 jobs for the province.

 

The main contribution was made by such industries as building materials, mechanics for auto and motorbike, electronic parts with companies as Toyota, Honda. Nissin, VPIC1, Vina Korea, Viet Duc steel tube, Vinh Phuc brick, Thang Long tile.

IZ development contributes to the division of labour in line with international economic integration and promotion of industry and economic restructuring. It also creates new urban and tourism areas, supporting industries, jobs and human resources, social and technical infrastructure, making Vinh Phuc an industrial province by 2015.

 

Vinh Phuc has been regarded as an province of attractive environment for investment and business, ranking third in PCI in 2008 and fourth in 2007. It shows the confidence and high evaluation of investors regarding investment environment, public service and management of the local authorities.

 

As sustainable development of IZs attracts investors, the province is making every effort to upgrade the infrastructure. Combining infrastructure with waste water treatment. Saving time for investors and increasing competitiveness of the province.

In particular, with the slogan: Openness to investment license, the IZ Management Board has fully applied “one-top shop” to save time and money for investors and together with concerned authorities remove hurdles for domestic and foreign investment projects.

 

Due to the world economic recession, some investors and projects are re-thinking of re-investment. However, certain major investors continue their investments such as Hong Hai Group (Taiwan), Compal Module Precision Co. Ltd and Compal VN.

 

Vinh Phuc considers IZ development as the backbone of industrialization and modernization of the province, “the bridge between local industry and developed world industry in both technology and economic relations”. With the support of the local authorities for the development of IZs, the IZ Management Board will make greater efforts to contribute to the socio-economic development of the province, promoting the international economic integration, and making Vinh Phuc an industrialised province by 2015.
P.V