HCM City plans to attract foreign direct investment (FDI) in industrial parks (IPs) and export processing zones (EPZs).
By focusing on improving infrastructure and administrative procedures, HCM city hopes that they could boost the FDI in IPs and EPZs. Hua Quoc Hung head of the HCM City Export Processing and Industrial Zones Authority (Hepza), said Vietnam has done a good job in containing the COVID-19 outbreak, and it helps the nation attract global investors to the city’s IPs and EPZs.
But city authorities need to resolve the lack of lands for rent available in IPs and EPZs, he said.
There are 17 IPs and EPZs in the city with a total area of more than 2,570 ha and an occupation rate of 68 percent, and so only 120 ha is available to investors this year compared to 500-600 ha a year in previous years, he said. The city has sought the Government’s approval for building a 380 ha IP in Binh Chanh District, a specialized one for innovative start-ups and producers and distributors in new industries.
But admittedly the infrastructure at many IPs and EPZs fall short of investors’ expectations.
Mostly built in the 1990s, many have deteriorated, especially their wastewater treatment facilities, with many falling foul of environmental regulations. Many companies seeking to expand cannot find enough land, and rentals are too high compared to EPZs and IPs in neighboring provinces. Roads near EPZs and IPs are often too congested, leading to higher production costs.
Another issue is the competitive prices offered by other provinces like Binh Duong, Dong Nai and Long An.
While the average rent is US$74 per square metre in Dong Nai for a lease term of 40-50 years, $43.7 in Binh Duong and US$76 in Long An, it is US$125 in HCM City.
The city wants all EPZs and IPs to be “green, clean and hi-tech” by 2025 and plans to build new hi-tech zones for supporting industries. Priority would be given to hi-tech investors already present in the city, especially those adopting industry 4.0, and supporting industries with high added value.
“Building smart industrial parks and processing zones is a global trend, and the city is focusing on it,” Hung said.
Companies in EPZs and IPs should use technology to better manage their manufacturing processes and improve product quality, he added.
