The major difference between Vietnamese-owned and foreign-invested industrial zones (IZs) is that the former aim to lease land to businesses, while the latter, which have had great success, want to provide industrial infrastructure, as required by investors.
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The major difference between Vietnamese-owned and foreign-invested industrial zones (IZs) is that the former aim to lease land to businesses, while the latter, which have had great success, want to provide industrial infrastructure, as required by investors.
The Long Duc IZ in Dong Nai province is considered a typical example of success in terms of both development strategy and business performance. The IZ, covering an area of 280 hectares, has an occupancy rate of 60 percent with total investment capital of over $800 million.
Atsushi Uehara, Long Duc IZ’s general director, said the IZ attracts investments under what he described as the “flock of fowls” mode. A large group, or a mother hen, after setting up its production base in the IZ, will lead chicks, the companies which make parts and components, to the same IZ to optimize their production and business.
Vie-Pan Techno Park in Hiep Phuoc IZ in HCM City, which became operational last December, has also been mentioned by analysts as a typical success story.
Its investor, a joint venture between Vie-Pan Industrial Park, a subsidiary of Japanese Unika Holdings Company, and Hiep Phuoc IZ Development JSC, aims to develop a specialized IZ for large IZs and high-tech enterprises.
Analysts said the specialized IZ model has been developed by a joint venture based on Forval’s survey.
Forval’s managing director Hideo Okubo said 97.3 percent of Japanese enterprises have not made outward investments, and they are mostly small- and medium-sized enterprises.
The enterprises find Vie-Pan Techno an ideal place to set up their production workshops.
They need to show necessary documents to the IZ’s management board which will take responsibility for administrative procedures.
The story of Amata, an IZ accommodating 125 operational enterprises and an occupancy rate of 99 percent, also shows how foreign investors think big when developing IZs in Vietnam.
Huynh Ngoc Phien, Amata Vietnam JSC’s CEO, said the government has agreed on a plan to develop Amata Express City, a general industrial and urban area complex, in Dong Nai province.
This mammoth project would have estimated total investment capital of $20 billion.
When asked to comment about the great success of foreign-invested IZs, Hideo Okubo from Foval said the key was in the long-term vision, which Vietnamese investors do not have.
IZs, as defined in the NSI (national innovation system), must provide sufficient infrastructure conditions for industrial development, and they are not simply places that provide land to investors to set up factories.
Meanwhile, Vietnamese-owned IZs either have a low occupancy rate or operate ineffectively despite high occupancy rates.
(Source: VNN)
