heading
 
Vietnam's Industrial Zones and
Key Southern Economic Area Draws Investors

Top 10 localities in attracting investment 2007

Ranking
Province
1
  Ho Chi Minh City
2
  Dong Nai Province
3
  The Capital City of Hanoi
4
  Binh Duong Province
5
  Phu Yen Province
6
  Ba Ria Vung Tau  Province
7
  Vinh Phuc Province
8
  Da Nang City
9
  Long An Province
10
  Hau Giang Province

Source: Ministry of Planning and Investment - UPDATED: 25/02/2008
Table by: Runckel & Associates

Vietnam Economic Times magazine reported at the end 2007 that Vietnam had a total of 150 industrial zones (IZs)
located in 49 cities and provinces but these zones are more concentrated in the three key economic regions of VietnamIZs in the southern, northern and central key economic zones account for 80% of the total area of all IZs in the country. Ministry of Planning and Investment (MPI) released numbers that those IZs have a total area of more than 32,300 ha (2.5 Vietnamese Ha = 1 Acre) including 21400 ha leased already, accounting for 66% of the total area.  According to MPI's detailed report, of the 150 IZs, 90 have become operational with a total area of 19,800ha and 60 IZs are in the phase of site clearance and infrastructure building.

According to the MPI's Foreign Investment Agency, IZs attracted 253 foreign-invested projects with a total registered capital of more than $2 billion in the January-July period of 2007, accounting for more than 30% of the total registered foreign capital of Vietnam and over 2.7 times more than the same period of 2006.
  • The total number of foreign-invested projects in IZs is 2,600, with $24.2 billion of registered capital, not including projects to develop IZ infrastructure, which have $976 million of capital. 
  • The average occupancy rate at IZs is 53.5%. It is more than 70% for operating IZs.
Plan for industrial zones

A new Government plan for increasing development in the nation’s industrial zones through 2015 aims to lure investment of $36-39 billion for over 6,000 projects, according to the Industrial and Export Processing Zones Management Department under the Ministry of Planning and Investment.

The Government wants to attract enough investment to lease all the land in existing industrial zones by 2010, as well as establish new zones on an additional 15,000-20,000 ha. This would increase the total area of the nation’s industrial zones to almost 50,000ha by 2010, a figure that could continue to rise to 65-70,000ha by 2015 and nearly 80,000ha by 2020. The plan would also regulate the expansion of existing zones, allowing zones with at least 60 % occupancy to expand acreage, and would provide for the development of necessary waste water treatment facilities.


Binh Duong in the South attracts nearly 500 million USD in FDI


Industrial and export processing zones in the southern key economic area have attracted over US$21.8 billion to date.  As of the end of 2007, these zones attracted over 3,000 projects. Of that number, 1,886 were foreign-invested worth a total of $17.5 billion, accounting for 63 per cent of total foreign investment in zones nationwide.  The area is currently home to 73 industrial and processing zones, spanning nearly 20,000ha. Zones that succeeded at getting full land occupancy and strong development included Tan Thuan, Linh Trung 1, Tan Tao, Hiep Phuoc, Amata, Bien Hoa 2 and Dong An. Zones in HCM City proved the most successful, posting an average occupancy ratio of over 80 per cent as the most effectively used land nationwide.

Experts attributed the success to the area authorities.  Authorities also worked closely with industrial and processing zone management boards to co-ordinate conditions for investors while implementing their projects in the zones.

Vietnam Economic Times reported that Southern Binh Duong province has so far this year licensed 26 FDI projects with a total registered capital of 481.7 million USD, fulfilling 48 percent of its yearly target of attracting over 1 billion USD.  As a result, the province now has 1,650 FDI projects with a total investment capital of 9.4 billion USD. Of them, 874 projects, capitalised at over 5.3 billion USD, are located in concentrated industrial zones (IZs).  Most of the local IZs have tried to accelerate the technical infrastructure construction and zoned off land for projects.

Only fourteen of the established zones were fully occupied and several zones were less successful in attracting investment such as Tan Phu Trung, Tan Quy, Phong Phu, An Phuoc, Long Huong and Ben Dinh. The poorer performances were attributed to inadequate infrastructure, difficulties in land clearance and compensation.
The southern key economic area includes HCM City, and the provinces of Binh Duong, Dong Nai, Ba Ria – Vung Tau, Binh Phuoc, Tay Ninh, Long An and Tien Giang.

 



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