VSIP taking expansive steps

Executive chairman of Sembcorp Industrial Parks Ltd and co-chairwoman of VSIP Group, Low Sin Leng

Executive chairman of Sembcorp Industrial Parks Ltd and co-chairwoman of VSIP Group, Low Sin Leng, tells VIR’s Thien Giang about the current development situation of VSIP Group’s four projects in Haiphong city, Bac Ninh and Binh Duong provinces.

Has VSIP attracted much investment so far this year?

VSIP has attracted 440 customers across its locations in Binh Duong, Bac Ninh and Haiphong. The tenants’ total investment capital is about $4 billion with employment creation by operational tenants numbering about 100,000 people.

In the first six months of 2011, VSIP did very well in attracting investments despite tighter fiscal and monetary policies to rein in inflation in Vietnam. In Binh Duong, 13 new and expansion customers signed with VSIP and their investment capital was $290 million or an increase of 71 per cent over last year. These tenants make up 76 per cent of the investments for the whole of Binh Duong province which was $377 million. In VSIP Haiphong, the investment by its recent major customer, Kyocera Mita of Japan, was $200 million. It was also the largest investment by a foreign investor in Haiphong city during the last five years.

Overall, new customers in VSIP made commitments to take up 104 hectares in the first six months of 2011, a figure that exceeds 2010’s.

Several well-known companies which joined VSIP in recent months include United States-based beverage production company Pepsico, Finland-based mobile phone producer Nokia and Japan-based food item producing company Nissin.

What are main sectors or industries that VSIP is interested in calling for?

VSIP has always targeted light and non-polluting manufacturing industries and we will continue to do so. The decision to target such sectors is very much based on environmental considerations. All tenants in VSIP have to comply with strict effluent discharge levels before discharging the waste into VSIP’s central waste water treatment plant for a second treatment. We also do not want noise and air pollution in VSIP.

As we have evolved from a traditional industrial park to an integrated township that includes commercial and residential zones, the decision for light and non-pollutive industries has certainly fit in very well with the overall pleasant urban environment in VSIP.

Singaporean Minister for Trade and Industry Lim Hng Kiang (centre), VSIP Haiphong co-chairmen
Low Sin Leng (left) and Huynh Quang Hai on a recent visit to VSIP Haiphong

Amid a tough economic situation with high inflation, interest rates and loan tightening, what support is VSIP offering investors?

Vietnam’s overall macroeconomic stability and investment environment are crucial decision making factors for foreign investors. In their early investment feasibility study, foreign investors compare Vietnam against Thailand, Malaysia, China and Indonesia. Currently, these other countries have their own set of problems with high inflation and fiscal policies. So long as Vietnam continues to offer a valuable proposition and the foreign investor has an operations strategy for Vietnam, then it will be the choice investment destination.

We do know that factors such as labour availability, productivity and competitiveness, supply chain solutions, access to good manufacturing locations in well-planned industrial parks are key. It is important for the government to continue investing in infrastructure such as good road networks, ports and power plants. Not least is the transparency and implementation of laws and regulations.

What is the progress of the newer VSIPs?

The VSIPs in Binh Duong’s new township, Bac Ninh and Haiphong were launched within a year of each other since 2008. They are in various stages of infrastructure development such as foundation laying, arterial road construction, water and wastewater treatment plants commissioning.

Our fourth and newest project, the VSIP Haiphong, has achieved some milestones since its launch in January 2010. It is now fully incorporated into the Dinh Vu-Cat Hai Economic Zone, thereby offering businesses operating in the VSIP Haiphong government-supported investment incentives.

Sembcorp brought in Singapore’s Nanyang Technological University (NTU) to provide urban solutions to the integrated township. Its Nanyang Environment and Water Research Institute (NEWRI) recently completed urban water management and hydraulic assessment studies on the VSIP Haiphong’s river flow network.

Meantime, VSIP Bac Ninh has seen 54 per cent take-up rate just three and a half years since its launch. We are pleased that we have started receiving interest for commercial and residential land as well. A large foreign residential developer has recently committed interest in VSIP.

VSIP shareholder Becamex IDC will also self-develop residences in the VSIP Haiphong through its subsidiary, Becamex TDC, which is listed on the Ho Chi Minh Stock Exchange. The company has purchased a 10ha plot and in the start-up area to develop 342 units of villas and terraced homes with total gross floor area of 86,691 square metres. The residences will house about 1,700 residents. Construction will commence this year.