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To attract investors, industrial zones need to enhance their quality

Nowadays, to attract foreign investors, industrial zones need to apply new methods more attractive with strategic business model in order to increase competitive advantages...

Nowadays, to attract foreign investors, industrial zones need to apply new methods more attractive with strategic business model in order to increase competitive advantages.

 

VSIP has attracted $ 7.1 billion in FDI capital and created 180,000 employments

According to the Ministry of Planning and Investment, by the end of 2016, there are 220 industrial zones in operation and occupancy rate reaching up to 51%. Many investors are trying to enhance this occupancy rate.

Going with the trend

An industrial park that is easy to attract investment if it is located in an area with a good business environment, with road traffic advantage by road, air and seaport; complete advantage of road, air and sea ports; Completed infrastructure, attractive incentive policies... This has become a common standard, causing the strong competition between industrial zones which causes negative impact on investment attraction. However, industrial parks are now applying new methods by building a distinctive pattern to serve particular sectors and obtain many success in business.

Tan Thuan Export Processing Zone, the first and long-standing industrial park in Vietnam, was an example of this type of competition. It was unable to keep investors even though Tan Thuan was close to the seaport, near the city center, very convenient for trade.

The reason is Tan Thuan is unlikely to make a profit if it continues to for rent in the total site according to the price or the old way. Tan Thuan proposed one solution of building workshops from 3 to 8 floors with each one area of ​​about 1,000 m2. This is one of ways to attract small-scale businesses, with small capital, but want to have the factory able to operate immediately with full accompanying facilities.

According to the management board of Tan Thuan Export Processing Zone, thanks to the new model, occupancy rate immediately increases. Moreover, it also helps to increase investment productivity. The average land rental in Tan Thuan has increased to $ 15 million per hectare, double the previous one by $ 7 million and the number of enterprises has increased to 12 enterprises per hectare. With proven effectiveness, this model has started to spread into the industrial zones of Ho Chi Minh City.

In the opposite direction, in a new strategy, Hiep Phuoc Industrial Zone (HCMC) focuses on creating land lots for lease with a small area of ​​750 - 1,000 sqm with the aim of attracting small, micro-small businesses and start-up ones. According to leaders of Hiep Phuoc, the number of small and medium enterprises is very high, with high demand for production. Therefore, this is also a way to meet the diverse demands of enterprises. So far, this move has attracted 34 projects with 44 land plots, the total area of ​​20 hectares filled with manufacturing industries such as: mechanical engineering, food processing, electronics, pharmaceuticals, cosmetics , logistics ...

Hiep Phuoc industrial Zone is also considered to be very active in its business strategies, when Hiep Phuoc opened a Vietnam-Japan Technology Park before located in the Hiep Phuoc Industrial Zone with the purpose of attracting Japanese investors with small scale.

Accordingly, Hiep Phuoc has deployed prefabricated factory model according to Japanese standards, along with other utilities such as investment licenses, construction permits, tax consultancy service, accounting, training…. The investor supported all services from A-Z, creating the most favorable conditions for investors to concentrate on production and business. Thus, enterprises could come into production immediately without spending time and money for the above activities. This model is also rather successful when many Japanese investors have registered to operate in Hiep Phuoc. As a result, investors have filled the 13 hectares of this model.

Building a separate model to serve for each specific field, many industrial parks have obtained a "bumper crop" in their business.

Brand replication

Building a separate model to concentrate on the specific fields. Knowing how to enhance their strengths, many industrial parks soon "reap" in business.

Recently, Ho Chi Minh City has begun to deploy model replication of Quang Trung Software Park (QTSC) throughout the country. This is a type of hi-tech industrial park, serving businesses in the software field, digital content, information technology services ... After 15 years of development, QTSC has created an ecosystem for Information technology industry and become a reputable brand attracting investment of large corporations in here.

According to QTSC’s management, QTSC's occupancy rate reaches to 86% and within 15 years it generated cumulative sales of nearly $ 1 billion with labor productivity of $ 18-20 thousand/people/year. It is estimated that every $ 1 spent on infrastructure investment has attracted $ 32.64 capital of investors.

Meanwhile, Vietnam - Singapore Industrial Park (VSIP) has developed fast, up to now it has become a chain of industrial parks with 5 projects which are being deployed nationwide. After over 20 years of operation, VSIP has become a reliable brand attracting FDI capital. So far, VSIP has had 690 investors with a total foreign direct investment of $ 7.1 billion, creating about 180,000 employments for workers.

The success of VSIP thanks to the management of Sembcorp Industries Ltd, Singapore. Thanks to this Corporation, VSIP's customers have been from 30 different countries and regions around the world. Sembcorp, when investing in VSIP, has built close link with other businesses, allocating investment by the strengths of each enterprise to jointly develop this industrial park. Investors of other countries in this industrial zone have full resources for production.

Besides, there is a big name in the international investment market_Temasek Holdings, a strategic shareholder in Sembcorp. Temasek Holdings keeps a close link with the Singapore government, helping to support Singaporean investors in doing business in overseas. In addition, Singaporean businesses are actively investing in Vietnam not only for attractive investment incentives, but also for expanding production site because land in Singapore is no longer sufficient to meet this sector. VSIP has utilized these advantages to welcome Singaporean enterprises to operate in VSIP's industrial parks.

 

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