Trang Bang Industrial Zone - An Ideal Investment Destination

3:26:23 PM | 7/8/2005

Trang Bang Industrial Zone - An Ideal Investment Destination

Trang Bang was the first industrial zone (IZ) of Tay Ninh province (founded under Decision No.100/QD-TTg dated February 9, 1999 by the Prime Minister) established when Vietnam, especially the South Eastern region was home to numerous IZs.

Establishment and development

In 2000, Trang Bang IZ officially came into operation with its first ten members including two leaders and eight specialists. The IZ was initially divided into two investment phases.

The first phase was split into two steps:

Step 1: It built up the infrastructure (70 ha) and made in-turn investments. Till mid-2001, the entire IZ was fully utilized by enterprise investments. In late 2001, an area of 23 hectares was added to the IZ and by the end of 2003 enterprises fully covered the additional area.

Step 2: The IZ has joined with TANIMEX Tan Binh, occupying an area of 104 hectares. Currently, 70 per cent of its infrastructure has been completed. Also adopting in-turn investment, there have so far been 12 investment projects on 14 hectares, representing 20 per cent of the total estimated investment projects within this step. In addition, the IZ has signed an agreement on some 30 hectares more with investors. Continuing with the current investment pace, the number of investment projects in this step is forecast to be complete by the first quarter of 2005.

The second step of the IZ is assigned to three infrastructure investors, namely Linh Trung Sepzone Company (203 ha), Saigon Trading Corporation (190 ha) and Cholimex (160 ha). The construction progress rate of Linh Trung IZ has presently fulfilled 90 per cent of the set target with two investment projects (2.5 ha). The two remaining investors are currently devising their detailed plans.

Trang Bang IZ has to date attracted 45 investors with a total capital of over US$95 million. As many as 29 projects are proceeding. Total export turnover reached US$53 million for 2003 and US$31 million for the first six months of 2004. Total export turnover of 2004 is predicted to rise by 20 per cent on-year. Coupled with the investment in infrastructure, the IZ's Managing Board has kicked off works out of the IZ in co-ordination with local authorities. In order to resettle households in cleared areas, Tay Ninh has allocated an area of 200 hectares to the provincial infrastructure development and investment company to enable the construction and business of the workers'residential and resettlement areas.

Transforming into a perfect investment destination

In spite of having some initial advantages, Trang Bang IZ still faces difficulties. Labourers' qualifications remain at a low level. There are 8,181 labourers in total working in the IZ. The enterprises themselves must train their employees. A number of experienced and highly-qualified labourers come from Ho Chi Minh City. To surmount the situation, the province is determined to set up a vocational training school to meet the demand for skilled labourers in the IZ. Moreover, local services for workers, enterprises and experts remain inadequate. In the first half of this year, the IZ lured six new investment projects including four foreign-invested and two local-invested projects which were capitalised at US$4.6 million and VND15 billion (US$961,500). Trang Bang IZ is generally home to small and medium-size projects with an average investment of US$1.5 million and 1.5 hectares per project. The projects fall in the group of light industrial consumer goods production, using a large number of labourers (300 people per project on average) and exporting 80-100 per cent of their products. Of the 23 profit-making projects, only one sells 80 per cent of its products in the local market while the rest are 100 per cent export firms.

At present, Trang Bang IZ fails to attract large projects with advanced technology from Europe and North America. A majority of the IZ's investors come from Taiwan. Trang Bang IZ was opened later than others in the South Eastern region. However, it has made some achievements thanks to its own advantages. Trang Bang is seen as an IZ with low leasing costs and an adopter of the one-stop mechanism. At the same time, its Management Board uses a synchronous network to receive, manage, report and deal with files. Notably, the board completes all procedures within 24 hours for projects under US$5 million. Under the IZ's development orientation to 2005, the Managing Board targets to fill an area of 500 hectares by the end of 2005, raise total registered investment capital to approximately US$300 million and attract around 50,000 new labourers. Reviewing past results and development strategy for the future, Trang Bang IZ is on the right track and is increasingly drawing the attention of domestic and foreign investors.