Reporting the good, the bad and the unprofitable of industrial zones

It is clear that while some industrial zones (IZ) have helped many areas attract investment – the same can’t be said of all localities.

The stories of the idle IZs

According to Nguyen Van Tinh, a senior official of the Long An Industrial Zone Management Board, Xuyen A IZ is  only occupied 34.87 percent.

It’s the first IZ in the province and ismostly full of businesses moving from HCM City. To date,77 businesses have received investment licenses of which only 28 have become operational.

Located next to Xuyen A is Duc Hoa 3 IZ, covering an area of 2,300 hectares, which has been formed from 13 smaller IZs. However, infrastructure upgrading has been delayed and many businesses say they will only move in when it is completed.

As a result, thousands of hectares are left idle.

Nguyen Van Ly, deputy director of Phu An Company, the developer behind Thanh Duc IZ, said they are now seeking permission to turn the 256 hectare IZ into an urban area resort.

The problem is that Thanh Duc, which started up in 2007 and has 50 percent of its infrastructure completed, still cannot attract investors.

More sad stories abound regarding IZs in Dong Nai province. An Phuoc IZ, which was set up six years ago, in 2003, has had no investors so far.

In fact, one domestic investor and two foreign investors once came here and intended to set up workshops in the IZ. However, investors have been scared off by the slow pace of infrastructure completion.

Nguyen Thanh Son, representing Long Khanh IZ, also complained that the IZ has lured only two domestic investment projects with a total leased land area of seven hectares. The result is below expectations, although the land leasing fee is very reasonable, at just 45-50 dollar per square meter for 50 years.

A lot of IZs which received operation licenses in 2005-2008 in the province reportedly have a modest occupancy rate of no more than two percent.

Other IZs still living well, why?

There is an ‘IZ belt’ of 10 IZs in Long An province, which is located in the three districts bordering HCM City. Four of the 10 IZs have very high occupancy ratios and many investors.

Duc Hoa 1 IZ has been fully occupied with 68 secondary investors. Tan Duc IZ has also been fully occupied with 89 registered investors. At Nhut Chanh IZ, 76 percent of industrial land area has been leased at 55-65 dollar per square meter for 45-50 years.
Why are there IZs which cannot find investors and there are ones which can easily lure investors?

Because these IZs all have the common characteristic that they were set up prior to 2007 with completed infrastructure system, just 20-25 kilometers far from HCM City and located near key routes such as Highway No 1, No 50, the provincial road No 825 linking Long An and HCM City.

Tran Tan Sy, an executive of Long Hau Company, which runs Long Hau IZ, said that many businesses are interested in the IZ, many of whom plan to provide logistics services to take full advantages of the position of the IZ which is near the urban area and Hiep Phuoc Port in HCM City.

VietNamNet/DT

Tags: Vietnam industrisal zones