Industrial Zones Creating Transparent and Enabling Environment for Business Operations

The investment flows into Vinh Long province increased considerably in recent years and its industrial zones have quickly become a manufacturing base for domestic and foreign investors. Our reporter has an interview with Mr. Pham Thanh Khon, Head of Vinh Long Industrial Zones Authority, on investment attraction in the province. Cong Luan reports. Cong Luan reports.

Could you please briefly introduce the picture of investment attraction and business performance of tenants in Vinh Long province-based industrial zones?

Vinh Long province currently has two industrial parks (Hoa Phu and Binh Minh) and Co Chien Industrial Cluster (Section 4). These zones, covering 413.71 ha, including 308.15 ha of rentable industrial land, attracted 68 projects as of October 2020, which disbursed VND1,853.84 billion on a total registered investment value of VND3,955.01 billion (46.87%) and US$455.93 million on a total registered value of US$766.21 million (59.5%). They hired 139.5 ha out of 297.92 ha of rentable area (46.82%). Currently, the occupancy rate of Section 4 - Co Chien Industrial Cluster is 97% on average. The average investment rate is VND69 billion per ha.

From 2016 to the end of 2019, most tenants operated very efficiently, with stable growth in industrial output value, input import value, tax payment value and employment. The monthly salary of a worker reached VND6.7. million in 2019, 2.4 times higher than 2011. Every year, workers had their professional and technical qualifications raised. In 2019, as many as 13% of total workers were trained. Well-trained workers accounted for about 30%. Workers in industrial zones accounted for about 85%, reaching 40,486 people in October 2020, an increase of 1,143 people over the same period in 2019 and 24,182 people over the end of 2015, or an increase of 67.4%.

Environmentally, both industrial parks have wastewater treatment plants to ensure waste treatment capacity and standards. Tenants have their own local wastewater treatment facilities and waste gas treatment systems built before their projects are put into operation. For solid waste and hazardous waste, they have contracts with licensed companies to collect and treat according to the law.

How have business performances of tenants been affected by the COVID-19 epidemic, which has been spreading since the beginning of the year? How has the province supported enterprises and investors?

According to statistics, seven tenants face business hardships because customers from Europe and the United States suspended, delayed or cancelled orders, resulting in unused imported inputs. In addition, two companies lacked inputs and had to lay off workers or apply unpaid leave. The progress of some projects was delayed, particularly by textile and garment companies.

To promptly remove difficulties for businesses hurt by the COVID-19 epidemic and stabilize business performances, the Tax Department issued Official Document 258/CT-TTHT dated April 1, 2020 on tax extension and exemption and late tax payment according to Official Letter 897/TCT-QLN of the General Department of Taxation; the Department of Labor, Invalids and Social Affairs issued the Official Document 408/SLDTBXH-LDV dated March 27, 2020 guiding delayed payment to retirement and survivorship funds for enterprises troubled by the COVID-19 epidemic; the Vietnam General Confederation of Labor issued the Official Document 245/TLD dated March 18, 2020 on delayed payment of union dues for companies hurt by COVID-19; credit institutions and banks restructured repayment terms, exempted and reduced interest and fees to support affected enterprises as per the Circular 01/2020/TT-NHNN dated March 13, 2020.

For its part, the Provincial People’s Committee enacted the Official Document 1691/UBND-VX dated April 14, 2020 to direct provincial and local agencies to carry out the Government's Resolution 42/NQ-CP dated April 9, 2020 on measures to support people facing difficulties caused by the COVID-19 pandemic. Accordingly, financially troubled employers which already paid at least 50% of laid-off salary to employees according to Clause 3, Article 98 of the Labor Code from April to June 2020 can borrow up to 50% of interest-free base salary value without collateral assets to pay for their employees. The maximum loan term at the Vietnam Bank for Social Policies is 12 months.

To catch the wave of investment from countries around the world and approach FDI enterprises looking for new investment markets after the epidemic, what will the Vinh Long Industrial Zones Authority focus on in the coming time?

The remaining rentable area in the two existing industrial zones is not much (about 8ha). Currently, Vinh Long has made a detailed plan for industrial zones (Dong Binh, An Dinh and Binh Tan) approved by the Prime Minister. At the same time, the province prepared to expand Hoa Phu Industrial Park (third phase) with an area of 157 ha, expected to be deployed in the 2021-2025 period.

In my opinion, attracting more investment projects is very necessary. However, for the time being, Vinh Long province needs a certain time to focus on improving the quality of human resources. In the coming time, the province still needs to develop intensively and extensively. New industrial parks should focus on attracting investment projects using advanced technology, developing supporting industries, and processing agricultural and aquatic products. However, in order to create jobs, ensure social security and grow the province's GRDP, we still need labor-intensive garment and footwear manufacturing projects.

Along with the wave of investment shifts, new-generation free trade agreements (FTAs) also open up many opportunities to attract more investment funds into Vietnam. Does the Vinh Long Industrial Zones Authority have any solutions to capture this high-quality capital flow?

Defining that investment attraction is a key solution and leveraging socioeconomic development, in the 2021-2025 period, the authority continues to plan the development of Dong Binh (350 ha), Binh Tan (400 ha), An Dinh (200 ha) and Hoa Phu (157 ha, Phase 3) industrial parks to create land fund to attract investors. The authority supports and facilitates enterprises to recover and promote business performances, industrial production value and export value to achieve growth of over 10% a year, generate jobs for about 70,000 workers, improve worker quality and expertise. All industrial parks have centralized wastewater treatment plants before being put into operation and all tenants have their own local waste treatment systems in accordance with regulations.

To complete its objectives, the authority will urge consulting units to complete planning documents of Binh Tan Industrial Park, Binh Tan Resettlement Area and An Dinh Industrial Park to submit to competent authorities for approval; intensify inspection and help businesses build infrastructure system; step up investment promotion to woo technologically and financially capable investors; give priority to projects using advanced environment-friendly technologies and developing key industries.

In addition, the Vinh Long Industrial Zones Authority continues to effectively carry out regulations on State management of industrial zones; promptly deal with worker strikes; closely coordinate with local authorities to resolutely handle outstanding matters concerning site clearance and land compensation in industrial zones to hand over the ground to investors to implement projects. The authority reforms administrative procedures and applies ISO 9001: 2015 quality standards to improve State management of industrial zones.

Source: Vietnam Business Forum