Hepza says IPs, EPZs have proved an efficient model

The development of industrial parks and export processing zones in HCMC over the past 20 years has proved a success as these concentrated zones have served as the driving force that helped transform the local economy, said the top official in charge of such zones.

Vu Van Hoa, director of HCMC Export Processing and Industrial Zones Authority (Hepza), told a press meeting on Friday to review the development of IPs and EPZs in HCMC over the past 20 years that the model has helped lure investors into the city.

But he also stressed that conditions have changed, and as such, the city is mapping out a new development path for such concentrated production zones.

In the past 20 years, EPZs and IPs in the city have become attractive destinations for both domestic and foreign investors and play important roles in drawing investment, he said.

Currently, the city has 15 EPZs and IPs with a total area of more than 3,500 hectares, of which 14 operational IZs and EPZs have leased over 1,185 hectares out of 1,763 hectares, or 67 % of the rentable area. One industrial park is now in the pipeline.

Hoa said that the city was the first locality in Vietnam to experiment the export processing zone model.

To date, such zones are housing 1,216 projects with total investment of US$6.68 billion, including 733 domestic-invested projects and 483 FDI ones. All such figures average out at an invested capital of US$6.5 million on each hectare of land in the zones, and US$18 million in annual export revenue, in addition to nearly 200 jobs as well as VND725 million in annual tax income.

The development of EPZs and IZs is a driving force for economic development and restructuring toward increased industrial production and export value, he said.

“They have created the leverage for the industrial development in the southern region and the country as a whole,” he told reporters.

Hoa said that one important achievement of EPZs and IPs was the rapid export revenue growth. The accumulated export revenue of such zones reached US$23.2 billion, accounting for 12.53% of the city export turnover, and this proportion grows year after year.

Time for change

However successful they have been, such zones have largely attracted labor-intensive projects and generated little added value products, according to Hoa.

Foreign investors mainly invested in processing projects like electronics assembly, textiles, and shoes that need many laborers and brought about low value products.

As the competition is getting tougher and as economic development turns more in-depth, the development model at concentrated production zones need a more efficient path, and the city needs to promote changes, according to Hoa, saying “now is the time to channel the cash flow into more efficient sectors.”

He told the press meeting that the city would now strongly shift to projects with high science and technology contents.

Hoa noted the city will add 3,000 more hectares of land for EPZs and IPs by setting new industrial parks as well as expanding the current industrial parks. Areas of priority for foreign investment in the city from now on will be high value-added, environment-friendly manufacturing and hi-tech sectors.

With this trend, Hepza hoped one hectare of land in EPZs and IPs would bring more high value-added products, helping boost the total export revenue.

HEPZA will hold a ceremony to mark the 20th year of development of the city Export Processing and Industrial Zones in the middle next month. It will also hold seminars to attract investors into the zones.

In the first five months of this year, the city’s EPZs and IPs attracted more than US$1.35 billion of invested capital, or nearly 95% of this year’s target. – SGT

Tags: Vietnam economic zones, Vietnam industrial zones