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Numbers of Industrial Parks in Vietnam Set To Increase

The Vietnamese government has recently approved the establishment and/or expansion of fifteen industrial zones (IPs) in the first half of 2006.  These new and expanded IPs add to the more than 130 IZs on 26,500 ha, attracting 4,516 projects valued at $18 billion in foreign capital and $6.4 billion in domestic capital.  Although the approved new IZs will be sited all over the country, the South continues to add to its already substantial lead in production sites.

In the North, a 327 ha industrial Park is set to be created in Ba Thien and a 271 ha IP is set to be developed in Binh Xuyen.  Both of these are in Vinh Phuc province, which neighbors Hanoi and has been on of the provinces to advance on the Provincial Competitiveness Index (PCI).  In addition, Taiwanís Bentham International Company, which developed the My Xuan A2 Industrial Zone in Ba Ria-Vung Tau Province, is set to invest $21 million for infrastructure into the Ba Thien site noted above.

Also in the North, Dai An Industrial Zone in Hai Duong Province also won government approval to expand Dai An IZ by adding an additional 470 ha to its already quite large site.  Additionally, approval was given to set-up a new industrial zone named Quang Chau Industrial Zone in 426 ha of land in Bac Giang Province.  Than An IZ was approved to be sited on 107 ha in Nam Dinh and the Viet Hung IZ was approved on 301 ha of land in Quang Ninh province.

In the South, two additional IZs are approved for Dong Nai province, which along with Binh Duong province serves as one of the two provincial engines of growth for the entire of Vietnam.  Dong Nai was approved to set up two new IZs on sites of 177 and 97ha.  The government also approved expanding Ho Nai and Dinh Quan by another 271 and 150ha.  Neighboring Long An province also plans to set up two IZs on 400ha.   In South Central Vietnam, new sites are also planned in Binh Dinh and Ninh Thuan with new parks of 630ha in Nhon Hoi and 371ha in Phuoc Nam respectively.

According to Ms. Nguyen Thi Nguyet Huong, Chairperson of the Nam Quang Infrastructure Development Company in a quote in a July 17-23, 2006 issue of the Vietnam Investment Review, IZs in Hanoi fetch the highest rental rates, of $80-$100sq.m for 50 years while the level was below $30 in Hai Duong Province.   The Ministry of Planning and Investment (MPI) expects that foreign investment flows into Vietnam should exceed $6 billion this year.

Investment comes from countries across the region but investment from Japanese companies seems to be increasing after a recent survey by the Japanese External Trade Organization (JETRO), which annually surveys countries for investment by Japanese investors, noted that Vietnam appeared an attractive location for investment with lower labor costs than many regional competitors.  Big Japanese companies that have recently announced plans to expand include Sanitary ware producer TOTO which is due to open a $52 million factory after it invested in a $23 million plant in Hanoi three months ago.   Another Japanese firm also expanding their Vietnam operations is Canon which is opened itís third factory in Que Vo IZ a few months ago, and is building another printer factory in Tien Son IZ in Bac Ninh Province.


About the Author:

Christopher W. Runckel, a former senior US diplomat who served in many counties in Asia, is a graduate of the University of Oregon and Lewis and Clark Law School. He served as Deputy General Counsel of President Gerald Fordís Presidential Clemency Board. Mr. Runckel is the principal and founder of Runckel & Associates, a Portland, Oregon based consulting company that assists businesses expand business opportunities in Asia. (www.business-in-asia.com)

Until April of 1999, Mr. Runckel was Minister-Counselor of the US Embassy in Beijing, China. Mr. Runckel lived and worked in Thailand for over six years. He was the first permanently assigned U.S. diplomat to return to Vietnam after the Vietnam War. In 1997, he was awarded the U.S. Department of States highest award for service, the Distinguished Honor Award, for his contribution to improving U.S.-Vietnam relations. Mr. Runckel is one of only two non-Ambassadors to receive this award in the 200-year history of the U.S. diplomatic service.


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