Development of coastal industrial zones appears to be the right move to take advantage of incoming FDI.
BW Industrial, a joint venture between Warburg Pincus and Becamex IDC, has followed famous realtors’ moves to set up an IZ on Dinh Vu Peninsula in Hai Phong City. The project is hoped to open this September.
DEEP C IZ in Hai Phong
Prior to that, Dinh Vu welcomed a Belgium investor – Rent-A-Port NV – with its DEEP C industrial complex project which alone makes up 20 percent of total FDI in Hai Phong.
Like Hai Phong, the local authorities of coastal provinces of Vietnam have been trying to attract FDI to industry projects in coastal areas.
In 2019, the Quang Ninh provincial announced tax and land fund incentives to lure FDI into the Quang Yen coastal EZ, where Rent-A-Port NV could use the available land to build DEEP C III and a deep water seaport, capable of receiving large vessels with tonnage of over 30,000 DWT.
As of the end of June 2017, Vietnam had had 325 IZs, coveringva total area of 94,900 hectares. The figure had risen to 335 only by the end of March 2020, covering a total area of 97,800 hectares, according to the Ministry of Planning and Investment (MPI).
Tesa, a German manufacturer of hi-tech adhesive tapes used in the electronics and automobile industries, was one of a few European investors who announced the building of its factory in DEEP C in mid-June, the time when all economies had closed their doors to prevent the spread of Covid-19.
|As of the end of June 2017, Vietnam had had 325 IZs, coveringva total area of 94,900 hectares. The figure had risen to 335 only by the end of March 2020, covering a total area of 97,800 hectares, according to the Ministry of Planning and Investment (MPI).|
Covid-19 has slowed the relocation of production facilities out of China, which has also affected the industrial real estate market in H1.
However, IZs near the sea are a trend for Vietnam’s logistics development in the future. In Singapore, for example, IZs are built at seaports, and then logistics centers, where liberalized trade and regional goods distribution centers are developed.
The media have recently featured industrial properties, especially industrial land, as a potential area to attract investment.
Despite the impact of the novel coronavirus pandemic, the central province of Quang Ngai has received more than 1,700 foreign experts who will continue their work in local industrial zones and clusters.